Sustainability in the investment process
Sustainable investment solutions and concepts are increasingly popular. The idea behind them is to take sustainability criteria into account when selecting financial investments with an environmental or social orientation.
Greater transparency of information enables investors to consider non-financial factors when analysing investments and thereby make investment decisions in accordance with ethical and moral values.
Clearly defined responsibilities
At VP Bank, the CSR (Corporate Social Responsibility) Board is responsible for sustainability issues. These issues include such topics as the operating environment, social responsibility and investment solutions. A member of Group Executive Management sits on the CSR Board.
The CSR Board’s Investments and Products committee is responsible for investment themes. The committee directs and coordinates VP Bank Group’s orientation as regards sustainable investments. The committee has the following responsibilities:
Definition of the sustainability philosophy in the investment process
Selection and retention of external partners
Certification of the offer or investment process
Sustainable selection process
A holistic sustainability approach also entails the responsible management of the funds to be invested. In that regard, a diverse range of investment approaches and strategies exist that may be applied to varying degrees.
For the implementation of its sustainable investment strategy, VP Bank applies screening criteria (ethical and standards-based) as well as a best-in-class or best-in-sector selection process for investments that factors in environmental, social and governance (ESG) criteria. In this manner, the bank analyses the risk exposure of companies in a sector and how they address those risks.
For its sustainability analyses, VP Bank relies on the know-how of an established sustainability specialist. This specialist covers vast segments of the asset management investment universe and, using professional research, supports VP Bank as it implements sustainability criteria in the investment process.
Offer of sustainable investment solutions
Since April 2017, VP Bank offers a flexible sustainable investment solution that can be tailored to the client’s needs. The investment selection process is carried out along the lines of the ESG approach, with environmental, social and governance factors.
Impact of the expanded criteria
In addition to fulfilling one’s own ethical and moral convictions, the application of sustainability criteria to investment decisions has other positive effects on the portfolio:
Avoidance of tail risk events through the identification and exclusion of companies with the corresponding risks
Positive influence on the company development as regards environmental, social and governance aspects
Identification and use of investment opportunities through the expansion of analytical criteria
The offer of sustainable investment solutions will be further expanded in the years ahead.