The sustainable investments of the Sub-Fund respect the “do no significant harm principle” by abiding to the following negative screening criteria:
Exclusion from the investible universe of the Sub-Fund of all investments in companies involved in socially controversial activities (tobacco, gambling, civilian and military weapons, controversial weapons and non-responsible alcohol).
Exclusion from the investible universe of the Sub-Fund of countries with low democratic levels, as measured by the PAI indicator average rule of law score. A low democratic level corresponds to a performance with respect to average rule of law score below the 50th percentile of all countries for which data are available. Data on average rule of law score are provided by at least one of the following sustainability data providers: The Upright Project, MSCI ESG Research, Physis Investment and Bloomberg.
Exclusion from the investible universe of the Sub-Fund of companies involved in either violations of UN Global Compact principles and OECD Guidelines for Multinational Enterprises or in very severe controversies regarding environmental, social or governance issues. If an investee company gets involved in violations of UN Global Compact principles and OECD Guidelines for Multinational Enterprises or in very severe controversies regarding environmental, social or governance issues, it loses its sustainable investment qualification, in that such involvements are deemed inconsistent with the respect of the DNSH principle. As a result, the Sub-Fund will divest from such an investee company within the shortest possible time span and in a way consistent with protecting investors’ best interests.
Exclusion from the investible universe of the Sub-Fund of companies not meeting at least one of the following criteria:
- a positive or improving impact performance, as measured by either the net impact ratio or the SDG performance indicator
- EU Taxonomy alignment
- a positive health impact performance indicator
- a decarbonisation trajectory, calculated according to the methodological requirements set out in Commission Delegated Regulation (EU) 2020/1818, consistent with the achievement of Paris Agreement’s objectives and carbon neutrality by 2050
For each existing and new sustainable investment of the portfolio a quarterly assessment of the principal adverse impact indicators described in Table 1 of Annex I of Regulation (EU) 2022/1288 is conducted, with the aim to improve over time the portfolio-level PAI performance.
In the investment process of the Sub-Fund, the following Principal adverse impact (PAI) indicators are considered at the investment- and portfolio-level, owing to their relevance for the investment strategy:
- GHG emissions (1) – trajectory improvement
- GHG intensity of investee companies (3) – trajectory improvement
- Violations of UN Global Compact principles and OECD Guidelines for Multinational Enterprises (10) – exclusion from investible universe
- Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises (11) – exclusion from investible universe
- Exposure to controversial weapons (14) – exclusion from investible universe
- Rate of accidents (2) – Table 3 – trajectory improvement
- Number of days lost to injuries, accidents, fatalities or illness (3) – Table 3 – trajectory improvement
- GHG intensity of investee countries (15) – trajectory improvement
- Average rule of law score (24) – Table 3 – exclusion from investible universe
If an investee company gets involved in violations of UN Global Compact principles and OECD Guidelines for Multinational Enterprises or in very severe controversies regarding environmental, social or governance issues, it loses its sustainable investment qualification, in that such involvements are deemed inconsistent with the respect of the DNSH principle. As a result, the Sub-Fund will divest from such an investee company within the shortest possible time span and in a way consistent with protecting investors’ best interests.
Known severe breaches in minimum behavioural norms detailed in the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organization on Fundamental Principles and Rights at Work and the International Bill of Human Rights, are a reason for exclusion from the Sub-Fund’s investment universe. Breach monitoring is conducted both for new and existing investments on a weekly basis. Sustainability data used for assessing company-level involvement in violations of the aforementioned behavioural principles are provided by at least one of the following data providers: The Upright Project, MSCI ESG Research and Physis Investment. Data are mainly available for mid- and large-cap companies. Involvement of small-cap companies in such breaches is monitored and assessed on a best-effort basis, with best-effort implying that the Management Company directly gathers data from public and corporate sources in order to assess whether a given investee for which no third-party data are available can be deemed involved in violations of aforementioned behavioural principles.