Our investment universe is screened on a quarterly basis with a view to identify companies that are violating (or at risk of violating) NN's norms-based RI criteria.
The set of companies for which potential violations are structurally monitored is based on the investment universe of NN Group/NN IP. This screening will be applied to the extent that data is available, on the basis of input provided by external data/research providers. A specialised external engagement provider may provide additional advice.
In case there are strong indications that an issuer may be in violation of any of NN's norms-based RI criteria, a decision needs to be taken with regard to whether NN considers this a violation. Examples of such indications can be research from NN's external ESG research or engagement provider(s), inputs from NN's own (investment) staff or information from NGOs or media sources.
Violations can currently occur in relation to the following areas:
· Human Rights
· Labour Rights
· Bribery and Corruption
The responsibility to assess whether or not issuers are in violation of NN's norms-based RI criteria to the ESG Committee of NN IP. The ESG Committee is advised by the Controversy and Engagement Council. This council consists of representatives from NN IP as well as NN Group staff (from Investment Office and Corporate Citizenship), which will ensure relevant perspectives are included in the decision making and communicated back to the respective stakeholders.
The four key decisions to be taken by the ESG Committee in relation to the application of NN's norms-based RI criteria are:
1. Whether or not an issuer is considered in violation of NN's norms-based RI criteria;
2. Whether or not engagement to address the violation is considered feasible;
3. Whether or not to formally include the issuer in NN's engagement program; and
4. If the issuer is in violation and not included in NN's engagement program, whether to recommend the NN Group Management Board to put the issuer only on the Internal Restricted List or also on the (publicly available) Exclusion List.
If the ESG Committee determines an company is in violation of NN's norms-based RI criteria, and considers engagement to address the violation feasible, the company can be formally included in NN's engagement program.
Each engagement has to be supported by an engagement plan that outlines the objectives, milestones, timeframes, and engagement activities to be carried out. The executors of the engagement will maintain an archive of these reports.
The potential executors (or coordinators) of the engagements, depending on the context, type of engagement, and available capacity, are:
· Analysts NN IP
· Portfolio Managers NN IP
· RI team representatives NN IP
· Through collaborative engagements other institutional investors can engage on behalf of NN
· External Engagement provider(s)