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NN Investment Partners

PRI reporting framework 2019

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Innovation

SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

1. NN IP green bond investment process filters out "greenwashing" green bond issuers

In our Green Bond investment approach we ensure that we only invest in bonds that have a clear positive impact. We believe that it is essential to make our own assessment of every Green Bond issue to ensure that it meets the minimum standards specified in the Green Bond Principles (GBP) and Climate Bond Initiative taxonomy (CBI). Therefore in addition to the four components of the Green Bond Principles (GBP) and Climate Bond Initiative (CBI) taxonomy, NN IP distinguishes itself by also assessing the greenness of each issuer as part of its green bond investment process by analysing its Sustainalytics ESG performance score. In addition a Green Bond governance workstream has been established in 2017 to ensure a proper due diligence and governance on the assessment of the eligibility of an issuer as a green bond for our investment strategy. The RI team performs the due diligence.

 

2 Incorporating proprietary academic research findings in our equity investment analyses

In 2016 we introduced an update to our proprietary integrated equity research template, with amongst others the following, to the best of our knowledge, very innovative elements:

The introduction of an internal ESG rating,based on the results of our research partnership with ECCE. For this internal ESG rating we normalise absolute ESG scores by sector and market cap to improve comparisons between companies. More importantly we also take into account ESG controversies and, uniquely, ESG momentum. This allows us to identify trends in a company's ESG behaviour and better capture the alpha signals related to a company's ESG behaviour for equity. WE also have some findings available for fixed income and the relationship between yieldspread and controversies.

The introduction of an impact analysis of all companies we research for sustainable equity. This impact analysis describes whether a company is creating positive impact through its products and/or its operations. This enhances our ability to identify and report on the positive impact the companies under our research have.

 

3. We work on a pilot to incorporate gender balance data in equity analysis for the sustainable impact range. We will evaluate in 2019 on the experiences and applicability of the data. 

 


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