Get app
What does this mean at Curvo?
On 10 March 2021, the European Sustainability Disclosure Regulation ("SFDR") became applicable. Curvo is a trade name of NNEK. Under the SFDR, NNEK must disclose information on how it considers sustainability risks in its investment decisions and how its remuneration policy does not encourage sustainability risk-taking. In addition, NNEK must explain whether it considers the main adverse effects of entity-level investments.
NNEK integrates sustainability risks into its investment decisions. A sustainability risk is defined by the European legislator as an environmental (environment), social (people or society) or corporate governance (corporate governance) event or circumstance which, if it occurs, may cause a material adverse effect on the value of the investment.
Examples of sustainability risks may lie in climate change (protection, adaptation and transition), human and labour rights disputes (human resources management, remuneration policies), working conditions (child labour, employee health and safety), corporate governance (corruption, money laundering, fiscal integrity) and dealing with nature (deforestation) and environment (pollution).
NNEK invests only in investment funds. The managers of these funds are responsible for integrating sustainability risks into the investment policy of the fund they manage. NNEK selects funds that apply active ownership and/or invest in companies that exclude sustainability risks as much as possible. In addition, NNEK's investment strategies have a wide spread across sectors and regions which helps to mitigate sustainability risks.
NNEK periodically monitors the sustainability risks of its asset management concepts. For this purpose, NNEK uses the Morningstar Sustainability Rating. This tool allows NNEK to determine the ESG risk of its investments. For each asset management concept, NNEK aims for a Morningstar Sustainability Rating of 25 or lower on a scale 0-100, where 0 represents negligible ESG risk and 100 a very serious risk.
If NNEK finds that a fund's policies are no longer in line with the terms of the selection process, or that the rating in the Morningstar Sustainability Rating is substantially higher than in the previous measurement, the fund manager is asked for an explanation. Unsatisfactory explanation may result in NNEK no longer wanting to invest in the fund in question and removing the fund from its investment strategies. NNEK continuously refines its monitoring process based on increasingly available sustainability data.
The remuneration policy is aligned with NNEK's risk profile and aims to promote, attract and retain good qualified employees. All NNEK employees receive a fixed salary. This salary is tailored to the competences of the employee. For a few positions, it is possible that the employee may receive appropriate variable remuneration in addition to a fixed salary. The amount of any variable remuneration is very limited compared to the fixed income and is linked to both financial and non-financial performance criteria. The non-financial performance criteria focus on acting with integrity, care and customer focus, with a focus on the long-term interests of the customer and our company. In addition, NNEK has the ability to adjust and claw back variable remuneration under certain circumstances. The policy and measures NNEK has put in place for variable remuneration do not encourage undesirable behaviour, such as taking irresponsible (sustainability) risks.
Investments can adversely affect environmental, social and governance factors. For example, investments can contribute negatively to climate change, poor health, poor working conditions, or loss of biodiversity. NNEK has different asset management concepts. For this reason, we have chosen not to include adverse effects on sustainability at entity level. For each asset management concept, we determine whether or not adverse effects are included. The rule here is that if our socially responsible policy applies to an asset management concept, we include unfavourable effects on sustainability factors for that concept.
If we were to include adverse effects at entity level, we are legally required to report on all mandatory and all relevant additional indicators adverse effects on sustainability (PAI indicators) from Delegated Regulation 2022/1288. Currently, not all this information is available for all our investments or is not available at an acceptable cost. Moreover, we then also need to collect this information for asset management concepts that do not take adverse effects into account. Naturally, we will continue to monitor developments in this area and if more (affordable) information is available, we will reconsider our choice.
European regulation SFDR (Sustainable Finance Disclosure Regulation) was adopted in 2019 and aims to promote the integration of sustainability factors and inform investors about them. The European commission seeks disclosure on these sustainability factors and believes these disclosure rules are necessary to meet the Paris climate goals and make a positive contribution to other social and environmental factors.
Below you can read how the NNEK Social Responsibility Policy applies to the asset management concept Asset Management Curvo.
European regulation SFDR (Sustainable Finance Disclosure Regulation) was adopted in 2019 and aims to promote the integration of sustainability factors and inform investors about them. The European commission seeks disclosure on these sustainability factors and believes these disclosure rules are necessary to meet the Paris climate goals and make a positive contribution to other social and environmental factors.
All that is described here applies to the Asset Management Curvo concept. SFDR requires us to provide sustainability information about our services. This includes the information (Annex II SFDR) prior to the conclusion of an agreement, but also our sustainability policy and any sustainable objectives. Asset Management Curvo's Annex II SFDR can be found here.
SFDR also requires us to prepare an annual Annex IV SFDR report on the results of our policies. This report provides information on how we have integrated environmental, social and governance (ESG) factors into our investment decisions. The report covers a calendar year. This period is determined by the European legislator and reflects the (average) result over the previous four quarters. This means that the information on, among others, the main adverse effects on sustainability factors (so-called PAIs), the largest investments, asset allocation and sector allocation does not reflect the status at the end of the calendar year, but the weighted average per indicator over four quarters. You will receive the Annex IV annually at the same time as your quarterly report on your investments for the fourth quarter. Asset Management Curvo's Annex IV SFDR for the previous calendar year can be found here.
Asset management Curvo falls under Article 8 of the SFDR. This means that this asset management concept promotes ecological and/or social features, but does not have a sustainable investment objective.
This product promotes the following ecological and social features:
NNEK has not identified a reference benchmark for achieving these environmental and/or social characteristics.
As already briefly explained in the summary, the premise of the Social Responsibility Policy is that NNEK wants to avoid investing in companies that show unacceptable behaviour and leave the planet and people worse off. It is also clear that NNEK invests in third-party funds.
The companies and governments in which NNEK invests through third-party funds are then assessed on three factors: Environmental (environment), Social (people and society) and Governance (good governance). NNEK then selects funds based on the classifications 'not socially aware', 'ESG investment fund' or 'impact investment fund'. For funds that only invest in European government bonds, NNEK applies the principle that these funds qualify as an 'ESG investment fund', even if sustainability criteria are not explicitly included in that fund's selection process. The reasoning behind this is that NNEK has established that Euro countries score highly in the SDG ranking on a global scale.
NNEK aims to have at least 90 per cent of its strategies consist of ESG investment funds and/or impact funds. As much as possible, NNEK avoids investing in funds that in turn invest in companies involved in the production of tobacco or controversial weapons, or involved in thermal coal production/extraction. NNEK monitors the funds it invests in for such investments. For monitoring, NNEK uses external independent data providers such as MSCI and/or Morningstar. When a fund invests more than 1% one of these categories of investments, it generates a signal. When NNEK observes, based on its monitoring, that a fund selected in its strategies has invested more than 1% of its fund assets in a company(ies) involved in either the production of tobacco or the production of controversial weapons or the extraction/production of thermal coal, NNEK will enter into discussions with the relevant fund manager regarding this excess. NNEK will ask the fund manager to provide an explanation of this overshoot based on NNEK's monitoring. If NNEK agrees with the fund manager's explanation, NNEK will continue to invest in this fund. When NNEK does not agree with the fund manager's explanation, NNEK will inform the fund manager and indicate that if the overshoot is not reduced, NNEK may decide to stop investing in the fund.
NNEK excludes investing in funds that in turn invest in companies that do not adhere to the standards of the United Nations Global Compact (UNGC). The UNGC is a global sustainability initiative that calls on companies to adhere to 10 principles on human rights, labour, environment and anti-corruption. NNEK monitors the funds it invests in for compliance with the UNGC principles. For monitoring, NNEK uses external independent data providers such as MSCI and/or Morningstar. When a fund fails to comply with the UNGC principles, this results in a signal. In case NNEK receives a signal based on its monitoring, NNEK contacts the relevant fund manager about it. It could be the case that a fund manager has a different opinion on non-compliance with a UNGC principle than the data providers used by NNEK. When NNEK agrees with the fund manager's explanation, NNEK will continue to invest in this fund. When NNEK does not agree with the fund manager's explanation, NNEK will inform the fund manager and indicate that if the fund does not still start complying with the UNGC principles, NNEK may decide to stop investing in the fund. Fund managers must further have signed the Principles for Responsible Investment (UNPRI). Fund managers must also apply some form of engagement, for example by engaging in dialogue with companies and governments and voting with sustainability as a principle at shareholder meetings. Finally, the fund manager of a fund chosen by NNEK is responsible for monitoring whether the companies chosen in the fund, adhere to good governance practices. NNEK, in turn, periodically monitors the fund manager whether it properly carries out its monitoring in companies in the fund, and whether they adhere to good governance practices.
As described above, for the asset management concept Asset Management Curvo, a minimum of 90% is invested in investments aligned with the environmental and social characteristics of the investment strategy. A maximum of 10% consists of investments in Article 6 SFDR products, which have not disclosed specific sustainability criteria. These investments do require the fund managers to be signatories of the UNPRI and that the fund does not include companies that violate UNGC principles.
Investments for the asset management concept Asset Management Curvo is periodically screened for compliance with ESG criteria. In addition, NNEK checks quarterly whether there are UNGC violators in the funds. A decision can be made to part with a fund with violators, or a decision is made to ask deeper questions of the fund. If the answer to the deeper questions is not in line with what NNEK aims to achieve with its investments, the fund will still be removed from the strategy. If NNEK does agree with the fund's explanation, it records the contact and no further action takes place (i.e. the fund can then potentially remain in the asset mix).
The following sustainability indicators (already mentioned earlier under the heading Investment strategy) are used to measure whether the promoted environmental or social characteristics are achieved within Asset Management Curvo.
The monitoring and methodologies used include data sourced from Morningstar/Sustainalytics and MSCI.
Currently, the data NNEK receives from external parties is not always consistent with how the investment fund interprets the data. To ensure the quality of the data, consultations will be held from time to time with the fund managers and external data providers in which investments are made. By monitoring data quality in this way, the data limitation as shown below will not affect how the promoted environmental and social attributes can be achieved within Asset Management Curvo.
The general data limitation includes, but is not limited to: inaccurate and/or inconsistent data. Data collected by external parties may differ from the data published by the fund manager.
Asset Management Curvo avoids as much as possible investing in funds that in turn invest in companies involved in the production of tobacco or controversial weapons, or involved in thermal coal production/extraction. NNEK further excludes investing in funds that in turn invest in companies that do not comply with United Nations Global Compact (UNGC) standards. The UNGC is a global sustainability initiative that calls on companies to adhere to 10 principles on human rights, labour, environment and anti-corruption. Finally, every fund manager must be a signatory to the UNPRI. By strictly applying this selection policy, the environmental and social characteristics promoted by the product can be met and NNEK adheres to its established Corporate Social Responsibility Policy.
There is no engagement policy within Asset Management Curvo on the social and environmental attributes promoted by all three asset management concepts. However, NNEK does check whether the fund manager has drawn up and applies an engagement policy.
The asset management concept Asset Management Curvo does not use a benchmark for achieving the environmental and social characteristics that Asset Management Curvo promotes.
This page was last updated on November 13, 2024.