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Caja Ingenieros Gestión SGIIC, SAU

PRI reporting framework 2020

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

ESG incorporation in actively managed fixed income

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
80 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
20 All three strategies combined
0 No incorporation strategies applied
100%
Corporate (non-financial)
0 Screening alone
0 Thematic alone
0 Integration alone
80 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
20 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.

The incorporation of ESG in the fixed income is done in the following way. For the Public Debt, the IDH level is taken into account to select the issuer. In the case of corporate fixed income, for the Fonengin ISR Fund, quality is taken into account (positive screening) and integration is carried out. For the CI Environment ISR fund, the quality (screening), the topic on climate change and integration are taken into account. For the rest of the strategies, sectors such as defense and tobacco are excluded. For the CdE ODS Impact ISR fund , the incorporation of ESG in the fixed income is done in the following way. For the Public Debt, the investment will be in countries in the top-30 of the SDG Index, which measures compliance with the Sustainable Development Goals by country, or in supranational entities with impact projects. In the case of corporate fixed income, positive screening and integration is carried out, looking for companies that positively influence the Sustainable Development Goals (SDGs) and prioritizes companies whose business is contributing, to their achievement.

01.3. Additional information [Optional].


FI 02. ESG issues and issuer research (Private)


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]

Those responsible for investment decisions have access to both internal documentation with ESG qualifications and the research platform itself, which allows them to customize the information they want to extract from each of the companies to analyze.
 


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Corporate (financial)
Corporate (non-financial)
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

04.2. Describe your approach to screening for internally managed active fixed income

For corporate investments we combinate positive screening and best-in-class using the scoring provided by a third entity. We also use exclusionary screening because we don't invest in some sectors (tobacco, military) and in other companies that have high level controversie. In SSA investments, we exclude by the IDH level that can give us a vision of the quality of the country o region Governance.

04.3. Additional information. [Optional]


FI 05. Examples of ESG factors in screening process (Private)


FI 06. Screening - ensuring criteria are met

06.1. Indicate which systems your organisation has to ensure that fund screening criteria are not breached in fixed income investments.

Type of screening
Checks
Negative/exclusionary screening
Positive/best-in-class screening

06.2. Additional information. [Optional]


(B) Implementation: Thematic

FI 07. Thematic investing - overview (Private)


FI 08. Thematic investing - themed bond processes

08.1. Indicate whether you encourage transparency and disclosure relating to the issuance of themed bonds as per the Green Bonds Principles, Social Bond Principles, or Sustainability Bond Guidelines..

08.2. Describe the actions you take when issuers do not disburse bond proceeds as described in the offering documents.

We don't have minimum requirements to invest in sustainability bonds, but we review that the process will be allocated in ESG projects.

08.3. Additional information. [Optional]


FI 09. Thematic investing - assessing impact

09.1. Indicate how you assess the environmental or social impact of your thematic investments.

09.2. Additional information. [Optional]

We measure the impact of the investments by calculating the percentage of the company's income due to sustainable, environmental or social projects.


(C) Implementation: Integration

FI 10. Integration overview

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

Depending on the scoring level the portfolio manager assign a negative or positive premium to the fundamental valuation of the company. Moreover could do the same procedure in case of detected controversies. With this premium the management of ESG aspects is included in the decision process and could be a reason to increment position, buy a new company or sell the actual position.

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

Corporate (financial)

Depending on the scoring level the portfolio manager assign a negative or positive premium to the fundamental valuation of the company. Moreover could do the same procedure in case of detected controversies. With this premium the management of ESG aspects is included in the decision process and could be a reason to increment position, buy a new company or sell the actual position. There are no treatment differences between financial and non-financial sector bonds.

Corporate (non-financial)

Depending on the scoring level the portfolio manager assign a negative or positive premium to the fundamental valuation of the company. Moreover could do the same procedure in case of detected controversies. With this premium the management of ESG aspects is included in the decision process and could be a reason to increment position, buy a new company or sell the actual position. There are no treatment differences between financial and non-financial sector bonds.

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)

In the scoring calculation we use a % to evaluate the E/S/G Incidents. For example, if we want to invest in some companies that have a good qualifications because have no incidents or have incidents with a low impact, this companies probably will have a high scoring and will be included a positive premium on the fundamental valuation of the portfolio manager. On the other hand, if they have poor qualification on ESG incidents normally will have a low scoring what turns it into negative premium on the fundamental valuation of the portfolio manager. There are no treatment differences between financial and non-financial sector bonds.

Corporate (non-financial)

In the scoring calculation we use a % to evaluate the E/S/G Incidents. For example, if we want to invest in some companies that have a good qualifications because have no incidents or have incidents with a low impact, this companies probably will have a high scoring and will be included a positive premium on the fundamental valuation of the portfolio manager. On the other hand, if they have poor qualification on ESG incidents normally will have a low scoring what turns it into negative premium on the fundamental valuation of the portfolio manager. There are no treatment differences between financial and non-financial sector bonds.

12.3. Additional information.[OPTIONAL]


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