Promotion of environmental or social characteristics as part of discretionary management (Article 8)
The funds selected under the directives promoting environmental and social criteria must meet extremely strict standards. Our external provider’s selection team takes this into account by integrating environmental, social and governance (ESG) considerations into the selection process for sustainable financial products, thus guiding investments into investment funds that promote environmental and social characteristics or themselves have sustainable investment objectives.
Choosen approach to respecting the environmental or social characteristics as part of discretionary management (Article 8)
The ESG criteria are an integral part of the selection process for investment funds. The financial products selected are the result of close collaboration between investment specialists and sustainability experts from our external provider. Though this teamwork, they ensure that neither financial performance nor sustainability performance are compromised.
When selecting investment funds, particular attention is paid to the traceability and transparency of the sustainability processes, including through documenting processes and drawing up ESG reports. The concept of integrating sustainability risks, including controversial issues, must be a key component of the strategies of the investment funds selected.
To be selected as a sustainable product, the investment funds must exclude from their investments any companies that are involved in the controversial arms trade or generate more than a specific percentage of their revenues from either arms and tobacco, or nuclear or coal-based energy, unless these companies can demonstrate that they have an exit strategy towards more sustainable energy sources. Companies involved in gambling and the alcohol trade shall be scrutinised very closely. In addition to these exclusion criteria, our external provider’s specialist team supports and favours proactive attempts by the fund managers to engage in dialogue with the companies involved in critical sectors. An additional requirement for the funds selected is that they invest in companies that comply with the UN Global Compact Principles.
Our external provider’s specialists obtain information on ESG metrics from fund managers and third-party data suppliers. This information is compiled at the level of the directive to verify that the funds selected adhere to the ESG pillars (e.g. having E, S and G ratings or contributing to sustainable development causes).
Furthermore, the team works alongside the fund managers in order to accept, implement and improve ESG themes and processes.
Sustainable investments as part of discretionary management (Article 9)
In accordance with the sustainable directive our external provider’s selection team chooses investment funds with a strong ESG focus, thus prioritising investments in funds that have sustainable investment as an objective.
The distinguishing feature of these investment funds is their pursuit of unambiguous, sustainable objectives. Typical examples are green and social bonds forming part of the fixed income, as well as initiatives relating to thematic funds that invest in companies proposing solutions to environmental and social problems.
The sustainable directive primarily draws from funds that have a sustainable investment objective.
Although such an objective may not be specifically targeted, it forms part of the sustainable directive due to its strong alignment with the United Nations’ Sustainable Development Goals (SDGs) and a carbon intensity well below the index.