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Pensioenfonds PNO Media

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
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%

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

We believe a combination of screening and integration works wel within fixed income. Thematic solutions do not yet meet our demands and often have a higer cost profile.

01.3. Additional information [Optional].


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
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  

specify description

          Our service provider EOS at Federated Hermes provides us with insights from their engagement through their client portal.
        

Indicate who provides this information  

specify description

          SSA: Reporters without Borders, United Nations (sanctions policy) and external manager Ashmore (sovereigns in EM).
        

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

- PNO Media does not invest in government bonds of countries on which the UN Security Council has imposed sanctions.

- PNO Media does not invest in government bonds of countries with the worst rankings ("very serious situation") in the press freedom index, issued by Reporters without Borders. 

- PNO Media's external manager Ashmore integrates ESG-analysis managing the sovereign EMD portfolio.

- PNO Media's corporate bond managers integrate ESG analysis in the total analysis of the issuers

- Our service provider Hermes EOS provides us with insights from their engagement through their client portal.

 

 

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]


(A) Implementation: Screening

FI 04. Types of screening applied

04.1. Indicate the type of screening you conduct.

Select all that apply
SSA
Negative/exclusionary screening
Positive/best-in-class screening
Norms-based screening

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

Internally we only invest in AAA EMU government bonds (at the moment only Dutch government bonds).

04.3. Additional information. [Optional]


FI 05. Examples of ESG factors in screening process (Not Completed)


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

06.2. Additional information. [Optional]


(C) Implementation: Integration

FI 10. Integration overview

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

 The ESG issues and score (both external sources and on basis of internal research by external managers) of each company and country are integrated in the overall analysis and holdings decisions of the specifc company and country. It thereby influences the investment decisions and holdings in the portfolio.

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

SSA

Internally managed: only AAA EMU government bonds, at the moment only Dutch government bonds.

Externally managed (EM debt): the manager reviews and discusses the ESG scores of the portfolio on a quarterly basis. Any red flags are regularly discussed. Portfolio managers visit countries on a regular basis and research ESG aspects, among other fundamentals, during these visits.

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
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
SSA

Environmental

Social

Governance

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

SSA

Internally managed: only AAA EMU government bonds, at the moment only Dutch government bonds.

Externally managed (EM debt): the manager reviews and discusses the ESG scores of the portfolio on a quarterly basis. Any red flags are regularly discussed. Portfolio managers visit countries on a regular basis and research ESG aspects, among other fundamentals, during these visits.

12.3. Additional information.[OPTIONAL]


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