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Investing sustainably is challenging because everyone has different beliefs and values. We focus on one guiding principle:
do not invest in companies that are destructive to the planet.
Because everyone's values differ, it's not a surprise that there are many different criteria for sustainability defined by several institutions and agencies. Each of the funds in your portfolio adheres to one or more of the following standards:
UNPRI is a set of principles created by the United Nations and that investment funds can adhere to. By signing, the fund provider commits themselves to apply ESG factors in the investment process and maintain an active dialogue with companies to ensure sustainability factors are met. Furthermore, they must vote on the basis of sustainability at shareholders' meetings.
Environmental, Social, and Corporate Governance (ESG) refers to the three factors in measuring the sustainability and societal impact of a company. Good governance essentially means that the company is "well run". For instance, it implies that all stakeholders in a company have a fair weight in the decision making.
Companies all over the world can pledge to the United Nations Global Compact. When doing so, they commit to responsible business practices in the areas of human rights, labour, the environment, and corruption.
Investment funds have to classify themselves according to their level of sustainability. There are three classifications:
These are funds without sustainability ambitions. The portfolios do not deal with any of these funds.
These funds promote environmental or social characteristics as part of their investment strategy. For instance, they may choose to exclude certain companies and sectors.
An impact investment fund goes a little further than an ESG fund and has sustainability as its main objective. The achievement of a financial return is second to the positive contribution they wish to make to the planet. Microcredit and green bonds are examples of impact investment funds.
The portfolios only work with ESG investment funds.
Discover how each of the funds meets sustainability standards.
The premise of our policy on socially responsible investing is to avoid investing in companies that exhibit unacceptable behaviour and leave the planet and people worse off. We promote limiting (the consequences of) climate change as well as improvements in the field of social themes and working conditions. In our asset management, we invest at least 90% in investments that tailor to these ecological and social characteristics.
Morningstar's Sustainability Rating is used to measure the sustainability policies of the funds. An average rating of 25 or below is the target. This is measured on a scale of 0 to 50, where 0 represents negligible risk to non-sustainability and 50 represents serious risk.
ISIN: IE00B5456744
This fund offered by Vanguard promotes environmental and social characteristics by excluding companies from the following industries:
Morningstar Sustainability Rating: 20.25 (as of January 11, 2024)
ISIN: IE00BKV0W243
This fund offered by Vanguard promotes environmental and social characteristics by excluding companies from the following industries:
Morningstar Sustainability Rating: 23.78 (as of January 11, 2024)
ISIN: IE00BJN4RG66
The fund promotes environmental and social characteristics by excluding companies that:
You can learn more about what socially responsible investing means to us (in Dutch).
Morningstar Sustainability Rating: 20.04 (as of January 11, 2024)
The funds above invest in companies or company bonds. The portfolios are also made up of two funds that invest in Euro government bonds:
These funds do not apply sustainability criteria. However, they are still considered to match the investment principles for not being destructive to the planet because European governments are among the most sustainable globally. This is based on the results of European countries in the Sustainable Development Report 2020. This report contains a ranking and score of 192 countries on how well they score on achieving the Sustainable Development Goals (SDGs) set by the United Nations. A score of 100 indicates that these goals have been achieved.
The table below highlights that the top 10 countries which are all European. Furthermore, all countries represented in the two government bond funds are in the top 30.
There are European government bond funds that have strict sustainability. However, the conclusions show that the sustainability scores of Euro countries are close enough so there's little value to be gained. Furthermore, they come at a higher cost and at the expense of less diversification.
As mentioned above, the Morningstar Sustainability Rating is used to check whether the sustainability policies of the selected funds are still in line with the criteria.
When the implemented policy of a fund is no longer in line with the conditions of the selection process, or that the rating in the Morningstar Sustainability Rating is lower than in the previous measurement, the fund manager is asked for an explanation. If the explanation is not satisfactory, the fund may be removed from the investment strategy.
You can learn more about what sustainability means to us (in Dutch).