Kempen publishes Annual Stewardship and Sustainable Investment Report 2021
Kempen Capital Management publishes its Annual Stewardship and Sustainability Investment Report 2021. Detailing the significant progress made towards embedding sustainable investing across Kempen’s investment strategies.
In light of the dramatic events in Ukraine in recent days, the urgency of the global energy transition has never been clearer. In the coming months and years, becoming less dependent on fossil fuels from a climate perspective will go hand in hand with becoming less dependent on fossil fuels from a geopolitical perspective.
Kempen’s annual report provides information on our ambitions to reduce the carbon footprint of our assets under management.
For the first time, all portfolios of which Kempen is in direct control will be managed with the dual objectives of traditional risk/return and targeting to decrease the carbon footprint of portfolios by 7% annually until 2030.
Over the course of 2021, Kempen’s asset management portfolios became less carbon intensive. As the coverage of the carbon footprint analysis of Kempen’s assets grew to €39.4 billion (2020: € 34.2 billion), the total financed carbon emissions decreased to 2.1 million tonnes of CO2e (2020: 3.4 million tonnes of CO2e).
This change was reflected across both internally managed Kempen funds and external funds through active portfolio decisions. However, carbon data carries a 12-month lag and the coronavirus pandemic significantly reduced global carbon emissions therefore playing a significant role in the decrease of the portfolios’ carbon footprint.
Voting and engagement
In 2021 Kempen voted at 437 distinct company meetings, with 14% of votes cast against management. Kempen withheld or abstained on at least one point in 66% of meetings. Furthermore, Kempen voted against management on 56 out of the 102 shareholder proposals tabled at the general meetings, including on gender pay gap (5), lack of independent chairperson (5), climate change (10), social proposals (12), shareholder rights (19) and political lobbying disclosure (5).
Kempen divides dialogues with companies into ‘engagements for change’ and ‘engagements for awareness’.
In 2021, Kempen engaged directly with 132 companies on environmental, social and governance themes. Of these, 90 engagements were for change carried out by the firm’s portfolio managers and sustainability team. Kempen also engaged with an additional 204 companies in collaboration with peers.
Kempen’s three priority themes within sustainability are ‘Climate Action & Biodiversity’, ‘Smart & Circular Economy’ and ‘Living Better for Longer’. In 2021, the firm published its latest Biodiversity Policy, joined the Partnership for Biodiversity Accounting Financials (PBAF) and signed the Finance for Biodiversity Pledge, committing to set concrete targets by 2024.
Kempen also launched its Kempen SDG Farmland Fund in 2021, which has started investing in agricultural assets which offer attractive returns while contributing to sustainable food production.
Further roll out of our sustainability scoring
In 2021, Kempen continued the roll-out of its proprietary Sustainability Spectrum framework, which scores external managers across public and private markets, while defining client sustainability preferences. The framework helps investors define whether a financial product or service aims to be responsible, or whether it has more ambitious goals and aims to be sustainable or generate impact.
By the end of 2021, Kempen has applied the Sustainability Spectrum scoring methodology to 387 internally - and externally - managed funds, representing more than 57% of Van Lanschot Kempen’s AUM.
Lars Dijkstra, Chief Sustainability Officer said: ‘Kempen continues to take an active approach to implementing sustainability-led change, and our 2021 annual report demonstrates the difference that can be made by systemic, target-based engagement.
While we are pleased with the progress made within our investments to date, we continue to innovate our ESG policies. For the first time, all of the portfolios we are in direct control of will be managed with dual objectives. No longer will we only focus on the traditional risk/return objectives, we will also target to decrease the carbon footprint by 7% annually until 2030. Furthermore, we have developed our own forward looking Kempen ESG-scores for companies which are fully integrated in the investment process of all our liquid strategies.
‘We believe we differentiate ourselves in the market as an independent wealth manager through entrepreneurial sustainability and by firmly connecting our ambitions, actions and accountability.’
About Kempen Capital Management
Kempen Capital Management is a specialist asset manager with a focused approach and a clear investment philosophy. We believe in long-term stewardship for our clients and other stakeholders. Kempen provides sustainable returns, fiduciary management services, manager selection, portfolio construction and monitoring, alongside a number of actively-managed investment strategies. As of 31 December 2021, Kempen Capital Management had a total of €91,9 billion in client assets under management.
Kempen Capital Management, part of Van Lanschot Kempen, is a specialist and independent wealth manager. Kempen Capital Management NV is licensed as a manager of various UCITS and AIFs and authorised to provide investment services and as such is subject to supervision by the Netherlands Authority for the Financial Markets. Kempen Capital Management (UK) Ltd is licensed as an investment manager and authorised to provide investment services, and, as such, is subject to supervision by the Financial Conduct Authority.