Sectors from transport to technology may never be the same again in the wake of the global pandemic. Yet in spite of its profound challenges, 2020 was a momentous year for sustainable investment as the amount of sustainability-related funds, data and legislation on the market all grew significantly.
Our first fully digital Stewardship and Sustainable Investment Report offers some food for thought on these trends, and details Kempen’s ongoing work to generate strong financial returns alongside real world impact.
Three key insights:
1) Markets and regulators coming together on ESG
ESG was once seen as a niche area, it is now mainstream practice. Now nine in ten companies in the S&P 500 index produce sustainability reports. Clean energy has never been cheaper, and carbon prices never higher. As the world prepares for the make-or-break UN COP26 climate negotiations in November the market has market is providing a positive tailwind.
Regulators are aligning too. Mandatory TCFD reporting is becoming normalised within financial sectors and the EU’s ambitious Action Plan on sustainable finance has advanced. In 2020 this work started to bear fruit as implementation of two key areas – the EU Taxonomy Regulation and the Sustainable Finance Disclosure Regulation (SFDR) – became tangible.
2) Staying ahead of the curve in the changing sustainable investment landscape
At Kempen we have spent years refining our responsible and sustainable investment philosophy and processes to help our clients preserve and grow assets that yield a real economic return alongside a positive societal and environmental impact.
To help us stay ahead of the curve in 2020, we published our new Climate Change Policy, which made us one of the first asset managers to commit to net zero emissions by 2050. Our policy brings together climate-friendly policies in areas from green bonds to coal exemptions and active ownership and sets out short and medium term goals to align our portfolios with the Paris Agreement goals, Dutch Climate Agreement (Klimaatakkoord), and the EU’s net zero ambitions.
We also deepened our approach across all four investment pillars – integration, exclusion, active ownership and positive impact.
3) Responsible stewardship to uphold ESG standards across portfolios
In 2020 we reached 104 engagement milestones across 82 engagements. Through our engagements, we seek to encourage positive change at companies.
The vivid case studies in our report show how we engaged with firms such as Coats Group, the world’s leading industrial thread manufacturer, to protect its headcount in the wake of COVID-19. The engagement helping ensure the company did not lay off any employees because of the pandemic.
Read more
As an integrated wealth manager we are in a unique position to create sustainable value for all of our stakeholders. We believe that our work in 2020 demonstrates this and during the following months we will be focused on defining new company-wide sustainability KPIs and building capacity for ESG issues.
Visit the interactive microsite here. We hope you enjoy exploring it!