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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.

After the ESG screening process, we conduct an ESG integration process in the form of a detailed ESG analysis of an issuer, on the 3 key pillars E, S and G, that enables the analyst to assess the global ESG policy of the issuer and to allocate a proprietary ESG score (from 1 to 5, 5 being the highest score).

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

Corporate (non-financial)

After the ESG screening process, we conduct an ESG integration process in the form of a detailed ESG analysis of an issuer, on the 3 key pillars E, S and G, that enables the analyst to assess the global ESG policy of the issuer and to allocate a proprietary ESG score (from 1 to 5, 5 being the highest score).

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 (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]


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 (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 (non-financial)

For each analysed issuer (new investment case or update of an existing investment case), the analysts of Trecento AM assess the global ESG policy implemented or not by the issuer and assign a proprietary ESG score (from 1 to 5, 5 being the highest score). This analysis materialises by a proprietary evaluation grid that is adapted to the specificities and the rampant environmental/social risks of a sector or sub-sector. By principle, the analysis of the governance of an issuer is the same whatever the sector or sub-sector. Each evaluation grid includes between 40 and 45 indicators, the analysis of each of them is qualitatively commented, formally documented and duly sourced.

The evaluation grid enables the analyst to score each of the E, S and G criteria and result in a score for each E, S and G factor. The ESG global score of an issuer is a weighting of these individual scores, depending on the number of indicators amongst each factor.

12.3. Additional information.[OPTIONAL]


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