Responsible investment policy framework
To demonstrate and disclose our vision and approach on Responsible Investment (RI), NN Group developed the Responsible Investment Framework policy. With seven key principles, we emphasis the measures we take to integrate ESG into our investment process, for the benefit of all our stakeholders.
NN applies different Responsible Investment (RI) strategies, such as norms-based, voting, engagement, ESG integration and, as a measure of last resort, restriction. Our approach is a reflection of our investment beliefs, the organisation’s values, relevant laws, and internationally recognised norms and standards, based on which minimum requirements have been developed for the investment process. More detail on our RI approach can be found in the Responsible Investment Framework Policy.
Voting and Engagement principles
The exercise of voting rights is one of the most effective ways for investors to hold company management accountable. Our Voting Policy for Proprietary Assets guides the voting considerations on behalf of NN Group’s proprietary equity portfolio. This Standard reflects the principle that company management should base their decisions on the long-term interest of the company and its shareholders while acting responsibly to all stakeholders.
NN has delegated the management of the proprietary equity portfolio to Goldman Sachs Asset Management (GSAM), who also exercises our voting rights. GSAM uses an external service provider to support the process of proxy voting whereby all voting decisions are made on a case-by-case basis in accordance with the stipulations of NN’s Voting Standard. In case GSAM cannot vote on behalf of NN because of a conflict of interest or other restriction, it will enable NN to decide upon the votes. For our voting records, please refer to this page.
Apart from exercising voting rights, our asset manager also actively engages with the companies in which we invest. Engagement offers an opportunity to understand the risks and opportunities of each specific investment case, and to use NN’s influence as an investor to encourage companies to improve their ESG practices, thereby ensuring sustainable long-term value that also benefits society as whole. NN Group has developed an Engagement Policy for Proprietary Assets which includes minimum requirements for engagement related to NN’s Proprietary Assets.
As an asset owner we are required to comply with the national laws implementing the revised EU Shareholder Rights Directive. This means that, in addition to our voting and engagement policies, we disclose specific information included in the asset management agreements for the proprietary equity portfolio. This information can be downloaded here.
NN expects the companies it invests in to act in accordance with the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. If we assess companies to severely and systematically violate these standards, an engagement process will be started. We will only decide to restrict individual companies when engagement is not or no longer considered feasible to change the conduct or involvement in specific business activities of those companies. Such a decision will not be taken lightly and only where we believe that restriction is a balanced and proportionate response.
Restrictions may also arise when companies demonstrably have activities in the trade of arms to central governments or non-state actors that are sanctioned by a UN or EU arms embargo. This is also the case for companies that develop, produce, maintain or trade ‘controversial weapons’. Weapons that we define as controversial include anti-personnel landmines, cluster munitions, biological weapons, chemical weapons, depleted uranium ammunitions, and white phosphorus weapons. Also, companies involved in nuclear weapon activities are also restricted under certain conditions. Furthermore, NN applies restrictions to corporate issuers involved in tobacco production, oil sands production and controversial pipelines, or the mining of thermal coal.
Finally, NN does not invest in sovereign issuers against which arms embargoes have been issued by the UN Security Council. On a case-by-case basis, NN may decide to also restrict sovereign issuers on other grounds.
The most recent Exclusion List can be downloaded here.
We use guidelines, such as the UN Global Compact to help us evaluate the corporate behaviour of companies in which we (may) invest. The UN Global Compact is a set of 10 principles for responsible corporate behaviour in four areas: human rights, labour relations, environment, and anti-corruption. For these areas, NN is developing papers, with the objective of providing guidance including to our asset managers on the standards and practices to consider in their investment process and active ownership practices. The first papers are on Human Rights and the Environment.