ACRA has assigned ESG-6, category ESG-C to Elektroenergetika Equity Fund of Sber Asset Management JSC (hereinafter, the Fund), which corresponds to a high score in the field of the environment, social responsibility and governance. According to the ESG assessment methodology, this assessment also means that sufficient attention is paid to environmental, social responsibility and governance issues.
The assessment is driven by the structure of the Fund, which invests in the shares of companies in the electricity and infrastructure sectors of the economy. The core part of the portfolio is made up of shares of mainly Russian companies engaged in the production, transmission and sale of electricity, heat, provision of other utilities, as well as those involved in the implementation and/or are the beneficiaries of infrastructure projects.
The Fund’s manager, Sber Asset Management JSC, is a subsidiary of Sberbank (ACRA rating AAA(RU), outlook Stable) and is included in the non-financial reporting of Sberbank Group (hereinafter, the Group). The Group, including all the companies that are part of it, applies a systemic approach to integrating ESG factors and sustainability aspects into all areas of operations and is characterized by high quality corporate governance.
Sber Asset Management JSC’s sustainability priorities are based on the Environmental, Social, Governance and Sustainability Policy of Sberbank.
KEY ASSESSMENT FACTORS
The environmental and social responsibility assessment is based on an analysis of the companies in the Fund’s portfolio (see Key Assumptions).
Companies that make up the core part of the portfolio belong to sectors that have a high environmental impact. The structure of the Fund includes fuel-based power generation, which involves considerable emission of pollutants into the atmosphere (including greenhouse gases) and significant water consumption. Therefore, the assessment of environmental impact in terms of quantitative indicators is at a rather conservative level, despite the use of an approach that compares the performance of assessed companies with those of a sample of companies in the industry in Russia and other countries.
The assessment of the analyzed companies’ actions to minimize environmental risks and their ability to counter them, based on public sources of information, is moderate. All of the companies have developed key top-level documents for managing the main industry-specific environmental risks and have implemented environmental management systems. At the same time, the inability to analyze internal documents on environmental risk management limits the risk assessment for Part E (Environment).
The assessment of Part S (Social) is based on the high level of management of social risks and sufficiently high socially responsible business standards of the analyzed companies. All of the companies are responsible employers, contribute to the development of local communities, and implement sustainable development and social responsibility practices in their management systems.
The assessment of this part is limited by the inability to analyze internal documents on social risk management.
Part G (Governance) is assessed with regard to Sber Asset Management JSC. The assessment stems from the high corporate governance standards of the parent company (Sberbank), high level of integration of ESG principles in management practices, and strong reputation of the parent company’s brand.
The assessment of the Governance part is constrained by the absence of independent directors in the board of directors (BoD) of Sber Asset Management JSC and the indicator of average duration of membership in the BoD (BoD stability indicator).
KEY ASSUMPTIONS
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When assessing the Environment and Social parts, the Agency used public sources of data on the companies’ in the portfolio (annual reports, non-financial reports, materials published on the companies’ official websites, publications in the press, etc.);
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The Agency used data provided by Sber Asset Management JSC to assess the Governance part, including a questionnaire sent by the Agency;
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The Agency analyzed and assessed six companies that accounted for 55.13% of the Fund’s portfolio as of September 30, 2021:
· Unipro PJSC;
· Inter RAO UES PJSC
· RusHydro PJSC;
· Rosseti PJSC;
· Gazprom PJSC;
· Enel Russia PJSC.
assessment components
Final ESG assessment: ESG-6.
Final ESG category: ESG-C.
ESG assessment determination: high assessment in the field of the environment, social responsibility and governance. Sufficient attention is paid to the environment, social responsibility and governance matters.
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E assessment: ESG-10.
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S assessment: ESG-6.
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G assessment: ESG-3.
ADDITIONAL INFORMATION
The ESG assessment has been assigned in accordance with ACRA’s ESG Assessment Methodology.
An ESG assessment has been assigned to Elektroenergetika Equity Fund of Sber Asset Management JSC for the first time. The assessment is expected to be revised within one year following the publication date of this press release.
The ESG assessment was assigned based on data provided by Sber Asset Management JSC, information from publicly available sources, and ACRA’s databases.
The ESG assessment is solicited, and Sber Asset Management JSC participated its assignment.
In assigning the assessment, ACRA used only information, the quality and reliability of which was, in ACRA’s opinion, appropriate and sufficient to apply the methodology.
No conflicts of interest were discovered in the course of assessment.
The assigned assessment is not a credit rating.
