Sustainability-related disclosures
Sub-funds that integrate sustainability risk into investment decisions, promote environmental or social characteristics and invest in companies with good governance practices:
The environmental and social characteristics promoted by the Sub-Fund comprise of mitigating environmentally detrimental practices (including those that may contribute to climate change such as tar sands and thermal coal extraction), reducing the production of controversial weapons, and promoting responsible business practices as defined by the principles of the UN Global Compact.
In identifying investments which allow the Sub-Fund to promote environmental or social characteristics. Specifically, the Investment Manager will:
- assess the overall suitability of an issuer based on the ESG score provided by a recognised data providers.
- screen out issuers based on ESG scores as well as on their involvement in certain industries or sectors as further detailed below.
The Sub-Fund seeks to exclude certain issuers based on ESG concerns. Issuers that are judged to have weaker ESG scores may be excluded. Issuers whose revenue is significantly derived from activities or products that are considered unsuitable for the Sub-Fund.
The Investment Manager has access to information on a variety of ESG-related sustainability indicators provided by third party data providers including MSCI, and Sustainalytics, which assists with the assessment, measurement and monitoring of the environment or social characteristics promoted by the Sub-Fund. These sustainability indicators measure, among other aspects, the exposure to companies active in the fossil fuel sector, exposure to controversial weapons and violations of the UN Global Compact principles. The Investment Manager uses this data to screen the underlying assets invested in by the Sub-Fund on an ongoing basis against its exclusion policy.
The environmental characteristics promoted by this Sub-Fund comprise of efforts to gain exposure to companies which provide products, services and solutions that contribute towards reducing environmental and natural resource pressures on the Earth.
The themes that the investment strategy are based on consider a wide range of environmental concerns, including natural resource exhaustion, and the impact this is having on government policy, company strategies and consumption behaviour.
As part of the investment process, the Investment Manager will also seek to identify and avoid issuers that participate in specific areas of activity that the Investment Manager deems to be harmful from an environmental perspective.
This takes into consideration the importance of good governance practices and excludes those companies in breach of the principles of the UN Global Compact which includes principles relating to human rights, labour, environment and anti-corruption.
The Investment Manager has access to information relating to certain, environmental, social and sustainability indicators provided by both issuers and third party data providers, which assists with the assessment, measurement and monitoring of any environmental characteristics promoted by the Sub-Fund as a result of the investment objective and strategy that the Sub-Fund follows. This might include, for example, issuers that have been involved in violations of the UN Global Compact Principles or those active in the fossil fuel sector. The Investment Manager uses this data along with its own proprietary responsible investment research resources to select and manage the underlying assets invested in by the Sub-Fund on an ongoing basis.
The environmental or social characteristics promoted by this Sub-Fund comprise of efforts to:
- Identify and avoid issuers that participate in specific areas of activity that the Investment Manager deems to be harmful from an environmental, social or governance perspective or which do not follow good governance practices. This includes the exclusion of those companies in breach of the principles of the UN Global Compact which includes principles relating to human rights, labour, environment and anti-corruption.
- Identify and invest in issuers that are proactively seeking to manage social & environmental factors well to generate sustainable returns.
When determining whether an issuer engages in sustainable business practices and meets the Investment Manager’s ESG and sustainability criteria, the Investment Manager considers whether the issuer (i) engages in such practices in an economic sense (e.g. the durability of the issuer’s strategy, operations and finances), and (ii) takes appropriate account of the economic, political, governance and regulatory environment in which the issuer operates, which includes assessment of an issuer’s environmental, social and/or governance practices.
The Investment Manager’s criteria incorporate elements of negative and positive screening alongside general and security level ESG-related analysis.
No investment will be made in a security that is deemed to have material ESG issues intrinsic to their business or economic activities, such as a tobacco company due to the health implications of smoking.
When determining whether an issuer meets the Investment Manager’s ESG and sustainability criteria the Investment Manager uses a combination of external and internal data, research and ratings which are both quantitative, qualitative, in nature.
The Investment Manager has access to information relating to certain environmental, social and sustainability indicators provided by both issuers and third party data providers, which assists with the assessment, measurement and monitoring of any environmental or social characteristics promoted by the Sub-Fund as a result of the investment objective and strategy that the Sub-Fund follows. Such indicators may include, among other aspects, the degree to which an issuer may be exposed to activities that may be considered harmful to the environment or society. This might include, for example, issuers that have been involved in violations of the UN Global Compact Principles, those active in the fossil fuel sector or those involved in the manufacture of controversial weapons. The Investment Manager uses this data along with its own proprietary responsible investment research resources to select and manage the underlying assets invested in by the Sub-Fund on an ongoing basis.
The environmental or social characteristics promoted by this Sub-Fund comprise of efforts to:
- Identify and avoid issuers that participate in specific areas of activity that the Investment Manager deems to be harmful from an environmental, social or governance perspective or which do not follow good governance practices. This includes the exclusion of those companies in breach of the principles of the UN Global Compact which includes principles relating to human rights, labour, environment and anti-corruption.
- Identify and invest in issuers that are proactively seeking to manage social & environmental factors well to generate sustainable returns.
When determining whether an issuer engages in sustainable business practices and meets the Investment Manager’s ESG and sustainability criteria, the Investment Manager considers whether the issuer (i) engages in such practices in an economic sense (e.g. the durability of the issuer’s strategy, operations and finances), and (ii) takes appropriate account of the economic, political, governance and regulatory environment in which the issuer operates, which includes assessment of an issuer’s environmental, social and/or governance practices.
The Investment Manager’s criteria incorporate elements of negative and positive screening alongside general and security level ESG-related analysis.
No investment will be made in a security that is deemed to have material ESG issues intrinsic to their business or economic activities, such as a tobacco company due to the health implications of smoking.
When determining whether an issuer meets the Investment Manager’s ESG and sustainability criteria the Investment Manager uses a combination of external and internal data, research and ratings which are both quantitative, qualitative, in nature.
The Investment Manager has access to information relating to certain environmental, social and sustainability indicators provided by both issuers and third party data providers, which assists with the assessment, measurement and monitoring of any environmental or social characteristics promoted by the Sub-Fund as a result of the investment objective and strategy that the Sub-Fund follows. Such indicators may include, among other aspects, the degree to which an issuer may be exposed to activities that may be considered harmful to the environment or society. This might include, for example, issuers that have been involved in violations of the UN Global Compact Principles, those active in the fossil fuel sector or those involved in the manufacture of controversial weapons. The Investment Manager uses this data along with its own proprietary responsible investment research resources to select and manage the underlying assets invested in by the Sub-Fund on an ongoing basis.
The characteristics promoted by this Sub-Fund may include positive allocation to issuers with stronger (better) Environmental, Social and Governance (ESG) ratings while potentially excluding issuers with weaker (worse) ESG ratings. Other characteristics promoted by this Sub-Fund may include removing exposure to issuers with business revenue or operating activities that are considered by the Investment Manager to demonstrate excessive environmental, social or reputational sustainability risks.
In identifying investments which allows the Sub-Fund to promote ESG characteristics, the Investment Manager screens and excludes certain instruments and issuers using ESG criteria to create a reduced, ESG optimised investment universe. Within that investment universe, the Investment Manager positively allocates towards higher scoring, best in universe, ESG issuers. The Investment Manager will also structurally allocate to positive impact instruments and issuers and target a carbon intensity below the level of the Benchmark.
The Investment Manager uses a combination of external and/or internal sustainability-focused research as well as ‘bottom-up’ credit research and relative value assessments to assist with the assessment, measurement and monitoring of the environment or social characteristics promoted by the Sub-Fund. This sustainability evaluation is conducted prior to an investment and on an ongoing basis after an investment is made and includes: (1) assessing the overall suitability of an issuer or instrument using an internal sustainability assessment performance process; and (2) avoiding issuers based on their material exposure to certain business activities using external data inputs. The sustainability indicators that the Fund takes into consideration may include: Violations of UN Global Compact principles and / or Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons).
Sub-funds that integrate sustainability risk into investment decisions and have sustainable investment as their objective:
This Sub-Fund’s sustainable investment objective is to achieve positive environmental and/or social impacts while generating a total return comprised of income and capital growth by investing in a broad range of Euro-denominated debt and debt-related securities and related FDI.
The Sub-Fund’s benchmark, the Bloomberg Barclays MSCI Euro Corporate Green Bond Index, (the “Benchmark”) only includes fixed-rate, investment-grade Euro denominated green corporate bonds, which are a subset of the wider corporate bond market. The Benchmark is aligned with the objective of sustainable investment as the proceeds of these bonds are used to finance specific projects with a positive environmental goal. This is differentiated from a broad market index that does not have the same green credentials or composition. Additional information on the Benchmark including information on the methodology used for its calculation can be found here: https://www.msci.com/our-solutions/indexes/bloomberg-msci-esg-fixed-income-indexes
The Investment Manager uses a combination of external and/or internal sustainability-focused research as well as ‘bottom-up’ credit research and relative value assessments to assist with the assessment, measurement and monitoring of the impact of the sustainable investments invested in by the Sub-Fund. External data sources include Bloomberg, MSCI, Sustainalytics, Vigeo and Eiris. This sustainability evaluation is conducted prior to an investment and on an ongoing basis after an investment is made and includes: (1) assessing the overall suitability of an issuer or instrument using an internal sustainability assessment performance process; and (2) avoiding issuers based on their material exposure to certain business activities using external data inputs. The sustainability indicators that the Sub-Fund takes into consideration may include: GHG intensity of investee companies; Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises; and / or Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons).
