LEADERS UNIVERSE SUSTAINABLE PRIVATE MARKETS

We have an integrated approach to responsible investment and ESG research that is embedded within our investment approach, and is supported by our culture of collaboration, sharing of research and ideas, and robust debate. In developing our understanding of a business we take into account its approach to managing environmental, social and governance issues, as well as any controversies that may have arisen.

In 2018 we launched a proprietary and innovative responsible investment (RI) ratings system that combines an assessment of a company’s financial stewardship with an analysis of how well it manages its material ESG risks (using the SASB framework). Combining both aspects into a single, forward-looking company rating from 1 ( strong) to 5 (weak), reflects our conviction that prudent management of financial and ESG factors is important to a company’s ability to create long-term, sustainable value. Utilising data science and cloud computing, the RI analytics and ratings add to our fundamental research, providing our global investment teams with a more robust and evidence based RI capability, with coverage across 5,500 global listed equities.

Cardano is a pure-play sustainable investment manager with 30 years’ experience in the field. Cardano brings on board proven technology and a dedicated team of sustainability professionals with industry-leading expertise in planetary boundaries, social foundations, environmental, social and governance (ESG) data and research, impact and stewardship.

Cardano has a sustainability framework across the group which is an extremely rigorous, hands-on and action-based approach focused on ensuring continuous improvements in those companies in which we invest.

The framework is based on the concept of doughnut economics, with our investment activities and portfolios applied within clearly delineated social foundations and planetary boundaries.  In terms of the boundaries, the current state of the world is that we are in overshoot (meaning using more than the planet can replenish itself). This is on carbon/climate, deforestation, water use in water-scarce areas and biodiversity.  On the social foundation, we are in undershoot on topics like living wage, access to nutrition or access to medicine.

Based on this approach, we have identified 7 transitions that are ongoing or should be started. Cardano wants to play a leading role in these transition from a dual perspective. Making our investment portfolios more resilient and creating an impact on the real world/real society.

We have translated the themes that our in over- or undershoot into measurable targets. These targets reflect the points where there is no longer an under- or overshoot. In total, we have 7 amongst others:

• Climate-neutral in 2050
• Water neutral by 2030
• No net loss of biodiversity by 2030
• Zero deforestation by 2030

We use all our tools available to reach these targets with a focus on the real-world impact mentioned. We have created a model of influence, setting out our instruments and the impact they have in the real world. Buying or selling stocks or bonds is the lowest-scoring element in our model.

Fundamental to our approach is our screening of companies according to their compatibility with our view on the transitions ethical principles and our expectations across seven key sustainability drivers: fossil fuel use, water use, land use, circular economy, issues around waste and chemical use, human capital management and human rights and governance. We assess companies and entities in terms of adaptivity. Are companies willing and able to transition to become part of the sustainable world within the planetary boundaries and the social foundation.

This holistic view determines whether we add a company to our investment portfolio – and also informs our stewardship engagement and voting activities. Unlike some of our competitors, it also applies to all the assets we manage.

M&G Investments is a global asset manager with a long history investing and innovating across both public and private markets. We’re part of M&G plc, an international savings and investment business with the ambition to deliver long term value for our investors while working together to create a more positive future. We recognise that clients are increasingly looking to align their investments with their environmental and social values. This is why our investment decisions are underpinned by our commitment to investing responsibly. Considering material environmental, social and governance (ESG) factors is an integral part of our investment approach. Combining market-leading research with our own proprietary data, we believe this helps us make more informed investment decisions. We also pro-actively engage directly with the businesses we invest in to help drive positive change. M&G has committed to reducing our own carbon emissions to net-zero by 2030 and to achieving carbon net-zero investment portfolios by 2050.

VLK IM is an asset manager with a long-term investment approach. We strongly believe in engaged shareholdership that benefits all stakeholders. As a long-term responsible investor, we firmly believe that active ownership and shareholder engagement contribute to positive change across the board. To implement our vision we engage with our investees on strategic, financial and environmental, social, governance (ESG) topics. Our long-term investment worldview combined with a thorough analysis and experienced ESG team allow us to leverage our fully integrated active ownership approach as a means to consistently encourage positive change. Through this process of integrating material governance and sustainability factors in our investment decisions and constructive engagement we’re able to contribute to the development of principles and standards of corporate responsibility at the companies that we invest in.

Our responsible investment activities fall under the following four categories:

• Exclusion and Avoidance – Those companies we don’t invest in
• ESG Integration – Ensuring sustainability risks and opportunities are adequately considered in our investment analysis and processes
• Active Ownership – Being responsible stewards of our clients’ capital and using our influence to improve corporate behaviour on specific ESG issues
• Positive impact – Investing with an objective to achieve positive real world outcomes and impact, such as contributing to the UN Sustainable Development Goals

CBRE Investment Management seeks to deliver sustainable real asset solutions through strategies focusing on direct real estate, indirect real estate, real estate credit, infrastructure and private equity, and listed real assets. We have the responsibility and opportunity to enhance the sustainability of the environment, the well-being of people and to positively influence our operating partners, occupiers, supply chain and industry. Our Sustainability Vision (“Vision”) recognizes that ESG factors are fundamental to our business and to drive long-term outperformance in the real assets portfolios we manage. We seek to implement our Vision through our stewardship, including influencing our operating partners, underlying managers and investee companies.

In our Vision, we seek to lead the transition to a sustainable, net-zero carbon, resilient, equitable and healthy society. Recognizing that this can be achieved only as a collaborative effort, we encourage our partners to join us in delivering this ambition together. We focus on three material ESG topics, identified through comprehensive stakeholder engagement:

• Climate: Address climate-related risks and opportunities by focusing on delivering net-zero carbon performance and physical resilience.
• People: Champion diversity, equity, inclusion and the well-being of our people and other stakeholders.
• Influence: Engage and positively influence key stakeholders where we do not have direct management control

A leading Investment Manager with Sustainability Expertise

Ranked among the world’s largest asset managers with more than $1.1 trillion assets under management (€1.1 trillion), Natixis Investment Managers delivers a diverse range of solutions across asset classes, styles, and vehicles, including innovative environmental, social, and governance (ESG) strategies and products dedicated to advancing sustainable finance. With more than €479 billion assets under management in responsible, sustainable and impact investments, we’re one of the top active managers in the world.

Our Sustainable Investing Approach: One Goal, Many Paths

At Natixis Investment Managers, we bring experts together because we believe it is the best way to solve the key challenges facing investors. That includes experts in responsible, sustainable and impact investing from more than 15 high-conviction affiliated managers, each with its own unique culture, investment style and DNA. This expert collective provides investment solutions across all asset classes to help investors allocate capital towards climate transition and natural capital, as well as identifies risks and opportunities among a wide range of other sustainability themes such as biodiversity, water, social, health, nutrition, digital and robotic.

We engage with our clients in order to understand their unique sustainability needs, help them navigate complexity, turbulences and challenges, and to accompany them at every step of their sustainable journey, as a trusted and strategic sustainable expert and partner. We certainly don’t have all the answers, but we do have a sustainable investing legacy that stretches all the way back to 1984, a deep understanding of the complexity confronting investors and a large offering across equities, fixed income, multi-asset, private assets and liquid alternatives.

Our Framework For Sustainable Investing

Our framework divides the sustainable investing universe into three broad categories – responsible, sustainable and impact strategies and is designed to help clients better navigate the ever-expanding sustainable investing universe

• Responsible: Aim to deliver ESG performance by integrating binding ESG factors for risk-adjusted return perspective
• Sustainable: Aim to deliver sustainable outcomes by investing E or/and S related sustainability themes
• Impact: Aim to deliver a positive, meaningful, and measurable S and/or E impact to the world and the society alongside a financial return

From responsible to sustainable to impact managers, we believe our multi-affiliate model is uniquely positioned to meet our clients’ needs wherever they are on their sustainable investing journey.

At Invesco, our commitment to sustainable investing is a key element of our ambition to be the most client-centric asset manager. For many of our clients, long-term value creation and effective risk mitigation are fundamental to achieving their investment goals. As a result, we offer a range of sustainable investment solutions that help our clients to express their values across active, passive, equity, fixed income, real estate, multi-factor, and other exposures.

At the direction of our clients, we are able to integrate material extra-financial factors, including ESG factors, that help us as we seek to deliver strong outcomes to clients. As investors in global equities, corporate and sovereign fixed income instruments, as well as real estate and multi-asset strategies, we recognize the differences between asset classes and geographies. We are able to apply ESG principles in a variety of ways and the degree is dependent on the asset class and strategy.

In general, our teams may consider ESG as one input to their investment process as part of a holistic consideration of the investment risk and opportunity. Our portfolio managers have absolute discretion on the view taken on any given ESG risk or opportunity and may consider the following core aspects:

• Materiality: The consideration of ESG issues on a risk-adjusted basis and in an economic context. We do not view ESG aspects as constraints, aside from certain restrictions driven by legal obligations in certain territories.
• Momentum: The concept of improving ESG characteristics over time is particularly interesting in our view. We find that companies whose ESG practices are improving may enjoy favourable financial performance in the longer term.

• Engagement: We take our responsibility as stewards of capital very seriously and see engagement as an opportunity to help achieve long-term value creation. Dialogue with portfolio companies is a core part of the investment process for our fundamental teams. We often participate in board-level dialogue and are instrumental in giving shareholder views on management, corporate strategy, transparency, and capital allocation, as well as wider ESG aspects.

And at the heart of our approach is a dedicated Global ESG Team, who act as a centre of excellence to guide and support our investment managers, as well as informing and directing our ESG focus.