DPAM Invest B Equities Sustainable Food Trends - Eurosif
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DPAM Invest B Equities Sustainable Food Trends
EUROSIF SRI Transparency Code
Expertise in Sustainable Food Trends – November 2021
Statement of commitment
Sustainable and Responsible Investment is an essential part of the strategic positioning and behaviour of
Degroof Petercam Asset Management (DPAM). We have been involved in SRI since 2001 and welcome the
European SRI Transparency Code.
This is our sixth statement of commitment and covers the period from October 2021 to October 2022. Our
full response to the European SRI Transparency Code can be assessed below.
Compliance with the Transparency Code
DPAM is committed to transparency and we believe that we are as transparent as possible given the
regulatory and competitive environments that exist in the countries in which we operate. DPAM meets the
full recommendations of the European SRI Transparency Code.
October 2021
DPAM offers specialised ESG-SRI funds that select the companies or countries which optimally address global ESG-SRI
challenges.
The 19 sustainable strategies cover the major asset classes, following the motto of DPAML namely “active, sustainable
and research driven”.
The asset classes that are covered are Eurozone, European and international equities – including listed real estate -,
with or without a thematic approach, global convertible bonds and euro-denominated investment grade corporate
bonds and government bonds (both OECD and emerging countries) in local and hard currencies.
The sustainability process at the heart of our strategies reflects our commitment to sustainable and responsible
investments, i.e.:
1. To defend the fundamental rights pertaining to the respect for human rights, labour rights, anti-corruption
and environmental protection;
2. To assess the seriousness of controversies that issuers may face; to divest or avoid financing companies that
may be active in controversial activities and/or are seriously and / or repeatedly involved in controversies,
notably when they may affect corporate reputation, long term growth and investments;
3. To promote best practices and encourage on-going efforts towards sustainability by promoting transparency
and bringing sustainable solutions to ESG challenges.
The companies are therefore identified across a systematic process:
• Normative ESG screening: Companies that are not compliant with the Global Standards1 are excluded,
• Controversial approach and exclusions: companies active in armaments, tobacco, gambling, adult
entertainment / pornography, thermal coal mining, unconventional oil & gas and operations in the arctic
region, carbon intensive power generation (including from coal power plants) and nuclear energy are not
eligible for investments (all details in publicly disclosed DPAM Controversial Activities Policy). Assessment of
the controversial behaviour: exclusions of the most controversial companies (controversy level 5 (scale from
1 to 5 being the worst) and possibly controversy level 4 and level 3 with negative outlook as reviewed by our
Responsible Investment Steering Group.
• Preliminary quantitative screening (when relevant) to avoid the tail risks by excluding the
companies/countries with the lowest ESG profiles and to encourage not only the ESG leaders but also the
companies/countries that are committed to improve their ESG profiles
• The ESG screening process is complemented with a proprietary qualitative ESG approach.
1The Global Standards refer to the UN Global Compact, ILO instruments, OECD Multinational Enterprises (MNE)
Guidelines, UNGPs and Underlying Conventions and Treaties
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The Responsible Investment Steering Group (RISG) has complete discretion over the seriousness of the controversy in
all circumstances and may therefore, on the basis of an in-depth analysis, make a different decision on the level of
controversy of a company.
DPAM is committed to sustainable investing and therefore adopts a view on corporate responsibility that is consistent
with international standards and conventions.
The sustainable and responsible investments at DPAM are governed by 4 key main governance policies and 4 steering
and advisory groups.
The set of sustainable and responsible investments related policies are namely:
The Sustainable and Responsible Investments Policy (available here), which describes and explains DPAM’s choices
regarding sustainable and responsible investments. It lists the diverse commitments of DPAM as a sustainable actor.
It explains what DPAM stands for when it refers to Active, Sustainable and Research as its strategic pillars. It describes
DPAM’s philosophy and approaches compared to the various existing approaches regarding sustainable and
responsible investments that are enriching but at the same time possibly generate confusion and complexity. DPAM’s
approach is threefold: ESG integration with or without promoting E&S characteristics and ESG impact by sustainable
objectives. Finally because any investment has an impact, we share our vision regarding impact intentionality and
measurement.
The Controversial Activities Policy (available here): whenever there is any doubt about a company’s involvement – be
it already invested in portfolio’s or considered as a potential investment for portfolio’s – in the controversial activities
as listed in its policy DPAM will have an engaged dialogue with the company’s management. Involvement in a
controversial activity can be indirect, such as potential interaction with defense and armament sector for IT and
technology companies developing security software.
The Proxy Voting Policy (available here): the voting policy adopted by DPAM aims to defend the values and principles
with regard to corporate governance that DPAM advocates and wishes to see applied by the companies in which
DPAM invests, on behalf of DPAM Funds or clients in scope of this Proxy Voting Policy.
The Engagement Policy (available here): DPAM’s vision of being a responsible investor is articulated into three pillars:
• raising key questions about the consequences of its activities;
• being a shareholder which engages in a constructive dialogue with companies and ensuring the rights of
shareholders are fully exercised; and
• being committed to long-term objectives and sustainable financing.
To implement this, DPAM has set dialogue with the different stakeholders at the heart of the process and approach.
This Policy describes the rationale for engaging with companies, expectations and the different channels DPAM uses
from formal dialogue through collaborative or individual engagements to more informal engaged dialogue during the
numerous meetings with the management of companies organized by the research and investment teams.
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Expertise in Sustainable Food Trends – November 2021
To manage DPAM’s RI processes efficiently, DPAM has created four entities dedicated to sustainability and ESG
matters.
The Responsible Investment Steering Group
The Responsible Investment Steering Group (RISG) oversees the implementation of DPAM’s mission statement with
regard to Responsible Investment. The RISG is both the pioneer and the guardian of the coherence, consistency and
credibility of DPAM’s investment processes in light of our strategic commitment toward Responsible Investing.
The RISG meets every month. All decisions are taken by consensus. When a consensus cannot be reached, members
are invited to vote and the decision is taken by simple majority, provided that 50% of the members are present. Only
the members of the RISG have voting rights. The chairman of the RISG is the CEO of DPAM.
The Voting Advisory Board
DPAM’s Voting Advisory Board consist of a mix of internal professionals and external experts to optimize the balance
between investment knowledge and external expertise on specific issues like environment, politics and governance.
External experts help us to fine-tune our methodologies and sustain the alignment with international best practices.
The Advisory Board is responsible for the strategic framework of responsible ownership applied to all DPAM Funds
and discretionary portfolio management mandates whose clients have expressly delegated the exercise of their voting
rights to DPAM. It guards and actively seeks a coherent and credible implementation of the said Voting Policy.
The TCFD Steering Group
The TCFD Steering Committee has an advisory and operational/executive role concerning the implementation of the
TCFD recommendations in DPAM’s overall investment activities. It is chaired by our CEO and consists of several Board
members next to the CIOs equities and fixed income, the heads of research equities and fixed income and the Risk
Officer.
During regular meetings, fed by the expertise and experience of all our portfolio managers, analysts and the RICC, the
committee is in charge of reviewing, updating and strengthening DPAM climate change strategy and risk management.
The Fixed Income Sustainability Advisory Board
The FISAB plays a key role in defining DPAM’s proprietary country sustainability model by assessing the relevancy of
the model, studying potential screening criteria and approving the countries ranking. The FISAB is composed of 6
members, 4 external sustainable specialists/experts and 2 DPAM investment professionals
If specific topical issues emerge in the Responsible Investment Steering group, DPAM might also engage with external
experts outside of the formal committees.
Finally, the day to day management of ESG is orchestrated by the Responsible Investment Competence Center, the
RICC.
The Responsible Investment Competence Center
The Responsible Investment Competence Center (RICC) manages our sustainable activities daily. The RI Competence
Center, headed by our Responsible Investment Strategist Ophélie Mortier and supported by four additional full-time
ESG specialists, is in charge of coordinating all initiatives, methodologies and projects related to ESG. Our RI Strategist
reports directly to DPAM’s Management Board and CEO.
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Being a sustainable investor goes beyond offering sustainable products; it is a global commitment at company level
which needs to be defined in a coherent approach.
As a sustainable actor, DPAM is committed to the major organizations which share the common aim of promoting
long-term sustainable investments. By adhering to UN six Principles for Responsible Investments (PRI) in 2011, DPAM
commits to adopting and implementing these core guiding principles for sustainable finance. By supporting key
initiatives, notably Climate Action 100+, the TCFD recommendations, CDP, FAIRR or the Finance for Biodiversity Pledge,
DPAM shows its acknowledgment to the international policy agenda’s for a sustainable and inclusive growth.
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Article 1. List of funds covered by the Code
Name of the fund: DPAM Invest B Equities Sustainable Food Trends
Dominant/preferred SRI strategy:
Norms-based screening leading to exclusions
Best in class investment
Sustainability themes and impact
Asset Class: Actively managed, international shares
Exclusions standards and norms:
Controversial weapons
Alcohol
Tobacco
Arms
Nuclear power
Human rights
Labour rights
Gambling
Pornography
□ Animal Testing
□ Conflict Minerals
□ Biodiversity
□ Deforestation
CO2 intensive (including coal)
□ Genetic engineering
□ Other (please specify)
Global Compact
OECD Guidelines for MNCs
AUM 30/09/2021 total gross AUM € 47.8 bn.
Links to relevant documents
• Prospectus, annual reports, fund factsheet, KIID: https://funds.degroofpetercam.com/
• Dedicated SRI webpages: https://funds.degroofpetercam.com/responsible-investment.html
• Voting policy: https://res.cloudinary.com/degroof-petercam-asset-
management/image/upload/v1614006838/DPAM_policy_voting.pdf
• Controversial activities policy: https://res.cloudinary.com/degroof-petercam-asset-
management/image/upload/v1614006839/DPAM_policy_Controversial_activities.pdf
• Engagement policy: https://res.cloudinary.com/degroof-petercam-asset-
management/image/upload/v1614006835/DPAM_policy_engagement.pdf
Sustainable and Responsible Investments Policy : https://res.cloudinary.com/degroof-petercam-asset-
management/image/upload/v1614006836/DPAM_policy_Sustainable_and_Responsible_Investment.pdf
• TCFD report: https://res.cloudinary.com/degroof-petercam-asset-
management/image/upload/v1614006838/DPAM_report_TCFD.pdf
• Detailed fund holdings and other documents available to investors: https://funds.degroofpetercam.com/
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Article 2. General information about the fund management company
2.1 Provide the name of the fund management company managing the fund(s) to which this code applies.
Degroof Petercam Asset Management SA/NV
18, Rue Guimard - 1040 - Brussels - Belgium
TVA BE 0886 223 276 - RPM Brussels
2.2 What are the company’s track record and principles when it comes to integrating SRI into its processes?
The new management company resulting from the merger of Degroof Fund Management Company and Petercam
Institutional Asset Management, DPAM, reiterated the commitment made in 2011 by signing the United Nations-
sponsored Principles for Responsible Investment (UN PRI) to encourage the integration of environmental, social and
governance (ESG) factors into the investment decision-making process. Signing these principles commits the Company
to adopting and implementing the six UNPRI guiding principles. This publicly demonstrates its commitment at the
highest level to consistently integrate ESG factors as an actively sustainable asset management firm, and to contribute
to the development of a more long-term investment approach with a more sustainable focus.
• Degroof Petercam Asset Management launched its first sustainable European balanced strategy in 2001 at
the request of an institutional investor. At that time, Degroof Petercam Asset Management decided to rely
on independent extra financial research. In 2007, Degroof Petercam Asset Management received a request
from another institutional investor for a portfolio invested in euro sovereign bonds. Given the limited
availability of extra financial information regarding countries, Degroof Petercam Asset Management set up
an Advisory Board (the current FISAB) to develop an in-house ESG screening covering all OECD Member
States. This has led several research teams to consider ESG factors throughout their investment processes.
• Degroof Petercam Asset Management signed the United Nations Principles for Responsible Investment
(UNPRI) in September 2011. For the last 4 consecutive years, DPAM has been granted the top rating A+ from
the assessment reports of PRI.
• In August 2012, Degroof Petercam Asset Management appointed a fully dedicated Responsible Investment
Strategist to further implement the six principles of the PRI and to strengthen the company’s efforts to fully
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transition towards an ESG-aware fund management company. Since then, the Responsible Investment
Competence Center counts 4 additional SRI Specialists and reports to DPAM Management Board.
• The commitment of Degroof Petercam Asset Management goes further than its domestic market. DPAM’s
membership in several national sustainable investment forums (SIFs) promoting responsible finance
illustrates the group’s strategic commitment in the field of responsible finance. By being part of collaborative
and dynamic global networks, DPAM gains access to a better understanding and knowledge of risks and
opportunities related to responsible investments.
• Next to signing the United Nations Principles for Responsible Investment in 2011, it should also be noted that
our sustainable funds received quite some external acknowledgement. Our sustainable strategies have
received the Towards Sustainability label from Febelfin, which can be considered one of the most stringent
and ambitious labels in Europe. Moreover, our sustainable strategies are also in line with another European
label, the Luxflag label. Next to being in accordance with multiple labels, our approach towards sustainability
yearly receives numerous awards.
Principles
The integration of ESG factors, ingrained in DPAM’s DNA is based on the principles of pragmatism and dialogue.
The analysis of ESG factors is part of the process applied to identify the optimized investments that are most
appropriate to reach the funds’ and clients’ objectives and guidelines.
Please refer to our Sustainable and Responsible Investments Policy from p. 25 for the full description of these 7
principles of our ESG factors integration.
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In short, DPAM’s approach aims to be pro-active, dynamic and supportive of ESG best practices with limited exclusion
of economic sectors and while dialoguing with companies and organizations. To be constructive, dialogue must take
place with an open and critical mind-set aimed at a real exchange of ideas focused on making tangible progress
towards more sustainable corporate practices.
This is why the DPAM process follows logic of best effort, with a goal to process gradually and continuously towards
enhancement and refinement. The Sustainable & Responsible Investment Policy aims to be pragmatic, rational and
consistent with our business and strategic development while still remaining ambitious and state of the art. It is
developed in an evolving and continually improving framework, exactly like ESG.
2.3 How does the company formalise its sustainable investment process?
DPAM has a threefold commitment to sustainable investing:
1. To uphold fundamental rights as per the Global Standards. Companies are assessed on the basis of the 10
Principles of the UN Global Compact, which are grouped into four major principles: human rights, labor rights,
environment and anti-corruption efforts. Drawing on specialized and independent research, a company will
be categorized as compliant, non-compliant or will be put on a watch list. Next to the principles of notably
the UN Global compact, we aim to integrate these values into our sustainability models on government bonds
and we further underwrite the importance of democratic values by refraining to invest in authoritarian
countries. A proprietary country model has been created by DPAM, which also enables the implementation
of the other commitments for our fund investing in government bonds.
2. To avoid controversial activities that may affect reputation, long term growth and investments. In the
context of sustainable finance, the key stake here is to define the position of DPAM on each of these
controversial activities, and to eventually decide whether to fully divest from the companies involved in
controversial activities, or to only recommend a reduction of the portfolios exposure. When deciding whether
to exclude or not a controversial activity from its portfolios or making an investment recommendation, DPAM
follows an approach based on dialogue, in-depth expertise and consistency. DPAM sees exclusion as a last
recourse. Our group’s approach is to advocate best sustainability practices within each economic sector.
Please consult our controversial activity policy for detailed information
3. To be a responsible stakeholder and to foster best practices and evolutions. This means that we are
convinced that sustainability considerations should be integrated in investment research by assessing
relevant sustainability indicators and by avoiding those companies that are lagging behind and that aren’t
making any progress with regard to ESG criteria. Beyond implementing these values in our research, we are
committed to be transparent about our processes and outcomes before our stakeholders and to continuously
engage in dialogue with companies, experts and peers so that to promote best practices and to continuously
improve our ESG performance. As part of collaborative and dynamic global networks we gain a better
understanding and knowledge of the challenges and opportunities associated with responsible investing.
DPAM’s vision of being a responsible investor is articulated into three pillars:
a) Raising key questions about the consequence of our activities;
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b) Being a shareholder who engages in a constructive dialogue with companies and ensuring the rights of
shareholders are fully exercised
c) Being committed to long-term objectives and sustainable financing
ESG analysis is an inherent part of the investment process. It is a crucial element in selecting the stocks that are part
of our sustainable portfolios.
For more information about our investment process, please consult DPAM’s general webpage on our Sustainable &
Responsible Investment approach:
https://www.degroofpetercam.com/en/social-impact/social-responsible-investments/responsible-solutions
Fund specific information can be found on DPAM’s dedicated website:
https://funds.degroofpetercam.com/funds.html
All this information is publicly available.
2.4 How are ESG risks and opportunities – including those linked to climate change – understood/taken into account
by company?
It is DPAM’s conviction that today’s global challenges can be tomorrow’s opportunities. DPAM is capitalising on its
more than twenty years of experience and expertise to actively integrate global ESG challenges into its investment
approach, in a rigorous and disciplined manner, and to the benefit of our clients.
DPAM is convinced of the risk/return optimization of ESG factors integration. It sees in sustainability challenges a risk
as well as an opportunity. The ESG factors are used to assess sustainability risks and opportunities of investment
decisions.
DPAM is committed to offer solutions aligned with the 2030-2050 Program for a sustainable and inclusive growth
and to put its portfolio management expertise to serve the key ESG priorities.
With this objective, it is important to define material ESG factors, priorities and targets. As an actively sustainable
asset manager, DPAM is well aware of the multiple challenges faced by our planet, such as climate change, resource
scarcity, the loss of biodiversity and the mismanagement of water supply, to name but a few. At DPAM, we are
convinced that we can have a positive contribution to the society as a whole when we invest in companies and states
that take such ESG challenges into account. It is our vision that each investment decision has an impact, and that each
ESG effort contributes to a superior well-being on the long-run for the society as a whole.
By identifying risks related to ESG challenges we can get a better understanding of the broader risks involved in an
investment, and this makes our fund management strategies more proactive. By integrating ESG factors into our
investment processes, we identify investment opportunities and generate added value for all stakeholders.
In this regard, our investment decisions are not only based on reliable internal and external sources of information,
but also on the extensive knowledge of renowned and independent experts whom we invite and consult regularly
notably as part of our Responsible Investment Corner.
The objective of ESG integrated research is to map all the risks and opportunities of an investment. This is not to be a
filter reducing investment opportunities but rather to focus on the best sustainable opportunities, which is the
objective of the financial analysis.
Everyone tends to agree that the current economic, social, environmental and governance models are no longer
sustainable on the long term. The technological disruptions, the new paradigm in corporate governance models, etc.
are changing our ecosystems which require adaptations from companies as well as states.
Sustainability therefore refers to three dimensions: the financial sustainability of the issuer, the sustainability of the
social license to operate for the issuer and finally the sustainability of the business models.
The way the sustainability risks are integrated in the investment decision making process can differ according to the
asset classes.
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A sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause a
negative material impact on the value of the investment, as specified in sectoral legislation, in particular in Directives
2009/65/EC, 2009/138/EC, 2011/61/EU, 2013/36/EU, 2014/65/EU, (EU) 2016/97, (EU) 2016/2341, or delegated acts
and regulatory technical standards adopted pursuant to them.
These are closely interconnected with the ESG factors DPAM has defined and are integrated as explained in our
Sustainable and Responsible Investments policy (p. 22-26).
Specifically, to environment and climate change, as supporter of TCFD recommendations, DPAM focuses on physical
and transition risks i.e.:
• Transition risks, which find their origin in the (required) shift towards a low-carbon economy, are mainly
policy-based and are more severe for companies operating in carbon-intensive sectors. The transition risks
result from the ambition to limit global warming and prevent the occurrence of severe negative climate
change patterns, which can have a devastating effect on the economy (policy and legal, technology, market
and reputational risks)
• Physical risks, related to the physical impacts of climate change such as flooding or lack of resources. The
acute physical risks result from changing weather patterns, are event-driven and impact the physical assets
of a company (flooding, wild-fires or hurricanes). The chronic physical risks result from changing climate
patterns and are longer-term shifts such as sea-level rise or severe reoccurring and irreversible periods of
droughts, resulting in water scarcity or reduced crop yields.
DPAM has defined as a priority the assessment to the alignment with a below 2° scenario of the portfolios it is
managing. Based on this, DPAM’s TCFD Steering Group will develop possible actions for the portfolios or investees
which fail the exercise. Actions will include, but are not limited to, engagement with the companies which are falling
behind this transition, with a focus on scope 3 emissions (aligned with DPAM’s environmental engagement priority).
As a forward-looking indicator, it helps to assess the materiality of environmental risk at portfolio management level.
• Responsible Investment at DPAM takes place at group level and follows a team-based and consensus-based
approach. The ESG risks and opportunities are identified as top-down views to be integrated in asset
allocation mainly through sector or sub-theme allocation.
• Furthermore, thanks to internal and external data and the in-depth analysis of fundamental research, those
risks and opportunities are integrated via a bottom up approach by investing preferably in the companies
which are anticipating these risks and opportunities and that consequently constitute sustainable franchises.
In practice, this bottom-up approach takes the form of a stock-picking that closely integrate ESG aspects with
conventional financial considerations. Portfolio managers are supported by DPAM’s Responsible Investment
Competence Centre (RICC), which is a team dedicated to SRI expertise within our group. Besides, our teams
of fundamental analysts are increasingly integrating ESG aspects into the research and recommendations
they submit to our portfolio managers. The RICC is also providing support to the fundamental analysts,
helping them to continuously increase their ESG expertise.
2.5 How many employees are directly involved in the company’s sustainable investment activity?
All DPAM strategies benefit from in-depth research at multiple levels, with support from a variety of experts such as
Responsible Investment (RI) specialists that constantly interact with portfolio managers.
The governance bodies are listed above i.e. FISAB, Voting Advisory Board, RISG and TCFD Steering Group.
Next to those, the Responsible Investment Competence Center (RICC), guides initiatives, methodologies and projects
related to the ESG aspects of the investment processes.
Committed to the first principle of UN PRI, DPAM integrates responsible investment indicators in buy-side investment
research- regardless of the sustainability mandate of the investment portfolios The RI expertise revolves around the
RICC, which includes specialists working in each of the investment competences: Fixed Income Fund Management,
Credit Research, Equity Management and Equity Buy-side Research.
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DPAM employs a team of 10 credit and 21 equity analysts with experience across sectors. By combining the sector
expertise of its analysts with the ESG-analysis from the RICC, DPAM is able to identify the key sustainability drivers for
each sector, and to assess companies ESG performance accordingly.
The portfolio managers are also involved in all the reflections on the topic.
2.6 Is the company involved in any RI initiatives?
DPAM is member of several international forums that advocate sustainable investments. In order to demonstrate our
commitment towards long‐term sustainable financial management, DPAM is a signatory to various organizations.
Next to our commitment to the UN PRI, we are active members of national forums for responsible investments,
namely France (FIR), Spain (Spainsif), Italy (Finanza Sostenibile), German‐speaking countries (FNG) and Sustainable
Finance Geneva (SFG). DPAM Luxembourg’s country Head is a member of ALFI (Association of the Luxembourg Fund
Industry). He is also a member of the LuxFLAG (Luxembourg Finance Labelling Agency).
DPAM is also supporter of the TCFD since 2018, committing to implement its recommendations in its investment &
research processes as well as at the top management level. In 2017, the United Nations adopted the
recommendations of the Financial Stability Board's Task Force on Climate Related Financial Disclosures (commonly
referred to as the "TCFD Recommendations"), mainly on environmental and climate change issues. The latter are a
pragmatic and recognized instrument for the implementation of the fiduciary duty of any investor to take ESG factors
into account in its management. Related to this, we also joined the collaborative engagement initiative Climate Action
100+ in 2019. Climate Action 100+ is a five-year old initiative led by investors to engage with systemically important
greenhouse gas emitters and other companies across the global economy that have significant opportunities to drive
the clean energy transition and help achieve the goals of the Paris Agreement. Investors are calling on companies (i.e.
list of 100 largest emitters, increased by 61 additional companies) to improve governance on climate change, curb
emissions and strengthen climate-related financial disclosures (http://www.climateaction100.org/). The initiative has
been developed to build on the commitments laid out in the 2014/2015 Global Investor Statement on Climate Change,
supported by 409 investors representing more than US $24 trillion.
Also in 2019, DPAM joined the FAIRR network. FAIRR Investor coalition focusing on ESG risks linked to protein supply
chains, specifically in the livestock and aquaculture sectors. Its aim is to raise awareness of the material ESG risks and
opportunities caused by intensive animal production and help investors to exercise their influence as responsible
stewards of capital to engage and safeguard the long-term value of their investment portfolios.
The Corporate Accounting initiative is proposed by Boston Common Asset Management, Mercy Investment Services,
NEI Investments and Robeco. Its goal is to encourage ICT companies (Internet & Mobile Ecosystems Companies +
Telecommunications companies), to:
Recognize the rights to Privacy and Freedom of expression on the internet;
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Recognize that privacy & freedom of expression are human rights;
Align their policies and practices with the Ranking Digital Rights (RDR) Corporate Accountability Index. {The RDR
index evaluates ICT companies on disclosed commitments, policies, and practices affecting the right to freedom
of expression and privacy, based on standards laid out by the UNGPs and the Global Network Initiative (GNI)
Principles on Freedom of Expression and Privacy in ICT. The Index provides ICT companies with a roadmap on
how to respect digital rights. The RDR Index helps companies making a responsible use of content and personal
data}.
Conduct human rights due diligence of their operations that includes digital rights issues and publish a report;
And collaborate with stakeholders to find solutions to digital rights challenges.
By becoming signatory, we have committed to:
Use the RDR Index data to assist in investment analysis, corporate engagement & Human Rights Due-Diligence;
Support the development of the RDR index through providing input into the evolution of the RDR Index and
giving feedback annually;
Urge ICT companies to make clear public commitments to respect users’ freedom of expression and right to
privacy, and to disclose their policies;
And raise awareness within the investor community on digital risks
The Cobalt initiative is the PRI-supported engagement regarding responsible cobalt sourcing practices in line with the
OECD Due Diligence Guidance. As a reminder, the OECD Due Diligence Guidance mainly comes down to three pillars:
Have a clear responsible sourcing policy in place that specifically includes cobalt (not only the classic conflict
materials) – senior oversight, accountability mechanisms and systems to measure the effectiveness of the policy
along with an explicit timeline for implementation.
Identify smelters or refiners in the supply chain and assess whether they conduct due diligence in compliance
with international standards – should this not be the case, downstream companies must use leverage to
pressure suppliers into taking the necessary steps.
Has the company mapped its supply chain at least down to the smelter level and ideally down to mine level?
Has the company identified the cobalt smelters in its supply chain and does it disclose this list?
Does the company know what proportion of its indirect cobalt supply is (a) of DRC origin and (b) artisanal
sourced from the DRC?
Where does this info come from? Any verification?
Report at least annually on targets and progress in reaching them as well as reporting on both the
socioeconomic (and expected) outcomes of actions by the company.
Since 2020 DPAM is signatory of CDP (formerly Carbon Disclosure Project) in which we collaboratively engage with
issuers on climate, water and forest disclosure through the annual CDP Non-disclosure Campaign as well as science-
based target setting through the annual Science-Based Target Setting Campaign.
The same year, DPAM joined the Investor Alliance for Human Rights, a collective action platform for responsible
investment that is grounded in respect for people's fundamental rights. The initiative focuses on the investor
responsibility to respect human rights, corporate engagements that drive responsible business conduct, and standard-
setting activities that push for robust business and human rights policies.
At the end of 2020, DPAM decided to sign the Finance for Biodiversity Pledge. In total 37 financial institutions with
€4.8 trillion assets under management committed to make a positive contribution to biodiversity with their finance
activities and investments and call upon world leaders to agree on effective measures to reverse nature loss in this
decade. The pledge includes calling on global leaders and committing to protect and restore biodiversity through their
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finance activities and investments in the run-up to the Conference of the Parties (COP 15) to the Convention on
Biological Diversity (CBD) in 2021. The Finance for Biodiversity Pledge was launched during the Nature for Life Hub at
25 September 2020 and the Biodiversity Summit of the United Nations General Assembly at 30 September 2020.
Future actions include collaboration and knowledge sharing, engagement with investees, impact assessments, target
setting and public reporting. More information can be found through following link.
Related to fundamental rights, DPAM signed as well the “Investor Statement on Facial recognition and human rights”
in 2021. The objective is to engage with companies based on the UN Guiding Principles on human rights to challenge
the accuracy of their technology, sources of the image databases and monitoring to avoid biases; due diligence
mechanisms of clients prior to divulging the technology and set up of grievance mechanisms.
2.7 What is the total number of SRI assets under the company’s management?
The total assets under management in labelised sustainable investments amounted to € 17.7 bn at the end of
September 2021.
Degroof Petercam Asset Management currently manages nineteen specific SRI funds:
• DPAM INVEST B Equities Europe Sustainable : selecting the equities from European companies which put ESG
challenges at the heart of their economic development
• DPAM INVEST B Equities World Sustainable : selecting the equities from Worldwide companies which put ESG
challenges at the heart of their economic development;
• DPAM INVEST B Equities Euroland Sustainable: selecting the equities from the Eurozone from companies
which put ESG challenges at the heart of their economic development.
• DPAM INVEST B Equities Sustainable Food Trends: selecting agricultural companies across the value chain
which aim for sustainable agriculture and which provide solutions to the food challenge
• DPAM INVEST B Equities NewGems Sustainable equity expertise: selecting companies which are the winners
of tomorrow in themes such as nanotechnology, e-commerce and cyber security;
• DPAM INVEST B Equities Dragons Sustainable equity expertise: selecting companies with are the winners of
tomorrow in disruptive sectors from the Asian universe.
• DPAM Capital B Real Estate EMU Dividend Sustainable: The strategy invests in Real-Estate companies with
good environmental, social and governance (ESG) profiles. The strategy intends to generate ‘double alpha’
combining positive contributions from the sustainable process with outperformance from the financial
management of securities.
• DPAM Capital B Real Estate EMU Sustainable: The strategy invests in Real-Estate companies with good
environmental, social and governance (ESG) profiles. The strategy intends to generate ‘double alpha’
combining positive contributions from the sustainable process with outperformance from the financial
management of securities.
• DPAM Invest B Equities Europe Small Caps Sustainable: DPAM Invest B Equities Europe Small Caps Sustainable
invests in small caps companies with good environmental, social and governance (ESG) profiles. The strategy
intends to generate ‘double alpha’ combining positive contributions from the sustainable process with
outperformance from the financial management of securities.
• DPAM Invest B Real Estate Europe Dividend Sustainable: The strategy invests in Real-Estate companies with
good environmental, social and governance (ESG) profiles. The strategy intends to generate ‘double alpha’
combining positive contributions from the sustainable process with outperformance from the financial
management of securities.
• DPAM Invest B Real Estate Europe Sustainable: The strategy invests in Real-Estate companies with good
environmental, social and governance (ESG) profiles. The strategy intends to generate ‘double alpha’
combining positive contributions from the sustainable process with outperformance from the financial
management of securities.
• DPAM L Bonds EUR Quality Sustainable: selecting the IG corporate bonds from worldwide companies which
put ESG challenges at the heart of their economic development;
• DPAM L Bonds Government Sustainable: selecting the states which care about their sustainable development
by upholding democratic values and individual liberties, investing in education and innovation and by meeting
equally the needs of the present population without compromising the ability of future generations to meet
their own needs;
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• DPAM L Bonds Emerging Markets Sustainable: capitalising on the growth of emerging markets but not at any
price by selecting the states which care about their sustainable development, particularly which uphold
democratic values and individual liberties;
• DPAM L Bonds Climate Trends Sustainable: investing in corporate and public debt with the aim to channel
investments towards climate-conscious issuers that establish sound sustainability performance to give
investors a solution to maximize their climate impact while taking into account the relevant sustainability-
related risks and opportunities.
• DPAM L Balanced Conservative Sustainable: selecting the companies and the states which put ESG challenges
at the heart of their economic development while ensuring a healthy and balanced diversification in terms of
asset classes, geographical allocation and risk correlations;
• DPAM EQUITIES L EMU SRI MSCI INDEX: investing in EMU equities in keeping with the guidelines of the MSCI
SRI EMU index ;
• DPAM EQUITIES L US SRI MSCI INDEX: investing in US equities in keeping with the guidelines of the MSCI SRI
US index;
• DPAM EQUITIES L WORLD SRI MSCI INDEX: investing in global equities in keeping with the guidelines of the
MSCI SRI World index.
All information about the sub-funds can be found on https://funds.degroofpetercam.com/
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Article 3: General information about the SRI fund that comes under the
scope of the Code
3.1 What is (are) the fund(s) aiming to achieve by integrating ESG factors?
The DPAM Invest B Equities Sustainable Food Trends strategy for worldwide equities meets our threefold
commitment:
1. To uphold fundamental rights as defined in the United Nations Global Compact
2. To avoid controversial activities that may affect reputation, long term growth and investments
3. To be a responsible shareholder and to foster best practices and evolutions
• The Equities Sustainable Food Trends strategy is actively managed and invests worldwide in reasonably priced
high quality companies with exposure to developing economies and good environmental, social and governance
(ESG) scores. The stock selection within the resulting investment universe combines the identification of
sustainable top-down growth themes and deep bottom-up research with an eye for ESG-related value creation.
The resulting high conviction ‘buy and hold’ portfolio holds approximately 35 stocks that are characterized by
strong growth, high profitability and sound business models.
• The fund is an actively managed, pure agricultural and food equity long-only strategy. It keeps a long term view
focussing on the upstream of the value chain. It invests in stocks of companies which are (in)directly involved
along the entire food chain and related factors (excluding commodity futures). The investment process is
characterized by a pragmatic top down approach combined with bottom up stock picking, and a bias towards
under-researched midcaps and emerging countries. By using a proprietary ESG scorecard, we are able to analyse
material factors on a sub-theme basis. Over the long term, we believe these factors play a critical role in driving
value for our investors.
• With global population growth, increasing urbanisation, increased income in developing countries and structural
demand from biofuels, we believe the agricultural industry is poised to benefit from these trends. At the same
time, global warming and other factors have led to an increase of the cost curve of growing crops. Furthermore,
with global water and energy demand set to increase by more than 50% by 2030, these trends signify the
importance of integrating environmental, social and governance factors into the investment process.
• We also recognise the importance of the UN Sustainable Development Goals. With an ambitious 17 goals, we
believe there are a number of goals which are directly relevant to this strategy. For example, SDG 2, which is
focused on ending hunger, achieving food security, improving nutrition and promoting sustainable agriculture.
• The Sustainable Development Goals also present an investment opportunity. Corporations have the potential to
make significant contributions to the SDGs. DPAM believe it makes business sense to invest in solutions which
address the SDGs. As an early investor in the food value chain, DPAM is poised to benefit from the significant
amount of investment that will be undertaken in these companies.
• Achieving the Sustainable Development Goals will not be possible without a strong and sustainable agricultural
sector. We have therefore identified the main goals relevant for each sub-theme within the portfolio and will
continue to monitor how our portfolio companies are playing a role in meeting the targets outlined in the
Sustainable Development Goals.
• The strategy has no assigned benchmark. The Sustainable Food Trends strategy is a thematic fund, in which we
aim to capture investment opportunities across the entire agricultural value chain. For risk and performance
measurement we use the DAX Global Agriculture index.
• With its ESG-SRI Fixed Income and Equities expertise DPAM targets a double alpha: (1) the alpha coming from the
construction of the sustainable eligible universe, in addition to (2) the alpha generated through the investment
process. DPAM maximises the expected return of a portfolio constructed within the sustainable investment
universe. The objective is to offer best-in-class ESG-SRI funds with the purpose of having a similar long-term
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performance as a classic fund. DPAM uses an objective multi-dimensional quantitative approach in its ESG-SRI
selection process.
The full details of the sub-fund can be found on https://funds.degroofpetercam.com/
3.2 What internal or external resources are used for ESG evaluation of the issuers who make up the investment
universe of the fund(s)
On a daily basis, the management of the sustainability integration initiatives is executed by the Responsible Investment
Competence Center (RICC) which consists of four ESG specialists that serve as a knowledge pool for our analysts and
portfolio managers and that will promote and develop our values externally. In terms of ESG analysis, the RI specialists
support our analysts in forming opinions on sustainability profiles of companies, identify new areas of required
research according to developments in the market, and continuously monitor the positions of their assigned
sustainable strategies. The RI specialists further take the lead in the assessment of significant controversies in
continuous cooperation with our research analysts and portfolio managers. For the final eligibility assessment of
controversial companies, we also rely on the votes of our Responsible Investment Steering Group.
In terms of sustainable investment management DPAM distinguishes itself by integrating responsible investment
indicators in all buy-side investment cases, regardless of the sustainability mandate of the final investment fund. DPAM
employs a team of 7 credit and 17 equity analysts with well diversified experience across sectors. By combining the
sector expertise of our analysts with the ESG-analysis from our responsible investment specialists, we are able to
identify the key sustainability drivers for each sector, and to assess companies ESG performance accordingly. Our buy-
side recommendations systematically include at least a general overview of the company’s E, S and G performance.
Eventually, our buy-side recommendations will be supplemented with specific sector- or criteria-related ESG research
and/or engagement initiatives when the ESG information available on the company is insufficient. When our research
teams require more in-depth research on a particular stock or industry, they reach out to our ESG specialist for further
analysis and assistance.
Our external resources include extra-financial, company-specific and industry-wide research from the two leading
extra-financial rating agencies Sustainalytics and MSCI ESG Research. Together, these agencies employ more than 300
experienced ESG analysts. The remuneration of extra-financial information agencies substantially differs from that of
financial rating agencies, in order to avoid any conflict of interest. The independence and objectivity of the provided
information is therefore guaranteed. Nonetheless, the corporate governance of an extra-financial information
company is also part of its selection process. Other elements taken into account in this process are the relevance of
information and the coverage & reactivity towards controversies and market events, for example the lead-time to
cover a security that enters the universe.
Beside MSCI and Sustainalytics, we have access to a large amount of ESG data produced by various international
sources of reference and a wide set of brokers with specialized research on selected ESG-related topics, which helps
us to continuously develop our in-house ESG assessment methodologies. Both our RI specialists and the investment
teams have access to these information sources. Our buy-side analysts can also access a large number of ESG-related
data points on our external analytics platforms in support of their reflections.
Regarding environmental data, we work with Trucost and CDP. These are amongst others used in our ESG reports and
our (systematic) TCFD or climate risk assessments.
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We also have access to thematic ESG research through our participation in the FAIRR initiative, Climate Action 100+
and the PRI collective commitments.
Finally, DPAM regularly teams up with various external experts and engages in dialogue with other key players in the
market. Each quarter, the RI competence centre organizes responsible investment corners in which we invite various
experts to share their knowledge with our employees on a specific topic. We also engage external experts in our voting
advisory board on a permanent basis.
Overview of sources per step of the ESG screening:
Sustainalytics: Global standards compliance, ESG Risk Ratings for best-in-class
screening;
MSCI ESG Research: Global standards compliance, controversial activities involvement,
second opinion for Sustainalytics data
ISS Ethix: controversial activities involvement (controversial weapons)
Trucost and CDP: qualitative screening (environmental data such as carbon emissions
for ESG integration and TCFD assessment)
Glass Lewis: qualitative screening (corporate governance data and analysis)
Specialized brokers (BNP Paribas Exane, Kepler Cheuvreux, Crédit Agricole CIB, Morgan
Stanley, Bernstein, Berenberg,…): qualitiative screening (ESG integration).
Furthermore, DPAM developed several tools to optimize analysis, reporting and risk management.
Eligible universe screening: check/control mechanisms are in place to ensure
compliance of the portfolio with the ESG criteria of the sustainable strategy. As such,
the investable universe is updated each quarter (by the RICC) and a ‘white-list’ is sent
automatically to the investment team and the fund administration, so as to ensure
compliance of the investments with the universe. The four criteria of the screening, in
line with the sustainable strategy, include a norms-based screening, controversies and
exclusions and a quantitative screening (best-in-class). The qualitative ESG assessment
is part of the active stock selection.
For thematic strategies we don’t apply quantitative ESG screenings that are based on
the overall Sustainalytics ESG scores but instead favor the assessment of internally
developed scorecards that are specific to the subtheme of the concerned companies.
Of course, the information derived from the scorecards is also applied by the portfolio
managers for other funds.
Our risk management teams periodically assess the compliance of funds with their
respective eligible universes via their developed screening tools.
Our external data providers enable us to receive pop up alerts whenever ESG ratings
are changed or whenever serious events happen for a pre-defined list of companies.
The members of the RICC as well as the fund managers and buy-side analysts are
subscribed to several daily broker and data provider newsletters concerning ESG topics
(company specific info and sector info). When serious controversies are identified,
internal decisions are made to either hold or sell the position. Examples of newsletters:
o Corporate Governance Today (Kepler Cheuvreux)
o Morning Credit (Crédit Agricole Corporate and Investment Bank)
o ESG and corporate governance news (Sustainalytics)
o Sustainability Spotlight (Morgan Stanley)
Our internal data systems ensure quarterly updates of ESG-related factsheets/reports
for all our investment funds and mandates.
Our proprietary data tools and quant solutions team enable us to efficiently construct
eligible investment universes across asset classes and ESG screening types, and to
assess the performance attributions of each applied step over time.
Our proprietary portfolio analysis tools enable us to screen equity and credit portfolios
on a wide range of ESG-related criteria and to run automated portfolio reports and
dashboards to better understand the underlying drivers and to optimize external client
reporting.
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Our TCFD assessment process allows us to assess climate-related risks and
opportunities on portfolio and individual positions level (systematically done for top 5
emitters of all actively managed portfolios).
Our proxy voting tools/instructions in collaboration with our provider allow us to vote
according to our voting policy on governance, social and environmental issues.
Our monthly review of controversial behavior per sector according to a specified
template, agenda and process (RISG) allows us to monitor controversial behavior and
anticipate in case required.
Our engagement policy and priorities allow us to engage with investees in a structured
way.
Our internal platforms (Bloomberg and Factset) allow us to share research and updates
among each other (portfolio managers, analysts and ESG team). Within Factset we
have a proprietary database storing all internal research, company meetings reports,
engagements, ESG analysis and buy-side analysts company ratings (Strong Buy, Buy or
Not rated).
3.3 What ESG criteria are taken into account by the fund(s)?
For companies, we firstly look at severe controversies linked to human rights, labour rights, environment and anti-
corruption in order to assess compliance with fundamental rights. Next to these criteria we assess E-, S- and G-
performance using research from external ESG research providers, external brokers and collaborative initiatives and
our own analysts.
In order to assess controversial companies and for our thematic strategies, we use our own ESG scorecards based on
criteria defined by our RI specialists in cooperation with our research analysts. Next to our own research, we use the
ESG indicators made available by Sustainalytics and MSCI-ESG to feed our in-house ESG scorecards. Often small cap
companies tend to have a less qualitative coverage by these external rating agencies. Therefore, a strong cooperation
between the sector analysts and the ESG analysts is crucial to unearth the most pressing ESG issues for the company
being analysed.
The ESG criteria used within our investment processes vary from sector to sector in order to accurately take into
account sector specific ESG challenges. For instance, in industries that are more directly related to innovation (such as
food technology and testing) we are using ESG KPI’s that assess the product governance approach of a company, via
metrics such as food safety or nutrition programs, quality certification or audits and recalls). Concerning industries
that are more directly exposed to environmental issues, we have selected several relevant key indicators pertaining
to climate change management such as the mitigation of greenhouse gases emissions, or the reduction of the water
footprint, among other topics. By way of selecting ESG indicators that are relevant to each company we analyse, we
ensure that our ESG scorecards suitably apprehends all dimensions of a company’s ESG performance. This enables us
to identify ESG strengths (i.e. investment opportunities and weaknesses (i.e. ESG risks) for each company.
As an example of ESG scorecard, for the ESG analysis of Robertet the RICC, portfolio manager and fundamental analyst
defined together the following list of ESG issues: supply chain sustainability management, sustainable
operations/production and sustainable products. Based on specifically selected ESG Key-Performance-Indicators,
Robertet has been assessed for each of these issues. The overall profile integrated into the decision matrix that is
eventually used by portfolio managers to determine their investment decisions.
This example is key to illustrate that ESG criteria taken into account is highly dependent on the company and its
surrounding that is being analysed. No two company scorecards can look the same, as each company faces particular
ESG issues and ways to address these.
With respect to corporate governance, key indicators in our analysis include the structure and independency of the
board and the audit committee, the split between the Chairman and CEO role, the existence of controlling
shareholders, the share class structure and the principle of one-share-one-vote, related party transactions, executive
pay and significant minority shareholder votes.
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