Sustainable EPSVs (voluntary pension schemes)
Information on sustainability
Summary
Last update: 30/11/2024.
This plan (hereinafter, the “plan”), promotes environmental characteristics, and is classified as an Article 8 of Regulation (EU) 2019/2088 financial product. However, it does not have a sustainable investment objective.
Nevertheless, even though the plan does not have a sustainable investment objective, it intends to make sustainable investments. The plan's sustainable investments set out to further all of the Sustainable Development Goals (SDGs) outlined within the United Nations 2030 Agenda. An investment must make a net positive contribution to the 17 SDGs in order to qualify as a sustainable investment.
Within these investments, any potential damage caused must not be significant and must always be mitigated by the greater positive impact generated, in order to not significantly undermine any environmental or social sustainable investment goal, given that the plan requires all sustainable investments to make a net positive contribution to the sustainable goals being pursued.
Additionally, consideration of the Main Adverse Incidents indicators is taken into account throughout the entire investment process, in order to manage the key indicators for the Do No Significant Harm (DNSH) assessment.
To the extent that sustainable investments are also subject to sustainability analysis through the ESG Rating“” indicator, which incorporates environmental, social and governance criteria compatible with the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions referred to in the ILO Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights, the team analyses the alignment of the investee companies with these principles and guidelines.
By assessing the business practices of the companies in which it invests, the Fund promotes environmental and social characteristics such as carbon efficiency, properly managing how natural resources and water are consumed, limiting the impact on biodiversity and land use, properly managing waste and toxic emissions, limiting the impact of pollution caused by non-recyclable packaging and materials, properly managing human resources in order to keep workplace risks under control and complying with labour rights, appropriately managing relationships with wider society and the company's impact on it in order to, for example, prevent violations of fundamental rights, reducing potential damages caused by a lack of suitable health and safety measures in the products and services offered, suitable protection for keeping customer data private and secure and/or monitoring of these protection systems within its supply chains.
In order to ensure compliance with the environmental or social characteristics promoted by the plan, the initial step in the investment strategy involves applying the Entity's exclusion policy, which rules out companies with high exposure to economic activities which have a significantly negative environmental or social impact, or which violate fundamental human or labour rights. The plan then follows a “best-in-class” investment process.
The management team takes the good governance practices at the companies in which it invests into account, via the indicator used (ASG Rating) for selecting investments. When considering the planned investment ratio for the portfolio, at least 60% of the portfolio's assets is established for investments that promote environmental or social characteristics, and a minimum of 20% of its assets is specified for sustainable investments.
The ESG Rating indicator, which must meet the minimum required value both for each individual asset and at an overall level for the entire portfolio, is used for monitoring the environmental or social characteristics promoted by the plan.
The plan uses methods which have been specifically developed both for measuring both compliance with environmental or social characteristics, where the “ESG rating” indicator is used as a metric, and for assessing the sustainable investments based on their net positive contribution towards the 17 SDGs.
In order to deploy these methods, the Entity uses data from reputable suppliers. However, there may be constraints on the availability and quality of the non-financial information used for assessing the ESG Rating indicator and sustainable investments. The Entity continuously analyses and monitors the results from these assessments in order mitigate these constraints.
The Entity has a due diligence measure targeting the plan's underlying assets, which involves continuously monitoring them and their compliance with the environmental and social characteristics promoted by the plan.
The Entity also has an Engagement Policy which contains processes focussing on actively engaging with issuers“ ”and on voting on potential companies in which to invest.
No specific benchmark index has been identified for establishing the plan's environmental and social characteristics.
No sustainable investment goal
Last update: 30/11/2024.
This financial product promotes environmental or social characteristics, but does not aim at sustainable investment.
However, the plan sets out to make sustainable investments. The plan's sustainable investments set out to further all of the Sustainable Development Goals (SDGs) outlined within the United Nations 2030 Agenda. There are 17 SDGs, including the following: 1) no poverty; 2) end hunger; 3) ensure health and well-being; 4) guarantee education; 5) achieve gender equality, 6) guarantee the availability and sustainable management of water; 7) guarantee access to affordable and sustainable energy; 8) promote economic growth and decent employment; 9) promote industry, innovation and infrastructure; 10) reduce inequalities; 11) achieve inclusive, safe and sustainable cities and communities; 12) guarantee sustainable consumption and production patterns; 13) take measures to combat climate change and its effects; 14) conserve and sustainably use the oceans, seas and marine resources; 15) sustainably manage forests, combat desertification and land degradation; 16) promote justice and peace through institutions and 17) contribute to the Global Partnership for Sustainable Development.
By making this type of sustainable investment, the plan intends to contribute positively to these goals defined in the SDGs. In order to identify these investments, the plan uses an indicator from an external provider, specialised in ESG analysis, with an established methodology for measuring each company's contribution to each of the 17 SDGs based on their operations, products, services, policies and practices for addressing these challenges. Based on the above, each company analysed has a positive or negative metric for each of the 17 goals. An investment must make a net positive contribution to the 17 SDGs in order to qualify as a sustainable investment.
To the extent that the plan requires that any sustainable investment make a net positive contribution to the sustainable goals, this means that the potential damage generated will not be significant, and will always be mitigated by the greater positive impact generated.
In addition to presenting a positive net contribution to the 17 SDGs, the plan's sustainable investments will comply with the principle of Do No Significant Harm to another sustainability goal, which will be achieved through combining the following management actions:
1. The very requirement of a positive net contribution to the 17 SDGs, which implies that the potential damage generated to one or several SDGs will not be significant and will always be mitigated by the greater positive impact generated to other SDGs.
2. Controversy analysis, as ESG analysis providers refer to those events or situations in which a company's operations or products may have a negative impact in environmental, social or corporate governance terms. For all plan investments, the number and seriousness of controversies detected will be continuously assessed, ensuring that no investment classified as a “sustainable investment” can cause significant harm, in ESG terms, based on those controversies.
3. The requirement of a minimum ESG rating that helps to ensure that the plan's investments meet minimum standards in managing environmental, social and corporate governance aspects, thereby eliminating the lowest-performing companies while managing these factors which, as a result, could cause significant damage to them.
4. The individual analysis of the quality of corporate governance of the investments made and the requirement that adequate standards are met in terms of ownership structure, management and control bodies, human resources management, accounting and fiscal transparency, as well as business ethics. These characteristics are assessed and scored within the breakdown of the ESG rating, and make it possible to set up an additional filter to ensure that the plan's intended sustainable investments comply with good governance practices.
5. The consideration of the Principal Adverse Impacts (PAIs) on sustainability factors.
6. When implemented, the Entity's exclusion policy, as detailed below, rules out any companies with significant exposure to economic activities with a highly negative environmental or social impact.
Consideration of the Principal Adverse Impact indicators is taken into account throughout the entire investment process, in order to manage the key indicators for the Do No Significant Harm (DNSH) assessment.
The management team will take account of the indicators listed in Table 1 and any of those listed in Tables 2 and 3 of Annex I to Delegated Regulation (EU) 2022/1288. The Do No Significant Harm principle is introduced into the investment classification process as “sustainable investments” or as “investments with other environmental or social characteristics”. The assessment of the Do No Significant Harm principle is part of the three pillars underpinning compliance with the regulatory definition of “sustainable investment”.
To the extent that sustainable investments are also subject to sustainability analysis through the ESG Rating“” indicator, which incorporates environmental, social and governance criteria compatible with the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions referred to in the ILO Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights, the team analyses the alignment of the investee companies with these principles and guidelines.
Environmental or social characteristics of the financial product
Last update: 31/05/2023.
By assessing the business practices of the companies in which it invests, the plan promotes environmental and social characteristics such as carbon efficiency, properly managing how natural resources and water are consumed, limiting the impact on biodiversity and land use, properly managing waste and toxic emissions, limiting the impact of pollution caused by non-recyclable packaging and materials, properly managing human resources in order to keep workplace risks under control and complying with labour rights, appropriately managing relationships with wider society and the company's impact on it in order to, for example, prevent violations of fundamental rights, reducing potential damages caused by a lack of suitable health and safety measures in the products and services offered, suitable protection for keeping customer data private and secure and/or monitoring these protection systems within its supply chains.
Investment strategy
Last update: 31/05/2023.
Initially, the Entity's exclusion policy is applied, ruling out companies with significant exposure to economic activities with a highly negative environmental or social impact. These activities include the production of weapons of mass destruction, the production of weapons considered controversial due to their impact on the civilian population, the generation of electricity from highly polluting sources or the exploration and production of oil and gas in areas or using techniques with a high ecological impact. Also excluded are any companies about which there is evidence that they do not respect the fundamental human rights defined by the United Nations or that do not comply with labour rights as defined in the Conventions of the International Labour Organization.
The plan then follows a “best-in-class” investment process, which involves selecting companies with the best assessment in terms of sustainability, according to the aforementioned indicator. At least 60% of the portfolio's assets will have a rating equal to or higher than the minimum set out in the “Monitoring the environmental or social characteristics” section and, within this majority share of the portfolio, sustainable investments must make a positive net contribution to the 17 SDGs set out above, which will account for at least 20% of the plan's assets.
In addition to the ex-ante assessment, prior to the investment decision, the management team performs a continuous assessment of the portfolio to analyse its alignment with the promoted sustainable characteristics.
The management team considers the good governance practices at the invested companies, via the indicator used (ESG Rating) for selecting investments. Specifically, when assessing the good governance of companies, ESG ratings include a specific section where aspects related to business ethics and the quality of corporate governance are taken into account. Here, various issues are assessed, such as the characteristics of the company's ownership structure, the operating characteristics and the composition of the control bodies, remuneration policies, accounting and fiscal transparency, the existence of control policies and mechanisms that effectively prevent actions in breach of business ethics as well as the existence of disputes related, for example, to cases of bribery, corruption, fraud, money laundering or anti-competitive practices.
Investment ratio
Last update: 31/05/2023.
Investments that promote sustainable characteristics will make up at least 60% of the assets in the portfolio. These investments will materialise in at least 20% of the plan's assets in sustainable investments with a social and/or environmental goals, as defined by Regulation (EU) 2019/88 in force.
The plan does not use derivatives in order to achieve the desired environmental or social characteristics.
Monitoring the environmental or social characteristics
Last update: 31/05/2023.
With a view to implementing the investment strategy and achieving the intended environmental and social characteristics, the management team has set the following requirements:
- All investments considered have a minimum ESG Rating of “BBB” on a scale ranging from AAA to CCC, with AAA being the best and CCC being the worst, or equivalent depending on the scale of the chosen ESG analytics provider(s).
- The portfolio has, in aggregate and on average, a minimum ESG Rating of “A” or equivalent depending on the scale of the chosen ESG analysis provider(s).
Any individual investment that does not reach the minimum required rating cannot be considered as adequately promoting the environmental and social characteristics and will no longer be included in the section on “Investments adjusted for environmental or social characteristics”. In order to assess the permanence of these investments, the team will consider the compliance with the portfolio's joint minimum rating target and the minimum proportion of 60% of the equity assigned to assets of “Investments adjusted for environmental or social characteristics”.
One of the plan's indicators is proper compliance with the environmental and social characteristics pursued by the “ESG rating” for the companies that it invests in.
Methods
Last update: 31/05/2023.
The “ESG rating” used as an indicator is a metric prepared by independent companies, specialised in the analysis of extra-financial risks. It offers a global assessment of the previously described environmental and social characteristics. However, the calculation methodology of an “ESG rating” differs depending on the provider. In general, all of them are based on identifying the most relevant environmental, social and governance variables, assessing and weighing them based on their relevance according to the sector or sub-industry to which the analysed company belongs. The final assessment is expressed in the form of a joint rating, although there is also the possibility of accessing individual scores for environmental, social and governance practices. The “ESG rating” is usually expressed in the form of letters or numbers depending on the provider, but in both cases, the values are expressed using a level scale to identify the degree of exposure to extra-financial risks faced by the analysed company, and its ability to manage them. Based on this scale, it is possible to determine if an investment has environmental, social and governance characteristics associated with a very low, low, medium, high or very high sustainability risk, and promote the selection of those that best fit the plan's goals.
With regard to Public Fixed Income, in addition to the “ESG rating” of the issuing companies, there are labels (green, social, sustainable) associated with specific emissions that contribute to and reinforce the identification of the investment's environmental or social characteristics.
The asset management vehicle arranged only uses external providers to determine ESG ratings and therefore does not develop its own methodology for these ratings.
As regards the methodology to assess the characteristics required of “sustainable investments”, and taking into account that their regulatory definition states that:
(1) the investment must be made in an economic activity that contributes to an environmental or social goal;
(2) the investment must not significantly harm any environmental or social goal (assessed based on the DNSH principle through the aforementioned indicators) and
(3) the investee company must follow good governance practices.
The asset management vehicle arranged implements its classification methodology based on the control and monitoring of:
(1) the net contribution to the Sustainable Development Goals as outlined in the relevant section.
(2) the favourable or unfavourable comparison in relative terms of the most significant metrics listed in Table 1 of Appendix I to Delegated Regulation (EU) 2022/1288, such as the intensity of greenhouse gas emissions, violations of the principles of the United Nations Global Compact, the lack of compliance processes and mechanisms to track compliance with these principles, the gender diversity of the board of directors or exposure to controversial weapons, and
(3) a check through the ESG rating and the analysis of controversies that good governance practices are properly followed.
The investment process takes these two methodologies into account, and the Entity monitors their compliance on a monthly basis. In addition, an annual report is put together focussing on how much the investment strategy and the social or environmental characteristics promoted by the plan have been achieved.
Data sources and processing
Last update: 30/11/2024.
MSCI ESG Research, a reputable third-party provider, provides non-financial data for the underlying assets in which the plan invests to assess whether the characteristics promoted by the plan have been attained and to assess these underlying assets using the aforementioned “ESG ratings”. Non-financial data cover all data concerning environmental, social and corporate governance issues and, as a result, also include data concerning “principal adverse impacts”.
As a result, the quality of these data hinges upon the provider chosen and whether these data are published by companies or issuers. When specific data are not published by companies or issuers, estimates may be required that may be significantly different from the figures ultimately published. The asset management vehicle arranged does not produce its own estimates and instead uses estimates from its external providers. In order to ensure that the data are high quality, the asset management vehicle arranged uses reputable external providers, monitoring and comparing how available and up-to-date the data provided by each of them are.
For indirect investments through CISs classified as Article 8 or 9 of Regulation (EU) 2019/88 products, data provided by their respective management companies are used.
The proportion of estimated data used from the providers, as well as from the management companies relating to investments in CISs is a tricky parameter to establish with the information currently available.
Limitations of the methods and data
Last update: 31/05/2023.
The methods used, and which have been described above, may present limitations and consequently may require modifications over time. The suitable measurement of how the social or environmental characteristics promoted by the plan are achieved may be limited by the availability and quality of the extra-financial information used to assess the ESG characteristics of the underlying assets in which it invests and/or of the asset issuers. The classification of assets as “sustainable investments” also requires a significant volume of data and assessment criteria that are not agreed upon at the European level, which can make the comparison between plans from different financial institutions complex.
In order prevent these limitations from affecting how the environmental or social characteristics promoted by the plan are met, the Entity constantly analyses and monitors the results and establishes regular checks on the percentage of assets that meet these characteristics, as well as the percentage of sustainable investments, confirming that both percentages meet the established thresholds.
Due diligence
Last update: 31/05/2023.
For the due diligence measures for the plan's underlying assets, the Entity has established an ex-ante control that does not allow an asset to be traded if this means that the plan does not meet the thresholds established in the “Monitoring environmental or social characteristics" section.
In addition, a regular ex-post control is performed, considering any sudden drops in the ESG rating of the financial assets that make up the plan's portfolio.
The information provided by external providers is also regularly updated in order to improve the coverage of the underlying assets that the plan invests in.
Engagement policies
Last update: 31/05/2023.
The Entity will monitor specific aspects of the business strategies, performance and financial and non-financial risk, capital structure, social and environmental impact and corporate governance of specific companies, to the extent that it deems appropriate taking its investment strategy and the type and size of its investment in them into account.
In order to perform this monitoring work, the Entity may use various sources and mechanisms, such as reviewing non-financial information, particularly in relation to ESG Risks and Factors.
The Entity interprets its fiduciary duty towards the unit holders of the Managed Vehicles as an effort to maximise the value of their investments in both the long and short term, in compliance with its management and administration responsibilities, not only as a shareholder but also by actively participating with the company's management.
The Entity is aware that, by participating in the Annual General Meetings or by engaging with the companies,“ ”faster growth and higher profitability are possible in the long run. The Entity believes that it is possible to improve long-term profitability and generate a positive impact on sustainability by integrating sustainability risks and factors into its Managed Vehicles and the investee companies.
Assigned benchmark index
Last update: 31/05/2023.
No specific benchmark index has been identified for establishing the plan's environmental and social characteristics.
Dissemination of sustainability information
Statement on the Main Adverse Impacts of Investment Decisions on Sustainability Factors 30 June 2023.
Statement of the Main Adverse Impacts of Investment Advice on Sustainability Factors 30 June 2023.
Statement of Principal Adverse Impacts of investment advice on sustainability factors 30th June 2024.
Information on sustainability
Summary
Last update: 30/11/2024.
This plan (hereinafter, the “plan”), promotes environmental characteristics, and is classified as an Article 8 of Regulation (EU) 2019/2088 financial product. However, it does not have a sustainable investment objective.
Nevertheless, even though the plan does not have a sustainable investment objective, it intends to make sustainable investments. The plan's sustainable investments set out to further all of the Sustainable Development Goals (SDGs) outlined within the United Nations 2030 Agenda. An investment must make a net positive contribution to the 17 SDGs in order to qualify as a sustainable investment.
Within these investments, any potential damage caused must not be significant and must always be mitigated by the greater positive impact generated, in order to not significantly undermine any environmental or social sustainable investment goal, given that the plan requires all sustainable investments to make a net positive contribution to the sustainable goals being pursued.
Additionally, consideration of the Main Adverse Incidents indicators is taken into account throughout the entire investment process, in order to manage the key indicators for the Do No Significant Harm (DNSH) assessment.
To the extent that sustainable investments are also subject to sustainability analysis through the ESG Rating“” indicator, which incorporates environmental, social and governance criteria compatible with the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions referred to in the ILO Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights, the team analyses the alignment of the investee companies with these principles and guidelines.
By assessing the business practices of the companies in which it invests, the Fund promotes environmental and social characteristics such as carbon efficiency, properly managing how natural resources and water are consumed, limiting the impact on biodiversity and land use, properly managing waste and toxic emissions, limiting the impact of pollution caused by non-recyclable packaging and materials, properly managing human resources in order to keep workplace risks under control and complying with labour rights, appropriately managing relationships with wider society and the company's impact on it in order to, for example, prevent violations of fundamental rights, reducing potential damages caused by a lack of suitable health and safety measures in the products and services offered, suitable protection for keeping customer data private and secure and/or monitoring of these protection systems within its supply chains.
In order to ensure compliance with the environmental or social characteristics promoted by the plan, the initial step in the investment strategy involves applying the Entity's exclusion policy, which rules out companies with high exposure to economic activities which have a significantly negative environmental or social impact, or which violate fundamental human or labour rights. The plan then follows a “best-in-class” investment process.
The management team takes the good governance practices at the companies in which it invests into account, via the indicator used (ASG Rating) for selecting investments. When considering the planned investment ratio for the portfolio, at least 60% of the portfolio's assets is established for investments that promote environmental or social characteristics, and a minimum of 20% of its assets is specified for sustainable investments.
The ESG Rating indicator, which must meet the minimum required value both for each individual asset and at an overall level for the entire portfolio, is used for monitoring the environmental or social characteristics promoted by the plan.
The plan uses methods which have been specifically developed both for measuring both compliance with environmental or social characteristics, where the “ESG rating” indicator is used as a metric, and for assessing the sustainable investments based on their net positive contribution towards the 17 SDGs.
In order to deploy these methods, the Entity uses data from reputable suppliers. However, there may be constraints on the availability and quality of the non-financial information used for assessing the ESG Rating indicator and sustainable investments. The Entity continuously analyses and monitors the results from these assessments in order mitigate these constraints.
The Entity has a due diligence measure targeting the plan's underlying assets, which involves continuously monitoring them and their compliance with the environmental and social characteristics promoted by the plan.
The Entity also has an Engagement Policy which contains processes focussing on actively engaging with issuers“ ”and on voting on potential companies in which to invest.
No specific benchmark index has been identified for establishing the plan's environmental and social characteristics.
No sustainable investment goal
Last update: 30/11/2024.
This financial product promotes environmental or social characteristics, but does not aim at sustainable investment.
However, the plan sets out to make sustainable investments. The plan's sustainable investments set out to further all of the Sustainable Development Goals (SDGs) outlined within the United Nations 2030 Agenda. There are 17 SDGs, including the following: 1) no poverty; 2) end hunger; 3) ensure health and well-being; 4) guarantee education; 5) achieve gender equality, 6) guarantee the availability and sustainable management of water; 7) guarantee access to affordable and sustainable energy; 8) promote economic growth and decent employment; 9) promote industry, innovation and infrastructure; 10) reduce inequalities; 11) achieve inclusive, safe and sustainable cities and communities; 12) guarantee sustainable consumption and production patterns; 13) take measures to combat climate change and its effects; 14) conserve and sustainably use the oceans, seas and marine resources; 15) sustainably manage forests, combat desertification and land degradation; 16) promote justice and peace through institutions and 17) contribute to the Global Partnership for Sustainable Development.
By making this type of sustainable investment, the plan intends to contribute positively to these goals defined in the SDGs. In order to identify these investments, the plan uses an indicator from an external provider, specialised in ESG analysis, with an established methodology for measuring each company's contribution to each of the 17 SDGs based on their operations, products, services, policies and practices for addressing these challenges. Based on the above, each company analysed has a positive or negative metric for each of the 17 goals. An investment must make a net positive contribution to the 17 SDGs in order to qualify as a sustainable investment.
To the extent that the plan requires that any sustainable investment make a net positive contribution to the sustainable goals, this means that the potential damage generated will not be significant, and will always be mitigated by the greater positive impact generated.
In addition to presenting a positive net contribution to the 17 SDGs, the plan's sustainable investments will comply with the principle of Do No Significant Harm to another sustainability goal, which will be achieved through combining the following management actions:
1. The very requirement of a positive net contribution to the 17 SDGs, which implies that the potential damage generated to one or several SDGs will not be significant and will always be mitigated by the greater positive impact generated to other SDGs.
2. Controversy analysis, as ESG analysis providers refer to those events or situations in which a company's operations or products may have a negative impact in environmental, social or corporate governance terms. For all plan investments, the number and seriousness of controversies detected will be continuously assessed, ensuring that no investment classified as a “sustainable investment” can cause significant harm, in ESG terms, based on those controversies.
3. The requirement of a minimum ESG rating that helps to ensure that the plan's investments meet minimum standards in managing environmental, social and corporate governance aspects, thereby eliminating the lowest-performing companies while managing these factors which, as a result, could cause significant damage to them.
4. The individual analysis of the quality of corporate governance of the investments made and the requirement that adequate standards are met in terms of ownership structure, management and control bodies, human resources management, accounting and fiscal transparency, as well as business ethics. These characteristics are assessed and scored within the breakdown of the ESG rating, and make it possible to set up an additional filter to ensure that the plan's intended sustainable investments comply with good governance practices.
5. The consideration of the Principal Adverse Impacts (PAIs) on sustainability factors.
6. When implemented, the Entity's exclusion policy, as detailed below, rules out any companies with significant exposure to economic activities with a highly negative environmental or social impact.
Consideration of the Principal Adverse Impact indicators is taken into account throughout the entire investment process, in order to manage the key indicators for the Do No Significant Harm (DNSH) assessment.
The management team will take account of the indicators listed in Table 1 and any of those listed in Tables 2 and 3 of Annex I to Delegated Regulation (EU) 2022/1288. The Do No Significant Harm principle is introduced into the investment classification process as “sustainable investments” or as “investments with other environmental or social characteristics”. The assessment of the Do No Significant Harm principle is part of the three pillars underpinning compliance with the regulatory definition of “sustainable investment”.
To the extent that sustainable investments are also subject to sustainability analysis through the ESG Rating“” indicator, which incorporates environmental, social and governance criteria compatible with the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions referred to in the ILO Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights, the team analyses the alignment of the investee companies with these principles and guidelines.
Environmental or social characteristics of the financial product
Last update: 31/05/2023.
By assessing the business practices of the companies in which it invests, the plan promotes environmental and social characteristics such as carbon efficiency, properly managing how natural resources and water are consumed, limiting the impact on biodiversity and land use, properly managing waste and toxic emissions, limiting the impact of pollution caused by non-recyclable packaging and materials, properly managing human resources in order to keep workplace risks under control and complying with labour rights, appropriately managing relationships with wider society and the company's impact on it in order to, for example, prevent violations of fundamental rights, reducing potential damages caused by a lack of suitable health and safety measures in the products and services offered, suitable protection for keeping customer data private and secure and/or monitoring these protection systems within its supply chains.
Investment strategy
Last update: 31/05/2023.
Initially, the Entity's exclusion policy is applied, ruling out companies with significant exposure to economic activities with a highly negative environmental or social impact. These activities include the production of weapons of mass destruction, the production of weapons considered controversial due to their impact on the civilian population, the generation of electricity from highly polluting sources or the exploration and production of oil and gas in areas or using techniques with a high ecological impact. Also excluded are any companies about which there is evidence that they do not respect the fundamental human rights defined by the United Nations or that do not comply with labour rights as defined in the Conventions of the International Labour Organization.
The plan then follows a “best-in-class” investment process, which involves selecting companies with the best assessment in terms of sustainability, according to the aforementioned indicator. At least 60% of the portfolio's assets will have a rating equal to or higher than the minimum set out in the “Monitoring the environmental or social characteristics” section and, within this majority share of the portfolio, sustainable investments must make a positive net contribution to the 17 SDGs set out above, which will account for at least 20% of the plan's assets.
In addition to the ex-ante assessment, prior to the investment decision, the management team performs a continuous assessment of the portfolio to analyse its alignment with the promoted sustainable characteristics.
The management team considers the good governance practices at the invested companies, via the indicator used (ESG Rating) for selecting investments. Specifically, when assessing the good governance of companies, ESG ratings include a specific section where aspects related to business ethics and the quality of corporate governance are taken into account. Here, various issues are assessed, such as the characteristics of the company's ownership structure, the operating characteristics and the composition of the control bodies, remuneration policies, accounting and fiscal transparency, the existence of control policies and mechanisms that effectively prevent actions in breach of business ethics as well as the existence of disputes related, for example, to cases of bribery, corruption, fraud, money laundering or anti-competitive practices.
Investment ratio
Last update: 31/05/2023.
Investments that promote sustainable characteristics will make up at least 60% of the assets in the portfolio. These investments will materialise in at least 20% of the plan's assets in sustainable investments with a social and/or environmental goals, as defined by Regulation (EU) 2019/88 in force.
The plan does not use derivatives in order to achieve the desired environmental or social characteristics.
Monitoring the environmental or social characteristics
Last update: 31/05/2023.
With a view to implementing the investment strategy and achieving the intended environmental and social characteristics, the management team has set the following requirements:
- All investments considered have a minimum ESG Rating of “BBB” on a scale ranging from AAA to CCC, with AAA being the best and CCC being the worst, or equivalent depending on the scale of the chosen ESG analytics provider(s).
- The portfolio has, in aggregate and on average, a minimum ESG Rating of “A” or equivalent depending on the scale of the chosen ESG analysis provider(s).
Any individual investment that does not reach the minimum required rating cannot be considered as adequately promoting the environmental and social characteristics and will no longer be included in the section on “Investments adjusted for environmental or social characteristics”. In order to assess the permanence of these investments, the team will consider the compliance with the portfolio's joint minimum rating target and the minimum proportion of 60% of the equity assigned to assets of “Investments adjusted for environmental or social characteristics”.
One of the plan's indicators is proper compliance with the environmental and social characteristics pursued by the “ESG rating” for the companies that it invests in.
Methods
Last update: 31/05/2023.
The “ESG rating” used as an indicator is a metric prepared by independent companies, specialised in the analysis of extra-financial risks. It offers a global assessment of the previously described environmental and social characteristics. However, the calculation methodology of an “ESG rating” differs depending on the provider. In general, all of them are based on identifying the most relevant environmental, social and governance variables, assessing and weighing them based on their relevance according to the sector or sub-industry to which the analysed company belongs. The final assessment is expressed in the form of a joint rating, although there is also the possibility of accessing individual scores for environmental, social and governance practices. The “ESG rating” is usually expressed in the form of letters or numbers depending on the provider, but in both cases, the values are expressed using a level scale to identify the degree of exposure to extra-financial risks faced by the analysed company, and its ability to manage them. Based on this scale, it is possible to determine if an investment has environmental, social and governance characteristics associated with a very low, low, medium, high or very high sustainability risk, and promote the selection of those that best fit the plan's goals.
With regard to Public Fixed Income, in addition to the “ESG rating” of the issuing companies, there are labels (green, social, sustainable) associated with specific emissions that contribute to and reinforce the identification of the investment's environmental or social characteristics.
The asset management vehicle arranged only uses external providers to determine ESG ratings and therefore does not develop its own methodology for these ratings.
As regards the methodology to assess the characteristics required of “sustainable investments”, and taking into account that their regulatory definition states that:
(1) the investment must be made in an economic activity that contributes to an environmental or social goal;
(2) the investment must not significantly harm any environmental or social goal (assessed based on the DNSH principle through the aforementioned indicators) and
(3) the investee company must follow good governance practices.
The asset management vehicle arranged implements its classification methodology based on the control and monitoring of:
(1) the net contribution to the Sustainable Development Goals as outlined in the relevant section.
(2) the favourable or unfavourable comparison in relative terms of the most significant metrics listed in Table 1 of Appendix I to Delegated Regulation (EU) 2022/1288, such as the intensity of greenhouse gas emissions, violations of the principles of the United Nations Global Compact, the lack of compliance processes and mechanisms to track compliance with these principles, the gender diversity of the board of directors or exposure to controversial weapons, and
(3) a check through the ESG rating and the analysis of controversies that good governance practices are properly followed.
The investment process takes these two methodologies into account, and the Entity monitors their compliance on a monthly basis. In addition, an annual report is put together focussing on how much the investment strategy and the social or environmental characteristics promoted by the plan have been achieved.
Data sources and processing
Last update: 30/11/2024.
MSCI ESG Research, a reputable third-party provider, provides non-financial data for the underlying assets in which the plan invests to assess whether the characteristics promoted by the plan have been attained and to assess these underlying assets using the aforementioned “ESG ratings”. Non-financial data cover all data concerning environmental, social and corporate governance issues and, as a result, also include data concerning “principal adverse impacts”.
As a result, the quality of these data hinges upon the provider chosen and whether these data are published by companies or issuers. When specific data are not published by companies or issuers, estimates may be required that may be significantly different from the figures ultimately published. The asset management vehicle arranged does not produce its own estimates and instead uses estimates from its external providers. In order to ensure that the data are high quality, the asset management vehicle arranged uses reputable external providers, monitoring and comparing how available and up-to-date the data provided by each of them are.
For indirect investments through CISs classified as Article 8 or 9 of Regulation (EU) 2019/88 products, data provided by their respective management companies are used.
The proportion of estimated data used from the providers, as well as from the management companies relating to investments in CISs is a tricky parameter to establish with the information currently available.
Limitations of the methods and data
Last update: 31/05/2023.
The methods used, and which have been described above, may present limitations and consequently may require modifications over time. The suitable measurement of how the social or environmental characteristics promoted by the plan are achieved may be limited by the availability and quality of the extra-financial information used to assess the ESG characteristics of the underlying assets in which it invests and/or of the asset issuers. The classification of assets as “sustainable investments” also requires a significant volume of data and assessment criteria that are not agreed upon at the European level, which can make the comparison between plans from different financial institutions complex.
In order prevent these limitations from affecting how the environmental or social characteristics promoted by the plan are met, the Entity constantly analyses and monitors the results and establishes regular checks on the percentage of assets that meet these characteristics, as well as the percentage of sustainable investments, confirming that both percentages meet the established thresholds.
Due diligence
Last update: 31/05/2023.
For the due diligence measures for the plan's underlying assets, the Entity has established an ex-ante control that does not allow an asset to be traded if this means that the plan does not meet the thresholds established in the “Monitoring environmental or social characteristics" section.
In addition, a regular ex-post control is performed, considering any sudden drops in the ESG rating of the financial assets that make up the plan's portfolio.
The information provided by external providers is also regularly updated in order to improve the coverage of the underlying assets that the plan invests in.
Engagement policies
Last update: 31/05/2023.
The Entity will monitor specific aspects of the business strategies, performance and financial and non-financial risk, capital structure, social and environmental impact and corporate governance of specific companies, to the extent that it deems appropriate taking its investment strategy and the type and size of its investment in them into account.
In order to perform this monitoring work, the Entity may use various sources and mechanisms, such as reviewing non-financial information, particularly in relation to ESG Risks and Factors.
The Entity interprets its fiduciary duty towards the unit holders of the Managed Vehicles as an effort to maximise the value of their investments in both the long and short term, in compliance with its management and administration responsibilities, not only as a shareholder but also by actively participating with the company's management.
The Entity is aware that, by participating in the Annual General Meetings or by engaging with the companies,“ ”faster growth and higher profitability are possible in the long run. The Entity believes that it is possible to improve long-term profitability and generate a positive impact on sustainability by integrating sustainability risks and factors into its Managed Vehicles and the investee companies.
Assigned benchmark index
Last update: 31/05/2023.
No specific benchmark index has been identified for establishing the plan's environmental and social characteristics.
Dissemination of sustainability information
Statement on the Main Adverse Impacts of Investment Decisions on Sustainability Factors 30 June 2023.
Statement of the Main Adverse Impacts of Investment Advice on Sustainability Factors 30 June 2023.
Statement of Principal Adverse Impacts of investment advice on sustainability factors 30th June 2024.
Information on sustainability
Summary
Last update: 30/11/2024.
This plan (hereinafter, the “plan”), promotes environmental characteristics, and is classified as an Article 8 of Regulation (EU) 2019/2088 financial product. However, it does not have a sustainable investment objective.
Nevertheless, even though the plan does not have a sustainable investment objective, it intends to make sustainable investments. The plan's sustainable investments set out to further all of the Sustainable Development Goals (SDGs) outlined within the United Nations 2030 Agenda. An investment must make a net positive contribution to the 17 SDGs in order to qualify as a sustainable investment.
Within these investments, any potential damage caused must not be significant and must always be mitigated by the greater positive impact generated, in order to not significantly undermine any environmental or social sustainable investment goal, given that the plan requires all sustainable investments to make a net positive contribution to the sustainable goals being pursued.
Additionally, consideration of the Main Adverse Incidents indicators is taken into account throughout the entire investment process, in order to manage the key indicators for the Do No Significant Harm (DNSH) assessment.
To the extent that sustainable investments are also subject to sustainability analysis through the ESG Rating“” indicator, which incorporates environmental, social and governance criteria compatible with the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions referred to in the ILO Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights, the team analyses the alignment of the investee companies with these principles and guidelines.
By assessing the business practices of the companies in which it invests, the Fund promotes environmental and social characteristics such as carbon efficiency, properly managing how natural resources and water are consumed, limiting the impact on biodiversity and land use, properly managing waste and toxic emissions, limiting the impact of pollution caused by non-recyclable packaging and materials, properly managing human resources in order to keep workplace risks under control and complying with labour rights, appropriately managing relationships with wider society and the company's impact on it in order to, for example, prevent violations of fundamental rights, reducing potential damages caused by a lack of suitable health and safety measures in the products and services offered, suitable protection for keeping customer data private and secure and/or monitoring of these protection systems within its supply chains.
In order to ensure compliance with the environmental or social characteristics promoted by the plan, the initial step in the investment strategy involves applying the Entity's exclusion policy, which rules out companies with high exposure to economic activities which have a significantly negative environmental or social impact, or which violate fundamental human or labour rights. The plan then follows a “best-in-class” investment process.
The management team takes the good governance practices at the companies in which it invests into account, via the indicator used (ASG Rating) for selecting investments. When considering the planned investment ratio for the portfolio, at least 60% of the portfolio's assets is established for investments that promote environmental or social characteristics, and a minimum of 20% of its assets is specified for sustainable investments.
The ESG Rating indicator, which must meet the minimum required value both for each individual asset and at an overall level for the entire portfolio, is used for monitoring the environmental or social characteristics promoted by the plan.
The plan uses methods which have been specifically developed both for measuring both compliance with environmental or social characteristics, where the “ESG rating” indicator is used as a metric, and for assessing the sustainable investments based on their net positive contribution towards the 17 SDGs.
In order to deploy these methods, the Entity uses data from reputable suppliers. However, there may be constraints on the availability and quality of the non-financial information used for assessing the ESG Rating indicator and sustainable investments. The Entity continuously analyses and monitors the results from these assessments in order mitigate these constraints.
The Entity has a due diligence measure targeting the plan's underlying assets, which involves continuously monitoring them and their compliance with the environmental and social characteristics promoted by the plan.
The Entity also has an Engagement Policy which contains processes focussing on actively engaging with issuers“ ”and on voting on potential companies in which to invest.
No specific benchmark index has been identified for establishing the plan's environmental and social characteristics.
No sustainable investment goal
Last update: 30/11/2024.
This financial product promotes environmental or social characteristics, but does not aim at sustainable investment.
However, the plan sets out to make sustainable investments. The plan's sustainable investments set out to further all of the Sustainable Development Goals (SDGs) outlined within the United Nations 2030 Agenda. There are 17 SDGs, including the following: 1) no poverty; 2) end hunger; 3) ensure health and well-being; 4) guarantee education; 5) achieve gender equality, 6) guarantee the availability and sustainable management of water; 7) guarantee access to affordable and sustainable energy; 8) promote economic growth and decent employment; 9) promote industry, innovation and infrastructure; 10) reduce inequalities; 11) achieve inclusive, safe and sustainable cities and communities; 12) guarantee sustainable consumption and production patterns; 13) take measures to combat climate change and its effects; 14) conserve and sustainably use the oceans, seas and marine resources; 15) sustainably manage forests, combat desertification and land degradation; 16) promote justice and peace through institutions and 17) contribute to the Global Partnership for Sustainable Development.
By making this type of sustainable investment, the plan intends to contribute positively to these goals defined in the SDGs. In order to identify these investments, the plan uses an indicator from an external provider, specialised in ESG analysis, with an established methodology for measuring each company's contribution to each of the 17 SDGs based on their operations, products, services, policies and practices for addressing these challenges. Based on the above, each company analysed has a positive or negative metric for each of the 17 goals. An investment must make a net positive contribution to the 17 SDGs in order to qualify as a sustainable investment.
To the extent that the plan requires that any sustainable investment make a net positive contribution to the sustainable goals, this means that the potential damage generated will not be significant, and will always be mitigated by the greater positive impact generated.
In addition to presenting a positive net contribution to the 17 SDGs, the plan's sustainable investments will comply with the principle of Do No Significant Harm to another sustainability goal, which will be achieved through combining the following management actions:
1. The very requirement of a positive net contribution to the 17 SDGs, which implies that the potential damage generated to one or several SDGs will not be significant and will always be mitigated by the greater positive impact generated to other SDGs.
2. Controversy analysis, as ESG analysis providers refer to those events or situations in which a company's operations or products may have a negative impact in environmental, social or corporate governance terms. For all plan investments, the number and seriousness of controversies detected will be continuously assessed, ensuring that no investment classified as a “sustainable investment” can cause significant harm, in ESG terms, based on those controversies.
3. The requirement of a minimum ESG rating that helps to ensure that the plan's investments meet minimum standards in managing environmental, social and corporate governance aspects, thereby eliminating the lowest-performing companies while managing these factors which, as a result, could cause significant damage to them.
4. The individual analysis of the quality of corporate governance of the investments made and the requirement that adequate standards are met in terms of ownership structure, management and control bodies, human resources management, accounting and fiscal transparency, as well as business ethics. These characteristics are assessed and scored within the breakdown of the ESG rating, and make it possible to set up an additional filter to ensure that the plan's intended sustainable investments comply with good governance practices.
5. The consideration of the Principal Adverse Impacts (PAIs) on sustainability factors.
6. When implemented, the Entity's exclusion policy, as detailed below, rules out any companies with significant exposure to economic activities with a highly negative environmental or social impact.
Consideration of the Principal Adverse Impact indicators is taken into account throughout the entire investment process, in order to manage the key indicators for the Do No Significant Harm (DNSH) assessment.
The management team will take account of the indicators listed in Table 1 and any of those listed in Tables 2 and 3 of Annex I to Delegated Regulation (EU) 2022/1288. The Do No Significant Harm principle is introduced into the investment classification process as “sustainable investments” or as “investments with other environmental or social characteristics”. The assessment of the Do No Significant Harm principle is part of the three pillars underpinning compliance with the regulatory definition of “sustainable investment”.
To the extent that sustainable investments are also subject to sustainability analysis through the ESG Rating“” indicator, which incorporates environmental, social and governance criteria compatible with the OECD Guidelines for Multinational Enterprises and the United Nations Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight core conventions referred to in the ILO Declaration on Fundamental Principles and Rights at Work and the International Bill of Human Rights, the team analyses the alignment of the investee companies with these principles and guidelines.
Environmental or social characteristics of the financial product
Last update: 31/05/2023.
By assessing the business practices of the companies in which it invests, the plan promotes environmental and social characteristics such as carbon efficiency, properly managing how natural resources and water are consumed, limiting the impact on biodiversity and land use, properly managing waste and toxic emissions, limiting the impact of pollution caused by non-recyclable packaging and materials, properly managing human resources in order to keep workplace risks under control and complying with labour rights, appropriately managing relationships with wider society and the company's impact on it in order to, for example, prevent violations of fundamental rights, reducing potential damages caused by a lack of suitable health and safety measures in the products and services offered, suitable protection for keeping customer data private and secure and/or monitoring these protection systems within its supply chains.
Investment strategy
Last update: 31/05/2023.
Initially, the Entity's exclusion policy is applied, ruling out companies with significant exposure to economic activities with a highly negative environmental or social impact. These activities include the production of weapons of mass destruction, the production of weapons considered controversial due to their impact on the civilian population, the generation of electricity from highly polluting sources or the exploration and production of oil and gas in areas or using techniques with a high ecological impact. Also excluded are any companies about which there is evidence that they do not respect the fundamental human rights defined by the United Nations or that do not comply with labour rights as defined in the Conventions of the International Labour Organization.
The plan then follows a “best-in-class” investment process, which involves selecting companies with the best assessment in terms of sustainability, according to the aforementioned indicator. At least 60% of the portfolio's assets will have a rating equal to or higher than the minimum set out in the “Monitoring the environmental or social characteristics” section and, within this majority share of the portfolio, sustainable investments must make a positive net contribution to the 17 SDGs set out above, which will account for at least 20% of the plan's assets.
In addition to the ex-ante assessment, prior to the investment decision, the management team performs a continuous assessment of the portfolio to analyse its alignment with the promoted sustainable characteristics.
The management team considers the good governance practices at the invested companies, via the indicator used (ESG Rating) for selecting investments. Specifically, when assessing the good governance of companies, ESG ratings include a specific section where aspects related to business ethics and the quality of corporate governance are taken into account. Here, various issues are assessed, such as the characteristics of the company's ownership structure, the operating characteristics and the composition of the control bodies, remuneration policies, accounting and fiscal transparency, the existence of control policies and mechanisms that effectively prevent actions in breach of business ethics as well as the existence of disputes related, for example, to cases of bribery, corruption, fraud, money laundering or anti-competitive practices.
Investment ratio
Last update: 31/05/2023.
Investments that promote sustainable characteristics will make up at least 60% of the assets in the portfolio. These investments will materialise in at least 20% of the plan's assets in sustainable investments with a social and/or environmental goals, as defined by Regulation (EU) 2019/88 in force.
The plan does not use derivatives in order to achieve the desired environmental or social characteristics.
Monitoring the environmental or social characteristics
Last update: 31/05/2023.
With a view to implementing the investment strategy and achieving the intended environmental and social characteristics, the management team has set the following requirements:
- All investments considered have a minimum ESG Rating of “BBB” on a scale ranging from AAA to CCC, with AAA being the best and CCC being the worst, or equivalent depending on the scale of the chosen ESG analytics provider(s).
- The portfolio has, in aggregate and on average, a minimum ESG Rating of “A” or equivalent depending on the scale of the chosen ESG analysis provider(s).
Any individual investment that does not reach the minimum required rating cannot be considered as adequately promoting the environmental and social characteristics and will no longer be included in the section on “Investments adjusted for environmental or social characteristics”. In order to assess the permanence of these investments, the team will consider the compliance with the portfolio's joint minimum rating target and the minimum proportion of 60% of the equity assigned to assets of “Investments adjusted for environmental or social characteristics”.
One of the plan's indicators is proper compliance with the environmental and social characteristics pursued by the “ESG rating” for the companies that it invests in.
Methods
Last update: 31/05/2023.
The “ESG rating” used as an indicator is a metric prepared by independent companies, specialised in the analysis of extra-financial risks. It offers a global assessment of the previously described environmental and social characteristics. However, the calculation methodology of an “ESG rating” differs depending on the provider. In general, all of them are based on identifying the most relevant environmental, social and governance variables, assessing and weighing them based on their relevance according to the sector or sub-industry to which the analysed company belongs. The final assessment is expressed in the form of a joint rating, although there is also the possibility of accessing individual scores for environmental, social and governance practices. The “ESG rating” is usually expressed in the form of letters or numbers depending on the provider, but in both cases, the values are expressed using a level scale to identify the degree of exposure to extra-financial risks faced by the analysed company, and its ability to manage them. Based on this scale, it is possible to determine if an investment has environmental, social and governance characteristics associated with a very low, low, medium, high or very high sustainability risk, and promote the selection of those that best fit the plan's goals.
With regard to Public Fixed Income, in addition to the “ESG rating” of the issuing companies, there are labels (green, social, sustainable) associated with specific emissions that contribute to and reinforce the identification of the investment's environmental or social characteristics.
The asset management vehicle arranged only uses external providers to determine ESG ratings and therefore does not develop its own methodology for these ratings.
As regards the methodology to assess the characteristics required of “sustainable investments”, and taking into account that their regulatory definition states that:
(1) the investment must be made in an economic activity that contributes to an environmental or social goal;
(2) the investment must not significantly harm any environmental or social goal (assessed based on the DNSH principle through the aforementioned indicators) and
(3) the investee company must follow good governance practices.
The asset management vehicle arranged implements its classification methodology based on the control and monitoring of:
(1) the net contribution to the Sustainable Development Goals as outlined in the relevant section.
(2) the favourable or unfavourable comparison in relative terms of the most significant metrics listed in Table 1 of Appendix I to Delegated Regulation (EU) 2022/1288, such as the intensity of greenhouse gas emissions, violations of the principles of the United Nations Global Compact, the lack of compliance processes and mechanisms to track compliance with these principles, the gender diversity of the board of directors or exposure to controversial weapons, and
(3) a check through the ESG rating and the analysis of controversies that good governance practices are properly followed.
The investment process takes these two methodologies into account, and the Entity monitors their compliance on a monthly basis. In addition, an annual report is put together focussing on how much the investment strategy and the social or environmental characteristics promoted by the plan have been achieved.
Data sources and processing
Last update: 30/11/2024.
MSCI ESG Research, a reputable third-party provider, provides non-financial data for the underlying assets in which the plan invests to assess whether the characteristics promoted by the plan have been attained and to assess these underlying assets using the aforementioned “ESG ratings”. Non-financial data cover all data concerning environmental, social and corporate governance issues and, as a result, also include data concerning “principal adverse impacts”.
As a result, the quality of these data hinges upon the provider chosen and whether these data are published by companies or issuers. When specific data are not published by companies or issuers, estimates may be required that may be significantly different from the figures ultimately published. The asset management vehicle arranged does not produce its own estimates and instead uses estimates from its external providers. In order to ensure that the data are high quality, the asset management vehicle arranged uses reputable external providers, monitoring and comparing how available and up-to-date the data provided by each of them are.
For indirect investments through CISs classified as Article 8 or 9 of Regulation (EU) 2019/88 products, data provided by their respective management companies are used.
The proportion of estimated data used from the providers, as well as from the management companies relating to investments in CISs is a tricky parameter to establish with the information currently available.
Limitations of the methods and data
Last update: 31/05/2023.
The methods used, and which have been described above, may present limitations and consequently may require modifications over time. The suitable measurement of how the social or environmental characteristics promoted by the plan are achieved may be limited by the availability and quality of the extra-financial information used to assess the ESG characteristics of the underlying assets in which it invests and/or of the asset issuers. The classification of assets as “sustainable investments” also requires a significant volume of data and assessment criteria that are not agreed upon at the European level, which can make the comparison between plans from different financial institutions complex.
In order prevent these limitations from affecting how the environmental or social characteristics promoted by the plan are met, the Entity constantly analyses and monitors the results and establishes regular checks on the percentage of assets that meet these characteristics, as well as the percentage of sustainable investments, confirming that both percentages meet the established thresholds.
Due diligence
Last update: 31/05/2023.
For the due diligence measures for the plan's underlying assets, the Entity has established an ex-ante control that does not allow an asset to be traded if this means that the plan does not meet the thresholds established in the “Monitoring environmental or social characteristics" section.
In addition, a regular ex-post control is performed, considering any sudden drops in the ESG rating of the financial assets that make up the plan's portfolio.
The information provided by external providers is also regularly updated in order to improve the coverage of the underlying assets that the plan invests in.
Engagement policies
Last update: 31/05/2023.
The Entity will monitor specific aspects of the business strategies, performance and financial and non-financial risk, capital structure, social and environmental impact and corporate governance of specific companies, to the extent that it deems appropriate taking its investment strategy and the type and size of its investment in them into account.
In order to perform this monitoring work, the Entity may use various sources and mechanisms, such as reviewing non-financial information, particularly in relation to ESG Risks and Factors.
The Entity interprets its fiduciary duty towards the unit holders of the Managed Vehicles as an effort to maximise the value of their investments in both the long and short term, in compliance with its management and administration responsibilities, not only as a shareholder but also by actively participating with the company's management.
The Entity is aware that, by participating in the Annual General Meetings or by engaging with the companies,“ ”faster growth and higher profitability are possible in the long run. The Entity believes that it is possible to improve long-term profitability and generate a positive impact on sustainability by integrating sustainability risks and factors into its Managed Vehicles and the investee companies.
Assigned benchmark index
Last update: 31/05/2023.
No specific benchmark index has been identified for establishing the plan's environmental and social characteristics.
Dissemination of sustainability information
Statement on the Main Adverse Impacts of Investment Decisions on Sustainability Factors 30 June 2023.
Statement of the Main Adverse Impacts of Investment Advice on Sustainability Factors 30 June 2023.
Statement of Principal Adverse Impacts of investment advice on sustainability factors 30th June 2024.