NN Investment Partners (NN IP) has strengthened its Responsible Investing (RI) framework to include a stringent definition of ESG integration which sharpens focus and increases positive results for investors.
NN IP has set high standards to assess and document the integration of ESG criteria in its investment analyses. First, the experts identify material ESG issues per company, per sector and per country. This is followed by an evaluation of a company's performance on each relevant ESG aspect. During this step, potential controversies and impacts are revealed. Finally, it incorporate this assessment into the investment analysis. For each individual investment analysis the integration of E, S and G factors needs to be demonstrated and documented in a consistent way, to improve risk-adjusted returns.
Valentijn van Nieuwenhuijzen, chief investment officer at NN Investment Partners said: "We are convinced of the benefits of integrating ESG criteria into the investment process for our equity, fixed income, and multi-asset strategies. Focusing on ESG factors enables our analysts to unlock potential value by identifying the associated opportunities and/or risks. Our fund managers then use this as the basis for their investment decisions. We have assessed all our assets according to our strengthened definition of ESG integration, and are proud to reveal that we consistently integrate ESG criteria into the majority of our assets. We will continue to extend this process for other strategies where relevant."
Currently, ESG criteria are consistently integrated for the majority (66%) of NN IP's AuM, amounting to €176bn. This includes the assets we manage in Sustainable and Impact strategies. While its Sustainable strategies focus on selecting today's and tomorrow's sustainability leaders (AuM €17.4bn), the Impact strategies target companies whose products or solutions make a clear, positive contribution to the UN Sustainable Development Goals (AuM €1.9bn).
Examples of NN IP investment strategies in which ESG is not yet fully embedded include asset-backed securities (ABS), derivative portfolios and some multi-asset strategies. This is mainly due to the nature of the asset class or portfolio construction.
NN IP is committed to further increasing the number of assets in which it integrates ESG factors in the investment process where relevant. Restrictions that arise from regulations and/or the NN Group exclusion list are always applicable.