Regarding screening, Altis, a fully owned subsidiary of NN IP that selects and monitors external fund managers for institutional and retail clients, but operates at arms' length, performs ESG screening both on company level as well as on sovereign for active investment strategies. Company screenings are typically related to exclusion of controversial product types (e.g. nuclear weapons or tobacco) and controversial behavior (e.g. severe breaches of UN Global Compact principles in the area of human and labor rights, environment and anti-corruption), while sovereign screenings are typically related to exclusion of controversial countries with significant UN or EU sanctions. These screens can be tailor-made to client beliefs and values, alongside the minimum criteria set by law.
With regard to thematic strategies, investments in the listed equity space relate primarily to environmental technology themes or SDG-related strategies. Next to the continuing coverage of water and/or carbon emission strategies, in 2018 coverage has expanded on several themes. For example, the coverage of equality strategies and health focused strategies. These strategies might relate to Sustainable Development Goals (SDGs) but are not specifically set up for these goals. In the corporate bond space, thematic investments relate primarily to green bonds, social bonds and sustainable bonds.
The integration approach focuses on all the steps of the investment process and whether ESG aspects are taken into account, for active investment strategies. For example, we would look at how ESG factors are taken into account in universe screening, in fundamental/quantitative analyses, portfolio construction, ESG goals, whether there is engagement and active voting, and reporting. On the passive side, the integration strategy entails the development of a custom index whereby companies are weighted based on ESG factors. Also here, we do take into account whether there is engagement and active voting.