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Ohman

PRI reporting framework 2020

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
SSA
100 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (financial)
0 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
90 Screening + integration strategies
10 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%
Securitised
100 Screening alone
0 Thematic alone
0 Integration alone
0 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied
100%

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

It is our belief that ESG considerations is essential in order to be able to assess the risks which could impact an issuers creditworthiness. Hence, we have decided to take a systematic approach to ESG incorporation within fixed income through a combination of the strategies below.

Screening is applied (quarterly) to all our fixed income investments. This strategy was chosen to meet client demands, but also because we believe that certain business practices simply are misaligned with a sustainable development and therefore not eligible for investment.

Thematic strategy is applied primarily to our Green Bond fund, but all our corporate bond funds can and do invest in both green bonds and sustainability bonds. In addition to second opinion and third-party reviews, we also conduct our own assessment of the issuer’s green bond framework in order to make sure that the use of proceeds meet our sustainability criterias.

Integration strategy. All fixed income mandates are managed in-house, in close collaboration between our fixed income team and ESG-team. We have taken a systematic approach to ESG integration which is explained in more detail in section FI 10-12.

01.3. Additional information [Optional].

In terms of SSA, we only invest in Swedish sovereign bonds and Swedish municipalities, which we assess as having good governance and low ESG-risk. 


FI 02. ESG issues and issuer research

02.1. Indicate which ESG factors you systematically research as part of your analysis on issuers.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
Environmental data
Social data
Governance data

02.2. Indicate what format your ESG information comes in and where you typically source it

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

02.3. Provide a brief description of the ESG information used, highlighting any differences in sources of information across your ESG incorporation strategies.

We use two main data providers for ESG data and research on. In addition to this, we also conduct our own issuer-specific assessment in-house - which is more qualitative in nature - to complement the quantitative rating from the ESG data provider.

We have developed sector specific ESG scorecards including the most material aspects that could affect certain issuers or industries. These scorecards have been developed by the ESG-team in collaboration with the portfolio managers, outlining how relevant each ESG variable is, its potential risk and its importance for the credit valuation. The inhouse-scorecards use ESG data from third parties as input, based on which we then build our own materiality framework and assessment. We use ESG data from different providers in order to be able to benchmark different metrics and make sure the information is reliable and robust.

Our current ESG data and research providers are Refinitiv (raw ESG company data), Sustainalytics (raw ESG company data and issuer-specific analysis) as well as sell-side research, for example from the credit rating agencies. We also use public information and industry benchmarks/rankings as input.

02.4. Additional information. [Optional]


FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]

We have an ESG research log where ESG analysts add company-specific research notes, for example after company presentations and meetings. For more information on the materiality framework and ESG scorecards which we use and regularly update, see FI 10. 

The portfolio managers always have access to this log. The ESG-team send ESG-updates to relevant portfolio team when a change is made for example when a company issues a new bond. These ESG-updates includes a short comment, the company's ESG risk profile and the ESG-teams' view/outlook on this particular issuer. Through these updates the ESG-team also notify portfolio managers about the engagement process and potential changes in our assessment.

If an issuer has high ESG risk rating, and if the ESG team has a negative outlook for the specific issuer, this is discussed at regular meetings with the portfolio team and the ESG team (monthly). Depending on the outcome, we could decide to engage or divest.


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