We believe in active and responsible investment. As such, we consider the analysis of Environmental, Social and Governance (ESG) issues an essential and integral part of our investment process. Responsible Investment helps us in our pursuit to realise economic growth and meet client expectations while reducing risks and contributing to sustainable capital markets.
Our approach to Responsible Investment
We take an active approach to Responsible Investment using a clear set of principles. These principles comprise three pillars which act as building blocks and account for local differences while reflecting market standards:
- ESG Integration – incorporating ESG factors into the investment decision-making process;
- Active Ownership – addressing sustainability issues by exercising shareholder rights and actively engaging with the issuers we invest in;
- Solutions – providing ESG-focused products, ranging from strategies applying exclusions based on client beliefs to those offering targeted environmental and social impact.
Our investment process integrates ESG analysis into our investment decisions and their underlying research processes. By doing so, we seek to identify financially material ESG factors, which complements the traditional financial and economic factors analyzed as part of the investment process.
Our approach to Active Ownership advocates for positive change, in addition to focusing on reducing ESG risk and promoting best practices. We engage with issuers and exercise our shareholder rights, where possible. The aim is to improve sustainability practices and to reduce long-term investment risk for our clients. Engagement can be based on client policies, risks identified during our research processes or strategic themes. We engage either directly with the issuer or in collaboration with other investors in an effort to maximize influence. We collaborate with a global network of experts, opinion makers, academia and industry bodies to promote responsible standards and to increase positive social impact.
Aegon Asset Management offers a range of dedicated solutions to pursue ESG objectives alongside financial returns. Solutions are categorized into four types:
- Exclusions – Exclusionary strategies use negative screening to avoid certain sectors, companies or practices based on specific criteria. Aegon Asset Management offers exclusionary screening according to client preferences in addition to any legally-required exclusions (such as certain weapons manufacturers in some jurisdictions).
- Best-in-class – Best-in-class strategies seek to mitigate ESG-related risk while preserving sector diversification through the positive selection of issuers on the basis of better or improving ESG profiles relative to their sector peers.
- Sustainability-themed – Sustainability-themed strategies focus on selecting issuers or sectors which contribute to solving sustainability issues while maintaining the primary objective to generate long-term financial returns.
- Impact investments – Impact investment strategies focus on targeted investment themes which we believe are likely to generate positive and measurable social and/or environmental impact alongside a financial return. Similar to financial performance, societal and/or environmental impact of investments is monitored and reported.