Socially responsible investing at BCV

Socially responsible investing (SRI) refers to any investment approach that takes environmental, social, and governance (ESG) criteria into account in the process of selecting and managing investments. It is an integral part of sustainable finance.

At BCV, our portfolio management process is guided by SRI principles as part of our commitment to sustainability.

ESG integration

 

We take a responsible and sustainable approach to investing by applying environmental, social, and governance (ESG) criteria to more and more of our investment products. That means we go beyond a company’s financials and look at how they contribute to sustainable development – based on these three criteria – before including them in the solutions we offer our clients. Ultimately, we aim to incorporate ESG criteria into every aspect of our investment management process.

To learn more about key SRI concepts, you can consult our glossary.

ESG

Our core SRI approaches

We use a number of SRI approaches to incorporate ESG factors into our investment selection and asset management processes. These core measures are: negative screening, ESG integration, best-in-class selection and positive screening, and active ownership (see definitions below). We also offer thematic investment solutions focused on companies that are making a positive environmental and social difference through their products and services.

Approach

What BCV does

1. Negative screening

Excluding companies linked to major controversies or practices that violate certain norms and values, or that pose risks

2. ESG integration

Incorporating ESG factors into the standard financial-analysis and stock-picking processes

3. Approaches based on ESG ratings

Positive screening: investing in companies in order to create a portfolio with an ESG rating that exceeds a benchmark or a minimum level

Best-in-class selection: comparing the ESG performance of companies within a sector and only investing in those whose performance is above a defined threshold

4. Active ownership (stewardship)

Exercising voting rights based on ESG principles and/or engaging in active dialogue with the management of investee companies to encourage them to apply ESG criteria within their sphere of influence

5. Thematic investments

Investing in companies that provide solutions to environmental and social challenges (such as those set out in the United Nations Sustainable Development Goals)

What’s an ESG rating?

Some of the SRI approaches defined above rely on ESG ratings. These ratings are designed to assess companies’ resilience to long-term ESG risks in their sector, and to take into account non-financial opportunities in the environmental, social and governance aspects of a company’s operations.

It is also important to understand the limits of ESG ratings. They do not assess a company’s negative impact on the environment and society, they are not climate ratings, and they do not measure a company’s “sustainability.”

ESG ratings are used to construct a robust portfolio and improve long-term risk-adjusted returns.

Two groups of socially responsible funds

ESG range

We integrate ESG criteria into all of our discretionary management agreements and advisory services. We make sure our clients have access to the best solutions available through a combination of in-house and third-party ESG investment products.

ESG Ambition range

We follow the same approach as with our ESG funds but go one step further – we allocate part of the assets to companies that offer solutions to the environmental and social challenges described in the UN’s 17 Sustainable Development Goals.

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