THREE TYPES OF SUSTAINABLE FUNDS
- Best-in-class funds invest in companies from a broad range of sectors, that are the best performers in terms of sound corporate governance, social policy and environmental approach. By working only with the best 40% of businesses, and as few as 20% in the ining and energy sectors, companies are challenged to operate more sustainably. The funds also include bonds from the most sustainable countries. Criteria for this include the welfare of the population, care of the environment and international relations.
- Theme funds invest in firms that pursue solutions in the area of climate change, water shortages and alternative energy sources.
- Impact Investing funds comprise 50 innovative businesses that are completely rethinking themes like mobility, energy, health and population ageing, and formulating surprising solutions to them. These are often slightly smaller (listed) players, but they have still come through KBC Asset Management’s stringent screening.
STRINGENT SCREENING: EXCLUSIONS
Thorough screening, based on strict and clear rules, is carried out to determine which companies and countries qualify for the investment universe for sustainable and responsible investment solutions. We exclude investments in certain companies due to their controversial activities. We also review our sustainability criteria on an ongoing basis. KBC Asset Management places a great deal of emphasis on transparency, which is why it makes all its research results and the full list of exclusions available on www.kbc.be.
Sustainable and responsible investing stands or falls by its credibility. The sustainability policy and criteria are therefore monitored by the SRI Advisory Board, which is fully independent of KBC. The body consists of leading academics from several universities, who are experts in fields like human rights, business ethics, biology and ecology. They operate in their own name and do not represent the institutions at which they are employed. They decide which screening methodology we should use and set the criteria for rating companies. They also ensure that screening is complete, thorough and accurate.
KBC Asset Management pursues an active policy of proxy voting and engagement. By exercising the rights attached to shares held by the investment funds and by making our voice heard at the annual general meetings of these companies, KBC aims to defend the interests of our clients and investors. We do so by proxy voting, when deemed appropriate and necessary. KBC Asset Management applies this active voting policy to several different themes, recognising that business, corporate governance and sustainability issues all determine the value of a company in the medium and long term. All these factors can have a significant impact on value creation or the return enjoyed by clients and investors.
To contribute further to the growing problem of climate change, KBC has also decided to make its sustainable investments ‘fossil free’. Consequently, all KBC SRI funds divested themselves of their investments in coal, oil and gas companies at the end of 2017. he focus in 2017 was on raising awareness among our branch staff through campaigns and information sessions. Thanks to this enhanced knowledge and awareness, our branch staff are now offering sustainable investments proactively in addition to conventional nvestments. The fruits are already appearing: the target we set ourselves in 2016 of doubling the volume of SRI to 5 billion euros by 2018 had already been reached by the middle of 2017. This means that sustainable investments already account for approximately 6.5% of total client portfolios. We have decided in the meantime to raise our target to 10 billion euros of SRI by 2020.
UN Global Compact
UN Guiding Principles on Business and Human Rights
UN Environment Programme Finance Initiative (UNEP FI)
Principles for Responsible Investment (PRI)
Task force on Climate-related Financial Disclosure
OECD Guidelines for Multinational Enterprises
Belgian SDG Charter