Adrie Heinsbroek on the importance of ESG inclusion rather than exclusion
Ahead of the Sustainable Investment Forum Europe 2020 taking place in Paris on the 10 March, we caught up with Adrie Heinsbroek, Principal Responsible Investment at NN Investment Partners,to discuss the importance of ESG inclusion rather than exclusion
Ahead of the Sustainable Investment Forum Europe 2020 taking place in Paris on the 10 March, we caught up with Adrie Heinsbroek, Principal Responsible Investment at NN Investment Partners, to discuss the importance of ESG inclusion rather than exclusion.
Q. How do you define an eligible investment universe?
In our view, defining an eligible investment universe is a combination of value and values – reflecting a long-term focus on value creation in the context of NN IP as an active and responsible investor. This incorporates our view on the world, forces that drive society, markets and our responsibility in this context. In my view, responsible investing and ESG factors are often regarded as separate from the basic principles and premises of investing, while I think they are inextricably linked.
Responsible investing should not be equated to a battle between the subjectivity of norms-based criteria versus the objectivity of market dynamics. Defining an investment universe is all about having the ability to sustain the profitability of the selected investments and in order to do so, you have to have a stance and dare to take a view on trends and topics.
Areas such as tobacco and controversial weapons are clear cut; these are mere hygiene factors. However, topics like resilience and adaptation to the effects of global warming and the need for transition to a more low carbon and transformative economy are more nuanced. How should we go about balancing the steps undertaken in the transition with the expectations to adhere to the Paris agreement? And above all, as investors, are we willing to accept the consequences of the policies that we have put in place?
Are we willing and able to really propose divestment if companies or issuers which do not change their behaviour or activities as a result of our dialogue with them? If so, is there a time to talk and a time to walk ….?
It also demonstrates strength to collaborate on some of these topics with others. A perfect example is the CA 100+ and more specifically, in a Dutch context, the collaborative Platform Living Wage Financials. This group of mainly Dutch investors is not only increasing the outreach to companies but also ensuring that the topic itself is receiving much more attention. It is heightening awareness among market players on the need to establish a living wage in labour intensive sectors like the clothing sector. An example of how a complex system can start to unravel with just one simple question, “Do you pay a living wage?”
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Adrie Heinsbroek will be sharing further insights at the Sustainable Investment Forum Europe 2020, organised in Partnership with UNEP-FI, to an audience of 400 asset owners, ratings agencies, banks, UN and Government policymakers, investors, development banks, think tanks, and NGOs committed to driving forward the sustainable finance agenda. Find out more here about the event here.