Sustainability

Sustainability risks are integrated into the investment process. The definition of sustainability risk is an environmental, social or governance event or circumstance which, if it occurs, may have an actual or potentially negative material effect on the value of the investment. 

Companies selected for the investment portfolio must meet the ‘big five’ quality criteria, including sustainability.

As part of the ESG¹ analysis developed by DoubleDividend Management (hereinafter also ‘the Administrator’), research is carried out into the criteria applied by the Administrator in the field of environmental, social and corporate governance aspects. The ESG analysis of environmental and social aspects is divided into three global challenges that the Administrator believes are the most important to the quality of society.

The analysis assesses whether the companies make a substantial effort with respect to any of the following challenges:

CLIMATE

ECOSYSTEMS

WELL-BEING

The 17 UN Sustainable Development Goals have been ranked under the three identified global challenges, thus integrating the SDGs into the sustainability policy. 

The ESG analysis ensures that sustainability risks are integrated into the investment process through the analysis of a large number of quantitative and qualitative sustainability indicators and thus the sustainability risks are identified. If the sustainability risks are estimated to be too high, investments will not be made. Sustainability risks are thus part of investment decisions and investment monitoring; in order to limit these sustainability risks, selection takes place at the gate and the investment portfolio is actively monitored.

DoubleDividend takes (possible) adverse effects on sustainability factors into account when making investment decisions. The Administrator has included a number of indicators in its ESG analysis that take the sustainability factors into consideration.

In this context ‘sustainability factors’ are defined as environmental, social and employment matters, respect for human rights, and the fight against corruption and bribery.

The indicators applied by the Administrator include at least the indicators stated in Table 1 and the relevant indicators of Table 2 and 3 of the technical standard pertaining to EU Regulation 2019/2088 (SFDR).

The possible adverse effects on sustainability factors are assessed for each indicator based on publicly disclosed information. The Administrator notes that it is dependent on the availability of non-financial (sustainability) information from the companies as well as the quality of this data. 

As of the 2022 financial year the Administrator includes information about the main adverse effects on sustainability factors in the annual report.