In line with PRI principle No.1 (Incorporation of environmental, social and governance factors in analysing investments and in the decision-making process), Eurizon has adopted a financial instrument selection methodology that takes into account environmental, social and governance factors, as an integral part of the investment process, aimed at controlling risks, of a reputational nature as well.

ESG and SRI principles are applied to all active management funds, both benchmark-based and flexible.
These include specialised ESG products, which consider specific factors and use an appropriate internal ESG rating system, and ethical products with dedicated benchmarks that are managed in respect of strict criteria in selecting positive and negative issuers.
ESG criteria are not applied to passive/index-linked products, and to so-called “wrapper” products (such as, for instance, funds of funds, retail and unit-linked portfolios).

 

More in detail, Eurizon has identified the following three stages:

SCREENING OF ISSUERS GEARED TO IDENTIFYING THOSE MORE EXPOSED TO ENVIRONMENTAL, SOCIAL, AND GOVERNANCE RISKS, OR THAT DO NOT MEET SUSTAINABLE AND RESPONSIBLE INVESTMENT PRINCIPLES
 
IDENTIFICATION OF ISSUERS WITH A HIGH EXPOSURE TO ESG RISKS AND OPERATING IN SECTORS CONSIDERED NOT SOCIALLY RESPONSIBLE
 
MONITORING OF INVESTMENTS BY THE COMPLIANCE DESK

 

 

 

Issuer selection

Eurizon’s Long Term Sustainable Strategy Team, specialised in ESG/SRI issues, identifies two classes of issuers:

ISSUERS WITH HIGH EXPOSURE TO ESG RISKS - “CRITICAL ISSUERS” ISSUERS ACTIVE IN SECTORS CONSIDERED AS “NOT SOCIALLY RESPONSIBLE”
ISSUERS DIRECTLY ACTIVE IN THE PRODUCTION, STORAGE AND TRADE OF:
Using data provided by specialised info-providers, the issuers with the lowest ESG sustainability rating in the global stock, emerging, and corporate investment universe are selected. - Anti-personnel mines
- Cluster bombs
- Nuclear weapons
- Depleted uranium
- Biological weapons
- Chemical weapons
- Non detectable fragments weapons
- Blinding lasers
- Incendiary weapons
- White phosphorus


These issuers are identified based on evidence acquired through specialised info-providers.

 

The list of issuers is periodically updated, shared with the Investment Director and the Sustainability Desk, and submitted to the Sustainable and Responsible Investments Committee.

For the “CRITICAL ISSUERS” and those operating in “NOT SOCIALLY RESPONSIBLE” sectors, specific limitations on investments are imposed and, where appropriate, the activation of specific processes that provide for engagement with the companies invested in as part of the asset management process.

The Sustainable and Responsible Investments Committee monitors the effects of engagement activities, assessing:

  • In case of positive feedback from the issuer, the possibility of removing the issuer from the list of monitored issuers;
  • If no improvements are made, the possibility of initiating disinvestment from assets under management, or of extending the monitoring period.

 

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