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Finance in Motion GmbH

PRI reporting framework 2020

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » (C) Implementation: Integration

(C) Implementation: Integration

FI 10. Integration overview

10.1. Describe your approach to integrating ESG into traditional financial analysis.

As an impact asset manager exclusively focused on sustainable development in low and middle-income countries, integrating ESG into financial analysis is part of our core business. Our approach to fixed income investing is based on integrating the consideration of ESG aspects in all stages of the investment cycle in order to achieve a positive impact.

 

10.2. Describe how your ESG integration approach is adapted to each of the different types of fixed income you invest in.

Corporate (financial)

When investing into financial institutions (FI), our ESG integration approach involves an E&S due diligence to assess the FI's Environmental and Social Management System and - after the loan agreement is signed - at minimum yearly reporting on E&S compliance and performance. For financial institutions investing into renewable energy projects, it involves additional E&S requirements to be met. The consideration of corporate governance is integrated in our standard risk assessment and monitoring procedures in the investment cycle.

Corporate (non-financial)

When investing directly into non-financial institutions (thusfar mostly renewable energy projects), our ESG integration approach involves a full E&S due diligence, based on IFC Performance Standards, and a detailed E&S action plan derived from the E&S due diligence findings. The implementation of the E&S action plan by the client is monitored with support from E&S consultants as required. The consideration of corporate governance is integrated in our standard risk assessment and monitoring procedures in the investment cycle.

10.3. Additional information [OPTIONAL]


FI 11. Integration - ESG information in investment processes

11.1. Indicate how ESG information is typically used as part of your investment process.

Select all that apply
Corporate (financial)
Corporate (non-financial)
ESG analysis is integrated into fundamental analysis
ESG analysis is used to adjust the internal credit assessments of issuers.
ESG analysis is used to adjust forecasted financials and future cash flow estimates.
ESG analysis impacts the ranking of an issuer relative to a chosen peer group.
An issuer`s ESG bond spreads and its relative value versus its sector peers are analysed to find out if all risks are priced in.
The impact of ESG analysis on bonds of an issuer with different durations/maturities are analysed.
Sensitivity analysis and scenario analysis are applied to valuation models to compare the difference between base-case and ESG-integrated security valuation.
ESG analysis is integrated into portfolio weighting decisions.
Companies, sectors, countries and currency and monitored for changes in ESG exposure and for breaches of risk limits.
The ESG profile of portfolios is examined for securities with high ESG risks and assessed relative to the ESG profile of a benchmark.
Other, specify in Additional Information

11.2. Additional information [OPTIONAL]


FI 12. Integration - E,S and G issues reviewed

12.1. Indicate the extent to which ESG issues are reviewed in your integration process.

Environment
Social
Governance
Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

12.2. Please provide more detail on how you review E, S and/or G factors in your integration process.

Corporate (financial)

When investing into financial institutions (FI), our ESG integration approach involves an E&S due diligence questionnaire to assess the FI's Environmental and Social Management System and yearly reporting on E&S compliance and performance. For financial institutions investing into renewable energy, it involves additional E&S requirements to be met. The consideration of corporate governance is integrated in our standard risk assessment and monitoring procedures in the investment cycle.

Corporate (non-financial)

When investing into non-financial institutions (mostly renewable energy projects), our ESG integration approach involves a full E&S due diligence, based on IFC Performance Standards, and a detailed E&S action plan derived from the E&S due diligence findings. The implementation of the E&S action plan by the client is monitored with support from E&S consultants as required. The consideration of corporate governance is integrated in our standard risk assessment and monitoring procedures in the investment cycle.

12.3. Additional information.[OPTIONAL]


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