Before an investment decision is made, the portfolio manager performes individual research. Data or information are collected from annual reports or external credit analysis.
If available, data supplied through Bloomberg are used. Also research made by counterparties is used. The most important ESG factors of an issuer are captured in short internal notes/bullets. Risks and opportunities including the ESG related ones are considered. If there are high risks related to an ESG factor, for which the investor is not expected to be compensated through the risk premia, an investment is not likely to take place. Also, if there is an major ESG related credit strength identifed, it could be supportive for the investment.
Within the group Financials we look for different ESG factors depending on the type of company, but governance would be important in all cases. For intstance, in the case of banks their lending practices and ethics are of interest, along with their compliance with regulations. For real estate companies energy efficiency and purchase practises are of particular interest as well as their sustainablity thinking when it comes to urban planning etc. In the case of investment companies their holdings are analyzed according to type of company.