29 July 2019
Responsible investment: ESG investing at ING
Do you want your investments to support companies that factor in the environment, society and good governance? You’re not alone: increasingly investors are choosing sustainable investments. It’s also an integral part of our strategy at ING.
Responsible investment in on the rise. Financial aspects like return and controlled risk are still important to investors. But there is at the same time a growing realisation that non-financial factors are a crucial element. And this is happening in the area of environment, society and good governance. ING supports this development and advises investors to invest in sustainable change.
Ethical investing involves one or more of these three strategies:
● Exclusionary screening of companies that don’t take the ESG rules seriously (ESG is a collective noun for Environmental, Social and Governance). Or the exclusion of controversial sectors such as weapons, tobacco and coal
● ‘Best-in-class’ investments: only investing in companies with the best ESG score compared to their competitors in a certain sector
● Active shareholdership sees the shareholder engage in permanent dialogue with the company. The shareholder (for example the manager of a sustainable investment fund) defends the ESG values at the general meetings of the company that they invest in.
As an investor you’ll have the utmost assurance that your capital is 100% sustainably invested with an ‘exclusionary’ strategy. Both of the other investment strategies encourage sustainable thinking and acting, and this also influences others. Ethical investment works to foster sustainability across the entire community. It’s not unlike, for instance, the first supermarket that charged for plastic bags: now many others do the same and today it’s the most normal thing in the world.
Most investment funds combine different strategies. ESG investing at ING also uses this approach. Whomever invests in ING, invests in sustainable change. The bank has established its own principles for responsible investment.
ING does not invest in companies that:
● compare negatively with other companies in the same sector when it comes to sustainable behaviour
● are focused on products that can have negative effects for people, the environment and society.
ING does invest in companies that:
● compare positively with other companies in their sector in terms of their sustainability policy
● offer products that move closer to achieving the United Nations’ Sustainable Development Goals.
For many years, responsible investment at ING has meant selecting sustainable funds with the greatest of care. Three elements pay a vital role: sustainability, return and risk. These elements are tested over four stages.
1. An analysis of the history of the fund, with a particular focus on return and risk
2. A wide-ranging questionnaire addressing the sustainability and governance of the fund manager and the fund
3. Conversations with the fund manager about investment and sustainability policies
4. Continuous monitoring of the selected funds in terms of return, risk, sustainability and other qualitative aspects, such as the makeup of the management team and the investment process.
As well as meeting the relevant sustainability criteria, all funds much achieve an above-average score in this sustainability test in order to be included in the range of sustainable investments.