Instruments

Stimulate behavioural change

As an active shareholder, we create impact by stimulating a change in behaviour. This can be achieved with a mixture of instruments: screening, engagement, voting, ESG integration, exclusion and impact investing. 

Screening

We believe that companies and sectors will be better prepared for the future when they not only take ESG related risks into account, but also contribute actively to the Sustainable Development Goals (SDGs) of the United Nations (UN). That is why we want to invest actively in these companies. We specifically screen for SDGs, on planetary boundaries and on the ACTIAM Fundamental Investment Principles. Our active approach enables us to select companies that score highly on these aspects.

Engagement

We conduct hundreds of engagement conversations per year. These engagements are linked to our sustainability goals, such as COreduction goals as part of energy transition engagement. In collaboration with academic institutions, we measure the effect of engagement on the real world, such as carbon emissions. We apply 3 methods of engagement:

  • Responsive engagement:

    we respond to controversies or violation of our Fundamental Investment Principles and suggest possible improvement measures. When responsive engagements are unsuccessful, the next step will be exclusion.
  • Proactive engagement:

    we raise the issue of potential risks and present possible improvement measures.
  • Collective engagement:

    to increase the impact, we engage with companies together with other investors.

Voting

As shareholder we in principle vote at all shareholders' meetings. When necessary, we submit our own resolutions, which can be specific ESG related subjects such as remuneration based on a sustainability performance. We either file these resolutions independently or we join forces with others (co-filing) when this may benefit the result. Please click here to see how ACTIAM has voted.

ESG integration

We integrate ESG criteria into the investment process, which is demonstrated in a relative company ESG score. We also apply such scores to countries. The higher the score, the lower the risk. The score also reflects on how a company or country performs. Naturally, our focus themes Climate, Water and Land are also sufficiently taken into account. The ESG score of the portfolio measured to market value must always exceed the benchmark. Our portfolio managers know that they have to realise a positive difference in ESG scores.

Structure ESG score

The ESG score is built up from:

  1. Base scores: We review companies on aspects that are relevant to the sector and/or company. This review is carried out by the external data supplier MSCI ESG Research  A decisive factor for the scores is the risk versus the management of the relevant aspects.
  2. Sector score: To compare companies in different sectors, we use the quantitative negative or positive impact on our focus themes Climate (COemission), Water (water use in water scarce regions) and Land (deforestation). Examples of sectors with a negative impact are: oil, gas & fuels, metals & mining and utility. Sectors with a positive impact are for example sustainable energy and software & services.
  3. Analysts score: Subsequently, we take our own view on the sustainability performance of companies into account when determining the final ESG score. Companies with which are under responsive engagement will be given a lower ESG score. Pioneering companies or those which contribute to our focus themes and/or the SDGs, will be included in the portfolio.

Exclusion

Weapon manufacturers, manufacturers of cluster bombs, tobacco producing companies and companies involved in animal testing that do not comply with our norm, are excluded. Exclusion is the last resort we deploy. We prefer to initiate engagement to realise a change in behaviour.

Please find here an overview of companies excluded

Please find here an overview of sovereigns excluded

Impact investing

Our impact investing team has a proven financial and social track record. Through impact investing, we offer scalable investment solutions, predominantly in emerging and developing economies. Due to this positive and measurable impact, we contribute, amongst other things, to meeting the UN Sustainable Development Goals.