Exclusion: what does not belong in our portfolios
The companies excluded by Cadelam, the Group's fund manager, are those that have absolutely no place in the portfolios because they do not respect our sustainable values.
For any responsible investor, excluding or selling companies from the portfolio is a drastic but sometimes necessary step. For example, a decision to disinvest is possible if dialogue or voting in the context of engagement does not yield sufficient results or if it appears that the sustainability profile of a company is evolving negatively.
An exclusion policy serves to filter investments and to monitor existing investments.
Our own exclusion list
In the course of 2020, the Bank considerably deepened this aspect of its responsible investment policy. Previously, we relied on third-party exclusion lists. Last year, we internalized part of the analysis process. With the help of Sustainalytics, the ESG research bureau, the analysis that precedes the exclusion of companies became much more concrete. Based on concrete and precise figures, Cadelam excludes four categories of companies:
- The most obvious: companies producing controversial weapons, including cluster munitions and anti-personnel mines. The Financial Services and Markets Authority (FSMA) and the sector federation of fund managers (BEAMA) ensure that banks strictly adhere to these exclusion requirements.
- Companies that produce tobacco or generate more than 5% of their turnover from tobacco sales.
- Companies that violate our environmental, social or good governance (ESG) standards. Among these companies that fail to comply with laws on pollution, working conditions or the proper functioning and independence of the board of directors.
- Companies that violate the principles of the United Nations Global Compact and whose engagement process is not progressing favorably. These basic principles concern people, environment and society. Examples include human rights, labor law or rules of good corporate governance.