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Caja Ingenieros Gestión SGIIC, SAU

PRI reporting framework 2020

You are in Strategy and Governance » ESG issues in asset allocation

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe Consider an analysis of the MSCI supplier that provides us with ESG information and we also take into account at present and for future scenarios, the controversies that may appear on one of the companies face and quarterly we have a follow-up for decision making in the ISR commtee.
Describe We are working with an analysis from the ISS supplier that provides us with information on climate analyzes. From 2020 we will report it for each portfolio and analyze it for each ISR committee.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

Our organitsation considers ESG issues in allocation of assets between sectors and geographic markets


SG 13 CC.

13.4 CC. Describe how your organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, its results, and any future plans.

Describe

Through the analysis of the carbon footprint of the managed portfolios, the exposure to climate risks has been determined to a scenario of emissions reduction imposed by COP 21. With this analysis, during 2019, it has been possible to reduce carbon emissions generated by managed portfolios.

13.5 CC. Indicate who uses this analysis.

13.6 CC. Indicate whether your organisation has evaluated the potential impact of climate-related risks, beyond the investment time horizon, on its investment strategy.

Describe

During 2019, the objective is to work on the impact of decarbonization measures in a concrete and quantitative manner.

During 2020, based on our supplier we have much more detail. The climate change reports generated through ISS ESG according to the portfolio of assets of each investment fund allow measuring the climate impact with a wide coverage, high data quality and an independent analysis. This is a methodology developed over three years with the Swiss Federal Institute of Technology and includes around 800 specific models of sectors and subsectors, allowing ISS ESG researchers to calculate greenhouse gas (GHG) emissions according to the most relevant for each sector.

13.7 CC. Indicate whether a range of climate scenarios is used.

13.8 CC. Indicate the climate scenarios your organisation uses.

Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other

Other (1) please specify:

          ISS Institutional Shareholder Services
        
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

The funds managed with criteria of responsibility (Fonengin ISR, CI Environment ISR and CdE ODS Impact ISR) are targeted as a minimum carbon footprint within the possible ones. In fact, at the end of the financial year 2019 they stood at 94,36, 33,84 and 117,53 metric tons per million dollars of income. That implies up to  between 2 and 4 times less than the MSCI World and a historical record for each of the funds.

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

14.5. Additional information [Optional]


SG 14 CC.

14.6 CC. Provide further details on the key metric(s) used to assess climate-related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Carbon footprint (scope 1 and 2)
          To assess the impact of a company on the process of climate change
        
          Metric tonnes of ghg emissions
        
          Data reported by companies
        
Portfolio carbon footprint
          To assess the positioning of investment portfolios in relation to benchmarks and the rest of the sector. Especially for those strategies with an ESG seal, this is a measure of reputation regarding the quality of their management.
        
          Metric tonnes of ghg emissions / 1 millions USD revenues
        
          Data reported by companies
        
Carbon intensity
          Evaluate the efficiency in emission of polluting gases of a company in the process of climate change.
        
          reflecting the emission of metric tons of CO2 per million USD/sales, adjusted for the participation in the company.
        
          Bassed in ISS Research
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risk management processes used for identifying, assessing and managing climate-related risks.

Please describe

Climatic risks are part of the company's global risk management strategy. For this reason in 2017 a fund was created whose main theme is the fight against climate change. As of that date, the rest of the funds have also been incorporating good practices that allow them to position themselves before the risks related to climate change. For example, the risk posed to energy companies by the transition to a low carbon economy has been subject to analysis, directly impacting investment decisions and causing changes in some portfolios in order to reduce the carbon footprint. Beyond the changes made, this risk also intervenes in the integration of ESG factors included in the selection of investments, since it reduces the possibilities of future profitability of the affected companies.

14.9 CC. Indicate whether your organisation, and/or external investment manager or service providers acting on your behalf, undertake active ownership activities to encourage TCFD adoption.


SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

40 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

70 Percentage of AUM (+/-5%) per asset class invested in the area
35 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Energy efficiency is a practice that increasingly has social acceptance and which aims to reduce or optimize the energy consumption, whatever its use. 

The interest in energy efficiency is gaining more and more followers, not only because of the benefits it generates to fight climate change but because it allows companies that are aware of this to improve competitiveness by reducing energy consumption and therefore costs. Here are some examples of companies that allow you to invest in this topic:

Kingspan Group is a world leading Irish company in high quality insulating panels, and which focuses all its efforts on modifying construction practices, approaching construction from a sustainable point of view, with environmentally friendly products and materials. The insulation range puts the focus on optimizing the energy efficiency of buildings, so that the consumption in air conditioning is as low as possible in both hot and freezing weather.

Other examples of companies:

Brembo (High quality brakes are really important in terms of vehicle efficiency), 

Brambles (the model is based on the circularity of pallets, so the efficiency in terms of routs are obvious),  

Asset class invested

15 Percentage of AUM (+/-5%) per asset class invested in the area
7 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

 

Renewable energies are those obtained from clean and inexhaustible natural sources, and one of the main differences with

fossil fuels is that it does not produce greenhouse gases or polluting emissions. Therefore, the transition to this type of energy is increasingly essential to combat climate change and limit its effects.

To date, the main renewable energies are:

• The eolic energy.

• Solar energy.

• Hydroelectricity.

 

In the first block of companies, we focus on selecting companies that work throughout the generation cycle of

renewable energy or that the focus of its products is related to renewables.

In the second block of companies, we select businesses that are fully equipped or that are improving the use of renewable energy in their activities.

 

Example of companies: Vestas and Siemens Gamesa (The companies are world leaders in the manufacture and maintenance of wind turbines for obtaining wind energy.

Asset class invested

20 Percentage of AUM (+/-5%) per asset class invested in the area
5 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

 

- Buildings. The companies that manufacture products are selected for sustainable construction and / or that optimize energy use.
- Buildings (~ 40%). Energy consumption for air conditioning, lighting, appliances. For example, the insulation range focuses on optimizing efficiency 
energy efficiency of buildings, so that air conditioning consumption is as low as possible in hot and cold climates.

 Umicore, the company develops products, services or projects that support pollution prevention, waste minimization or recycling. The group is a leading supplier of key materials for rechargeable batteries used in hybrid and electric cars and portable electronic devices. Furthermore, it is the world's leading recycler of complex waste streams containing precious metals and other valuable metals.

 Accell (The company is the European leader on electric bikes with brands like Haibike)

Asset class invested

12 Percentage of AUM (+/-5%) per asset class invested in the area
2 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Due to the thematic of the fund described above we look for companies whose main source of income comes from educational programs or courses, products and services used in a school environment, that is, books, software and educational materials used by students and teachers as part of educational programs. As well as publishing companies, television channel producers or game manufacturers with educational content or companies that provide catering, school transportation or residential centers for students.

Unite Students, is the largest British company dedicated to the development, management and operation of residences for university students (in 2018 almost 90% of its income originated from these activities). In addition, since 2012 through its foundation, it has provided free student housing and financial support to more than 250 young people without family support.

New Oriental Education is the largest provider of private educational services in China. They offer a wide range of educational programs, services, and products, consisting primarily of language training and test preparation, preschool, primary and secondary education, online education, content development and distribution, and study abroad consulting services. In 2018, more than 80% of its income came from these activities.

 

Asset class invested

13 Percentage of AUM (+/-5%) per asset class invested in the area
8 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

 

Companies that try to facilitate and improve access to water as a basic resource.

About 70% of the Earth's surface is covered by water, but only 2.5% is fresh water, and the remaining 97.5% is water salty. Furthermore, around 30% of the water is underground and its extraction is sometimes complex. Regarding the main uses of water in the world, we have the agricultural sector (70%), industrial use (20%) and municipal (10%).In terms of investment, we invest in this issue through companies that work throughout the water cycle.

 Society is growing at unsustainable rates and as a result, production of all kinds is increasing every day for products that we also consume at breakneck speed. Therefore, we believe that the focus of companies should be the prevention and minimization of waste, as well as the commitment to the circular economy, based on the reuse and recycling of materials.

 Example companies: Kemira, Xylem (one of the leaders worldwide working on the water cycle, they provide all kind of products used around the cycle)

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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