KBC is a pioneer and one of the largest players in Belgium in Responsible Investing (RI) for 30 years. We want to give our clients the opportunity to invest in companies and countries that recognise their social and environmental responsibility. This allows us to jointly contribute to a more sustainable society and to help limit the adverse impact that businesses have on society.
Growing awareness of social, governance and environmental issues has led to interest in responsible investing products among private and institutional investors. Responsible investing is a way of allowing clients to combine their financial goals with their concerns for the environment, society and corporate governance.
KBC as pioneer since 1992
KBC has a long tradition of responsible investments. In 1992, it launched the first responsible investment fund in Belgium. Since then, we have regularly brought new solutions to the market and our methodology has become increasingly stringent. KBC Asset Management was also the first financial institution in Belgium to have its own RI research unit. We also endorse the UN Principles for Responsible Investment and have enshrined them in our general investment policy.
Since June 2021, KBC Asset Management has excluded utility companies that use thermal coal to generate electricity and all companies that extract thermal coal from all its actively managed funds. For RI funds, we go one step further by excluding all companies in the fossil fuels sector and by applying exclusion policies such as for gambling, conventional weapons, fur and speciality leather … .
Since its inception, KBC Group has been a signatory of the 'Towards Sustainability' quality label, which was developed at the initiative of Febelfin, the sector association for the Belgian financial services industry. As part of this commitment, KBC Group ensures that all the responsible investing products marketed in Belgium have obtained or are in the process of obtaining the label.
KBC Asset Management current RI framework is a KBC in-house but well proven and externally challenged framework. KBC Asset Management is further aligning this framework to new EU regulations such as SFDR and MiFID (Markets in Financial Instruments Directive) and currently works under the assumption that all RI funds are either article 8 or article 9 funds under the SFDR.
A full range of responsible investing solutions
KBC offers a wide variety of responsible investing funds, ranging from traditional Best-in-Class funds and Thematic funds, to the Impact Investing funds.
• Best-in-Class investment funds invest in companies or countries that – compared to peers - are the best performers in terms of sound corporate governance, the environment and social themes.
• Eco-thematic funds invest in companies that offer with their products and services a solution to specific social issues such as active in areas such as climate change, the looming shortage of drinking water or the quest for alternative energy.
• The Impact Investing funds, invests in companies whose goods and/or services clearly have a direct positive impact on our society. We look, in other words, for companies that make it their core business activity not only to generate a financial return, but also to contribute positively to society or the environment.
KBC fund managers apply stringent screening methods for companies and countries
Thorough screening, based on strict and clear rules, is carried out to determine which companies and countries make up the investment universe for responsible investing solutions. We rule out investments in certain companies due to their controversial activities. We source information about companies from external research agencies specialising in sustainability research. KBC Asset Management puts a lot of emphasis on transparency and therefore makes all its research results available on its website.
How we guarantee independence
Responsible investing stands or falls by its credibility. Therefore the sustainability policy and criteria are monitored by the Responsible Investing Advisory Board, which is fully independent of KBC. The body consists of leading academics from several universities, who are experts in fields like human rights, business ethics, biology and ecology. They operate in their own name and do not represent the institutions at which they are employed. They advise which screening methodology we should use and set the criteria for rating companies. They also ensure that screening is complete, thorough and accurate.
Proxy voting: casting our vote as shareholder in the interest of our clients
KBC Asset Management pursues an active policy of proxy voting and engagement. By exercising the rights attached to shares held by the investment funds and by making its voice heard at the annual general meetings of these companies, KBC aims to defend the interests of its clients and investors. KBC Asset Management applies this active voting policy to several different themes, recognising that business, corporate governance and sustainability issues all determine the value of a company in the medium and long terms. All these factors can have a significant impact on value creation or the return enjoyed by clients and investors. In 2021, we participated in 351 general meetings and voted on more than 4 000 resolutions.
For more information on KBC’s responsible investing funds, feel free to visit Responsible investing - KBC Banking & Insurance