Sustainability lasts longer, both for our world and for our capital. We are aware of the fragility of the earth and the role that companies have to play to keep it livable for future generations. That is why we internally assess all our investments on Environmental, Social and Governance (“ESG”) factors. We do this in a clear manner and based as much as possible on clear data. However, there is one more important step before this, because at the basis of our decision to invest in a company we ask these questions:

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1. What does the company do?

Does their service or product play a role in achieving a more sustainable world? Does it help us as humanity forward by offering smart solutions for the problems of today and tomorrow? Is there a culture at the company that clearly communicates this? As a fund manager, we answer these questions with a qualitative assessment of the company. This is reflected in a score that plays an important role in our selection process.

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2. What is the ESG score?

Our ESG assessment comes second. The input  is more data driven. Sources for this are our research and the interviews we have with the companies that we have or are considering including in the portfolio. We maintain a list of several dozen European companies for this purpose. These are rated for: “Environmental” (the "E"). Criteria that are taken into account: level of CO2 emissions, water and energy consumption, recycling and material use, distribution methods and contributions to more circularity. Positive impact on the transition process towards clean energy weighs heavily.

 

“Social” criteria (the “S”) include, for example, safe working conditions, fair opportunities for all, fair incomes, social projects, charity and gender equality. Finally, “Governance” (the “G”) also weighs in. This involves looking at the ability of companies to properly weigh and serve all interests of stakeholders in the company. Certainly not easy, but we want our companies to be well-governed and to operate transparently and fairly. In case of doubt or lack of dialogue, we do not cross the Rubicon. 

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3. What are the sustainability risks?
Our calculation of the chance that our investment can be impeded by sustainability risks also plays a role. Herewith you can think for instance of physical risks because a factory floods or burns down as a consequence of climate change. Next to this, we identify transition risks because a polluting fabrication process is regulated or forbidden. Reputational damage is also a risk that can emerge when a company misbehaves and clients avoid doing business with the company.

 

Ultimately, a company must score well at all levels. Otherwise, it is not eligible for investment. In the last resort, where appropriate, we test our findings against the data of external ESG rating agencies. We have access to their reports via databases and, in the event of conflicting conclusions, we investigate further and talk to the company in question. Read more about our sustainability policies on our documents page.