Integration

What impact do companies have on the transition to a more sustainable economy? And how does the transition impact companies? For instance, how will climate change affect a corporation and what efforts are being done to prevent this? For some time now, we have been closely looking into a company’s sustainable credentials, in addition to its financial performance. As a result, sustainability is fully integrated into our investment process.

Sustainable Spectrum Methodology
Close to 60% of Van Lanschot Kempen AuM – both internally and externally managed funds - is scored by our Sustainable Spectrum Methodology. This helps us to determine at what level of sustainability an investment solution stands. We do not offer flavour 1 and 2 proactively to our clients. In 2023, 2% of the scored funds scored Do Good, 34% scored Do better, 54% scored Avoid harm and 9% scored Basic.

Sustainability Risk Score
In our investment process for the Kempen investment funds, we employ a proprietary Sustainability Risk scoring approach. This score combines external ratings with our own perspectives and knowledge about the firms in which we invest. Scores become more forward-looking and consistent as a result, also allowing us to absorb the results of our engagements with firms more swiftly. In addition, we put extra focus on carbon emissions and corporate governance. This links directly to our own net zero goals.

How it works

External risk ratings are used as default and combined with our own views on companies based on in-depth assessment, engagement and proprietary research.

Our view can indicate likely improvements or deteriorations in sustainability status that are not (het) reflected in the default scores.

Focus

Given the importance of carbon emissions and corporate governance, the team uses a more extensive combination of external data for a refined custom scoring framework for these issues.

The framework reflects the targets the company has set, the way these are managed and how management is incentivised to reach them.

The benefits

• Sustainability Risk Score can correct external ESG data
• Quick integration of the outcomes of engagement in the score
• This makes the score more forward looking
• Resulting scores are absolute and can be used as a comparison of risk between companies
• Score gives a consistent view of how exclusion and engagement thresholds are set.

Back to our Sustainability approach

There’s a saying in Dutch, Kom verder, it means many things and it’s our business philosophy. It captures the way we work with clients but also the way we steer our investee companies to deliver shareholder value through active engagement.

Capital at risk. The value of investments and the income from them can fall as well as rise, and investors may not get back the amount originally invested. Past performance provides no guarantee for the future.