- “We developed our own ASG score, we excluded tobacco from our investments and we restricted the firms exposed to oil sands”
- NN IP ensures that making the transition to a more sustainable world is a “complex” task that can be tackled alone, so associating is “key”
- The manager highlights the “strong link” that exists between the long-term impact of an integration of ESG criteria and the improvement of risk-adjusted returns.
- “We have decided to be active investors, both in debt and in shares, and to commit ourselves to those companies in which we invest”
By Funds Society, Madrid
NN Investment Partners has been integrating environmental, social and good governance (ESG) criteria into its investment processes for 20 years. In its last annual responsible investment report, the manager celebrates its progress last year in this regard. “We are committed to many companies in different areas, we develop our own ASG score, we exclude tobacco from our investments and we restrict the companies exposed to oil sands”, says the manager, who considers that articulating alliances is “key” to be able to continue building a more sustainable world.
“There is a lot to expect from 2019,” the report says. In this sense, NN IP reveals that it has begun to collaborate with the Yale Initiative on Sustainable Finance through an academic branch of research called “Giving value to investors from sustainability” and points out that, at the same time, they will continue to expand their margins of sustainability and impact.
“We will also improve and expand the way we report on our responsible investment capabilities in order to meet the growing demands of our customers in that regard,” he says.
NN IP emphasizes that making the transition to a more sustainable world is a “complex” task that can be tackled on its own, so associating is “key” for them, both with clients, and with investors and international organizations. “As a result, we develop solid investment products and have a greater positive impact on society,” they say.
As for other milestones of last year, in 2018, the manager again received the highest score (A +) of the Principles of Responsible Investment (PRI) and its assets under management in sustainable and impact funds and individual mandates increased in a 53% to reach 16,500 million euros.
In addition, they made “significant progress” with palm oil, leading several commitments with various plantation companies. In particular, they pushed them to pursue a more sustainable policy. In this sense, this year they will become a member of the Roundtable on Sustainable Palm Oil (RSPO) to “continue to strengthen” their commitment to this sector.
The manager highlights the “strong link” that exists between the long-term impact of an integration of ESG criteria and the improvement of risk-adjusted returns, which adds to its positive effects on society and the environment. “In addition, we have strategies for Sustainability (15.388 million assets) and Impact (1.161 million), which have an even greater focus on ASG,” the report highlights.
NN IP includes these factors in a large number of assets (equities, fixed income and multi-assets) and, it says, is “continuously improving” the way it does it. In particular, it evaluates the ESG criteria at the country, sector, company and even asset level and starts up-down and bottom-up analysis.
To the integration of these criteria, also join voting and commitment activities in a wide range of products and an exclusion list for all of them. “We have decided to be active investors, both in terms of debt and shares, and to commit ourselves to those companies in which we invest,” says the document, which emphasizes that the manager’s goal is to support these companies so they can start up a more sustainable approach.
This includes everything from sharing codes of good practice to managing shareholder expectations. ” This makes the firms in which we invest more resistant and increases their potential for performance and, at the same time, increases our positive impact on society as a whole,” says NN IP.