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:
- ESG Integration
- Active Ownership
- Positive impact
At Kempen, ESG criteria are an integral part of the investment process. This means that portfolio managers perform an in-depth analysis of ESG data and material ESG risks and opportunities weigh into how they select and monitor their companies. When selecting external managers we assess their responsible investment policy and implementation capabilities.
Kempen bases its criteria for responsible investment on the international conventions such as the United Nations Global Compact (UNGC) and the Principles for Responsible Investment (PRI). In combination with the Guiding Principles on Business and Human Rights, these two frameworks build the foundation of Kempen’s ‘Convention Library’.
The investment portfolios that we manage or invest in are analysed taking into account ESG factors, both using our internal know-how as well as our ESG data provider, MSCI ESG Research. This screening applies to in-house funds and funds managed by external fund managers.
The screening and internal analysis of companies identifies ESG laggards and specific incidents at play. Based on this framework, companies’ valuations can be altered if the issues are deemed material. In addition, the engagement cases are selected. Should a company be involved in an issue fundamentally contrary to KCM ESG criteria, a company will be excluded from the investable universe.
Kempen deliberately opts for dialogue with the companies we invest in and with external fund managers. This dialogue or ‘engagement’, allows us to encourage companies to improve policies and practices in which specific ESG issues have been identified.
Systematic and well-rounded approach
Kempen deliberately opts for engagement process, improving ESG standards at companies and fund managers we invest in, preferably through a thematic approach. Our focal themes in the last years have been:
The investment teams work in tight collaboration with the responsible investment department. The engagement is focused on laggards in the portfolio aiming to raise the level of ESG policies and practices within companies and fund managers.
In addition, we apply an engagement approach for core fixed income. Via discussion groups, Kempen enters into dialogue with credit rating agencies, benchmark providers and other fund managers to encourage the integration of ESG indicators in country ratings and country valuations.
Working in collaboration
We believe we increase our impact and stewardship when we directly engage with the companies and fund managers we invest in. Furthermore, Kempen believes in the strength of collaborative engagement. Through cooperation with other investors and fund managers, we can increase the leverage of our engagement activities.
Governance & Voting
Exercising voting rights is an essential part of responsible investment and active ownership. In line with our fiduciary duty we vote in the best interest of our clients. We believe that voting is essential to a democratic and functioning governance system. Our voting activities comprise voting at shareholder meetings in person, as well as by proxy.
Voting records are retained for all votes cast with accompanying explanations as appropriate.
We annually report on voting in our Responsible Investment Report, while also publishing Voting records.
In 2015 the countries through United Nations have adopted the 17 Sustainable Development Goals (SDGs). The goals which consist of 169 sub targets aim to end poverty, protect the environment and create prosperity for all by 2030. Global partnerships between the governments, private sector and the civil society are important part of this new development agenda and are needed to increase financing for SDGs. Through its investment activities Kempen would like to contribute to the global development agenda.
In the Netherlands together with 18 Dutch banks, pension funds and insurance companies have been part of the Sustainable Development Goals Investment (SDGI) Initiative. Through this group a common SDGI agenda was created. See the ‘Building Highways to SDG Investing’ for more information. Van Lanschot Kempen is also taking part in the SDI Impact Measurement Group via the Platform for Sustainable Finance of the Dutch Central Bank.
“Using our influence to encourage positive change”Valeria Dinershteyn