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KLP

PRI reporting framework 2020

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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.

PMs and ESG staff regularly engage with companies. These conversation influence the overall evaluation of company management. However, as KLP only invest in IG companies in Norway, the downside risk is low.  

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

SSA

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

Corporate (financial)

KLP do not operate with the same division of FI into financial and non-financial as PRI. Different companies and sector have different ESG-risks.

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

Corporate (non-financial)

KLP do not operate with the same division of FI into financial and non-financial as PRI. Different companies and sector have different ESG-risks

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

Securitised

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

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
SSA
Corporate (financial)
Corporate (non-financial)
Securitised
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]

For the ecolabelled funds ESG-rating is a part of the selection process, 50% of the fund has to be invested in companies with a good ESG-rating. 


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
SSA

Environmental

Social

Governance

Corporate (financial)

Environmental

Social

Governance

Corporate (non-financial)

Environmental

Social

Governance

Securitised

Environmental

Social

Governance

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

SSA

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

Corporate (financial)

KLP do not differ in strategies between financial and non-financial. KLPs guidelines for investment aplly for all fixed income investments, in addition the ecolabelled funds have a stricter criteria of inclusion of companies with a good ESG-rating.

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

Corporate (non-financial)

KLP do not differ in strategies between financial and non-financial. KLPs guidelines for investment aplly for all fixed income investments, in addition the ecolabelled funds have a stricter criteria of inclusion of companies with a good ESG-rating.

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

Securitised

For the ecolabelled funds all investments need to have an ESG-rating. If they do not the PMs do their own analysis. 

12.3. Additional information.[OPTIONAL]


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