This report shows public data only. Is this your organisation? If so, login here to view your full report.

CIBC Asset Management Inc.

PRI reporting framework 2020

Export Public Responses
Pdf-img

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.

As part of our commitment to the PRI, we have a systematic process to assess and measure the environmental, social and governance risks for all the companies under coverage.  Please refer to FI 01.3 for our proprietary approach to ESG integration.

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

SSA

Unique ESG industry questionnaires have been developed  by the analyst for Supranational and Sub-Sovereign entities. These questionnaires include questions on engagement with local communities and bribery/corruption policies.  ESG materiality weights are 25/25/50 (E/S/G)

Corporate (financial)

Unique ESG industry questionnaires for each of banks and insurance companies; for example, it includes questions on % of loans to oil and gas sector and assessment of their RI policy and cyber security. ESG weights are 13/27/50(E/S/G). 

Corporate (non-financial)

Unique ESG industry questionnaire for each non-financial industry.  Weights vary. 

10.3. Additional information [OPTIONAL]

As noted in FI 01.3, analysts teams work together to determine ESG scores and ratings.


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)
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]

Analysis of ESG factors is fundamental to the accurate assessments of a company as well as an evalation of the risks and the range/magnitude of potential outcomes for a company's bond valuation.  By combining both financial and ESG risk analysis, CIBC AM reaches a deeper understanding of the companies in which we invest.  We assess the potential credit impact on credit ratings, default risk, risk of covenant breach, impact on bond liquidity and the company's access to capital. 


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

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

SSA

Applies to Supranationals and Sub-Sovereign Canadian entities. 

Corporate (financial)

As part of our commitment to the PRI, we introduced a systematic process to assess and measure the environmental, social and governance risks for all the companies under coverage.  Please see our response to FI 01.2 and FI 01.3

This approach applies to companies on all of our Approved Lists (money market / investment grade bonds / high yield / SRI) which constitute our active holdings.

Analysis of ESG factors is fundamental to the accurate assessment of a company as well as an evaluation of the risks and the range/magnitude of potential outcomes for a company's bond valuation. By combining both financial and ESG risk analysis, CIBC AM reaches a deeper understanding of the companies in which we invest.

ESG risks manifest in profitability, leverage, cash flow, coverage, reputation, financial policy, competitiveness and event risk.

We assess the potential credit impact on credit rating, default risk, risk of covenant breach, impact on bond spreads, bond liquidity, and the company's access to capital.

 

Corporate (non-financial)

Please see Corporate (financial) above. 

12.3. Additional information.[OPTIONAL]

Each equity and fixed income analyst crafted a custom questionnaire to measure E, S and G performance for the companies within their coverage.  Development of the ESG questionnaires was guided by the following 18 factors identified as the most relevant for our investment universe (largely high grade North American companies):

-Environmental factors: climate change, water and energy use, waste management, regulatory threshold and compliance, assessment and disclosure

-Social license factors: health & safety, privacy & data, labour relations & employment quality, human rights, community relations & social media, product responsibility

-Governance factors: board, ownership, business ethics, legal & regulatory compliance, executive compensation, disclosure, gender diversity


Top