Willem Schramade discusses the impact of engagement strategies on sustainable equity investments

Ahead of the Sustainable Investment Forum Europe taking place in Paris on the 12th March 2019, we caught up with Willem Schramade, Senior Portfolio Manager at NN Investment Partners, to discuss the impact of engagement strategies on sustainable equity investments.

Could you tell us a bit about the NN Global Equity Impact Opportunities strategy?

We aim to achieve a strong societal and financial return. We do so by investing in companies that create a lot of value for society. Such companies offer innovative solutions that help achieve the SDGs. They are often higher quality, higher growth, and smaller companies than the typical index constituents. To ensure a strong societal return, we put a lot of effort into impact measurement and peer comparisons – which in turn requires engagement with all investee companies. To ensure a strong financial return, we apply a disciplined and thorough ESG integrated investment process that builds on a proprietary database of 3,000 impact stocks.

Highlights:

• Proprietary database that identified 3,000 stocks with impact potential, allowing us better screening & tracking
• Our MIT impact criteria provide clarity in the absence of standards: Material, Intentional and Transformational
• Integrated analysis: we take an integrated perspective on impact, ESG, business models and financials
• We engage with all our holdings for better measurement, conviction, reporting, and sharing of best practices
• Serious measurement ambition: beyond footprints, combining qualitative & quantitative, towards impact return

What are the biggest trends and themes you're seeing in sustainable equity investing in 2019?

Measuring exposure to the SDGs is the major trend we see. Ambitious asset managers want to show this and increasing number of data providers are developing tools for tracking exposure to the SDGs. We analyzed 15,000 companies on exposure to the SDGs, but we still need external data on this as well, to validate these findings.

Could you explain how NNIP uses engagement strategies to help listed companies make a positive environmental and social impact?

Impact investing in listed equity is a challenging field. Data is often not available as companies have only just begun to report on impact. That makes engagement essential. It allows us to obtain relevant data from the companies and to get a better sense of their ability to have an impact. And it’s beneficial for the companies as well. They appreciate feedback on their sustainability efforts as they tend to get very few investor questions on it. The feedback mails we send them allow them to show that investors are interested in these topics and raise internal awareness. They also like our sharing of best practices on impact and sustainability reporting. Many companies ask us about ways to improve their reporting, choosing KPIs, meeting likeminded investors and about dealing with sustainability ratings agencies. So, with our engagement, we also make an impact on our investee companies.

NNIP is sponsoring our upcoming Sustainable Investment Forum Europe. Why did you choose to be involved in the event?

The event offers a good mix of investors, policymakers, media and corporates. And the big questions (like the introduction of a serious carbon price) are not avoided!

You're participating in a panel discussion at the Forum focusing on how investors and corporates can help meet the Sustainable Development Goals (SDGs). Could you explain briefly why this is an important topic to you?

We invest for impact and the SDGs are a great yardstick for impact!

 

NN Investment Partners is a Platinum Sponsor at the Sustainable Investment Forum Europe, which is taking place in Paris on the 12th March 2019, find out more here. 

Visit NN Investment Partners website here.