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Sycomore Asset Management

PRI reporting framework 2020

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You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

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.
Corporate (non-financial)
0 Screening alone
0 Thematic alone
37 Integration alone
56 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
7 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.

Screening + Integration + Thematic (7% Fixed Income AUM)

Sycomore Next Generation (SNG) launched in 2019 is an SRI-labelled balanced fund. 

SNG's approach consists in filtering the universe for the best SPICE scores (rating above 2.5 out of 5) and selecting stocks and bonds based on 3 themes: 

- Better environment 

- Better life 

- Better work 

Screening + integration (56% Fixed Income AUM)

Sycomore Selection Credit (SSC) is Sycomore AM's only corporate-bond SRI-labelled fund.

SSC's SRI approach consists in filtering the universe to exclude companies that are too risky on 6 key criteria:
1. Environmental risk 
2. Quality of social climate 
3. Reputation risk 
4. Financial communication risk 
5. Accounting risk 
6. Bondholder risk 
An issuer that obtains a rating below 2 out of 5 on one of these criteria (or on the overall ESG score), will be excluded from the investable universe. This approach screens out over 30% of the initial universe.

Integration (45% Fixed Income AUM)

For the other internally managed fixed-income assets (held within flexible, multi-asset classes vehicles) we apply the same SPICE integration process as for listed equities.

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
Corporate (non-financial)
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  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

Indicate who provides this information  

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

We collect data first and foremost through company annual and sustainability reports and one-to-one meetings with management/sustainability/human resources teams. We also use third-party information such as publications from brokers, calls with various experts, NGO publications, newspapers, social networks, etc.

For the two following specific ESG issues, that are controversy analysis and involvment in controversial activities, and evaluation of products, we also use data by ESG research providers. These are used as raw data and support information, that are integrated by our in-house analysts following our own analysis framework and ESG integration philosophy. 

We also use Trucost environmental data for reporting purposes.

The main difference between the ESG analysis for fixed-income and listed equity is that access to ESG information is often more difficult for non-listed bond issuers. 

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:

specify description

          The robustness of our ESG analysis is also ensured through meetings with companies, during which issuers can be given the opportunity to review our research.
        

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]


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