KBC increasingly stricter with regard to responsible investing
Europe has made the decision to become climate neutral
by 2050, and to achieve this, new laws and regulations are needed. That has an
impact on both the financial sector and you as an investor.
On 2 September, KBC Asset Management tightened its
approach to responsible investing. A change with impact.
Always setting the bar higher
As early as 1992, KBC launched the very first responsible investing fund on the Belgian market. Since then, KBC Asset Management's policy on responsible investing has evolved along with the needs of society. The starting points are always:
- To find a balance between risk and return
- To implement strict criteria for responsible investing
Responsible investing is carried out on the basis of a negative and positive screening process. Negative screening means that we exclude matters that are unacceptable. Positive screening means that we promote ecological and social characteristics.
However, that's not all. KBC Asset Management recently tightened its positive screening methodology.
The negative screening of our responsible funds is among the strictest on the market. For instance, we are one of the few asset managers to completely exclude fossil fuels.
Johan Fastenakels – Responsible Investing Expert at KBC Asset Management
Measuring is knowing, knowing is acting
Responsible investing funds now have explicit and measurable objectives that are reported, monitored and adjusted. We give each responsible fund an ESG rating.
- For companies, this rating reflects the extent to which they are exposed to sustainability risks relevant to their sector
- For countries, this is the extent to which countries vouch for an effective sustainability policy
We compare that ESG rating with a benchmark, where the aim is for the fund to rate better, continues Johan Fastenakels. We also measure the carbon intensity of companies and countries at the level of the responsible fund.
By 2030, we want to reduce the carbon intensity benchmark for companies in our responsible funds by half compared to that of 2019.
Johan Fastenakels – Responsible Investing Expert at KBC Asset Management
We’re doing this for our children and our grandchildren
Lastly, KBC Asset Management also takes a close look at the extent to which companies and countries are committed to sustainable development. By 'sustainable development' we mean meeting the current needs without jeopardising the needs of future generations.
- For companies, we consider their contribution to the United Nations Sustainable Development Goals
- For countries, we look for relevant bonds to finance green and/or social projects
Our responsible investment solutions aim to invest part of the portfolio's bond component in green and social bonds.
The returns on these bonds are used exclusively to finance green and/or social projects, Johan Fastenakels points out.
This way, the updated methodology is fully in line with the spirit of the law: supporting sustainable transition by promoting ecological and social characteristics.
Johan Fastenakels – Responsible Investing Expert at KBC Asset Management
Want to know more about responsible investing?
The information contained in this publication is for information purposes only and should not be considered as investment advice.
