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Keva

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.

Analysis of ESG factors are integrated in all internally, actively managed financial and non-financial corporate debt investments. Financial and ESG analysis are combined in evaluating investments.

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

Corporate (financial)

ESG factors are evalued how they affect economic growth, macro themes, consumer preferences, regulation changes etc (economic and industry analysis conducted for investment decisions), financial analysis is combined with ESG information (company/issuer analysis) and integrated in valuation (issuer risk). For different industries and for financial or non-financial corporates the materiality and importancy of E, S and G factors varies.

Corporate (non-financial)

ESG factors are evalued how they affect economic growth, macro themes, consumer preferences, regulation changes etc. (economic and industry analysis conducted for investment decisions), financial analysis is combined with ESG information (company/issuer analysis) and integrated in valuation (issuer risk). For different industries and for financial or non-financial corporates the materiality and importancy of E, S and G factors varies.

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]

We examine each company from the qualitative ESG point of view. The decision is either yes or no. So, we do not include ESG in the quantitative analysis of the companies. Also, we do not base the size of any of our investment decisions on index weightings. 


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)

As an integral part of our investment process and decisions we analyze and evaluate systemically the E, S and G factors, in risk and return perspective. According to our investment philosophy we invest in securities of quality issuers, and the management of these issues, specific for industries and corporates are among our quality criteria. The same process is applied on the securities of both financial and non-financial corporates. 

Any ongoing legal issues, environmental damage cases, potential breaches of competition law, etc, are carefully analysed to understand the quality of corporate governance and the strength and integrity of the management. 

 

Corporate (non-financial)

As an integral part of our investment process and decisions we analyze and evaluate systemically the E, S and G factors, in risk and return perspective. According to our investment philosophy we invest in securities of quality issuers, and the management of these issues, specific for industries and corporates are among our quality criteria. The same process is applied on the securities of both financial and non-financial corporates. 

Any ongoing legal issues, environmental damage cases, potential breaches of competition law, etc, are carefully analysed to understand the quality of corporate governance and the strength and integrity of the management. 

12.3. Additional information.[OPTIONAL]


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