Van Lanschot Kempen: Stewardship & Sustainable Investment Report 2022

Van Lanschot Kempen: Stewardship & Sustainable Investment Report 2022

ESG-investing
Algemeen (13) rapportage

Van Lanschot Kempen publishes its annual Stewardship and Sustainability Investment Report 2022.

The report gives detailed insight into what has been achieved with regards to sustainable themes and activities for institutional, semi-institutional and private clients and highlights the significant progress made towards embedding sustainable investing across its Investment Strategies.

Lars Dijkstra, Chief Sustainability Officer said:

'Last year we deliberately took time to solidify the foundations upon which our investment teams integrate sustainability at every step in their decision-making. In 2023, we are continuing to monitor and improve the companies we invest in by using our Sustainability Risk Score and performing corresponding engagements, as well as focusing on achieving tangible improvements using our milestone approach. As a firm, and along with our stakeholders, we acknowledge our contribution to the successful functioning of financial markets around the world. As we look at delivering strong investment performance, we continue to support our clients by providing transparency, both in regulatory terms but also by helping them to navigate the three most significant transitions facing us today: energy, food and materials.'

Voting and engagement

In 2022, Van Lanschot Kempen engaged directly with 165 companies on environmental, social and governance themes through our investment strategies (up from 132 in 2021). This represents nearly 50% of equity holdings in terms of number of investee companies. Throughout 2022, Van Lanschot Kempen voted at 427 distinct company meetings, with 15% of votes cast against management.

Van Lanschot Kempen separates dialogue with companies into ‘engagements for change’ and ‘engagements for awareness’. Of the 165 engagements, 106 were engagements for change carried out by portfolio managers and the responsible investment team. These were mainly focused on environmental (56 engagements) and governance issues (41). Van Lanschot Kempen also engaged with 87 companies for awareness on general sustainability issues, governance, and around their AGM agenda items. The company also engaged with an additional 196 companies in collaboration with peers.

Aligning to UN Sustainable Development Goals

For the third year in a row, Van Lanschot Kempen assessed the alignment to the UN Sustainable Development Goals for a number of its sustainable funds relative to their benchmark, and based on an assessment of an external data provider. The three funds considered are the Global and European Sustainable Equity Funds and the Sustainable European Small Cap fund.

The aggregated alignment of sustainable equity funds to SDG related themes increased sharply in 2022. Of the aggregated AuM of the three funds (€ 731 million), € 32.6 million was aligned to themes such as energy and climate in 2022, up from € 7.3 million in 2021. Per every million euros invested in the three sustainable equity funds over 2022, there was a positive alignment of € 33,260 across Sustainable Energy (connected to SDG 7) and € 33,350 with Climate Mitigation (connected to SDG 13).

On social themes, the three sustainable equity funds in aggregate (€ 731 million) made a net positive contribution of € 37.4 million to seven social themes. For every million euros invested in these sustainable equity funds over 2022, there was a positive alignment of € 41,010 with Health (SDG 3) and € 14,010 with targets such as no poverty and improving access to education, clean water and energy (a combination of SDG 1, 4, 6, 7).

Carbon Footprint

Van Lanschot Kempen is committed to decreasing the carbon footprint of portfolios by 7% every year, as part of its target to become a net-zero wealth manager by 2050, with a reduction of -50% by 2030.

Compared to 2021, the carbon metrics of most funds decreased in 2022 with the figures showing that most Van Lanschot Kempen funds are less carbon intensive than their industry peers. This indicates that the companies in the portfolios have a relatively lower carbon intensity compared to their industry peers. A significant reduction was also seen in the weighted average carbon intensity of funds, which is our leading metric.

Further roll out of proprietary sustainability scoring

In 2022, Van Lanschot Kempen implemented its proprietary Sustainability Risk Score across all funds. The score combines external ratings with in-house views and expertise on company holdings across 20 ESG risk factors, making it more forward looking and reducing the dependence on external data sources. This results in a consistent score for each company across investment portfolios and both, credit and equity strategies.

In 2022, investment teams placed a greater focus on carbon emissions and corporate governance. This involved using a more extensive combination of external data for a refined custom scoring framework based on precisely defined sub-issues. The framework reflects the targets the investee company has set, the way the investee company manages these targets, and how management is incentivised to reach them, thereby enabling ongoing measurement against a company’s decarbonisation ambitions. This is directly linked to Van Lanschot Kempen’s own net zero goals.