Sustainable investment, responsible investment or ESG investment: what’s the best term to use? Today, we are talking about 'responsible investment': investment that explicitly acknowledges the importance of he environment, social issues and good governance. We also follow new European regulations that reserve the term 'sustainable' for a specific number of activities and products.
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What is responsible investment?
Responsible investment funds invest in companies and countries which that embrace the ESG themes of Environment, Social and Governance.
This specific focus does not mean that you have to compromise on your returns. Research shows that social and financial returns can go hand in hand: funds that invest responsibly provide similar long-term returns to traditional funds.
Finally, responsible investment means you have an impact on the business world. KBC you enter into a dialogue with the companies in which you invest and help to determine their course through the exercise of voting rights at general meetings.
More than two out of three of our new investors choose responsible investment.
Kenneth De Bruycker - Expert in responsible investing at KBC
Three reasons to invest responsibly with KBC
A pioneer with more than 30 years’ experience
As early as 1992, KBC launched its first fund for responsible investment. This made us a Belgian pioneer in what was then still a niche market. Since then, we have built up more than 30 years’ expertise and we continue to play that pioneering role. For example, we regularly review our selection method and develop new investment solutions.
Straightforward and strict selection method
No KBC fund invests in tobacco, thermal coal or controversial weapons. Controversial regimes and human rights abusers are also not permitted. Find out more about the general exclusion policy.
Funds which invest responsibly are moreover subject to negative screening. Products such as conventional weapons, fur and adult entertainment are also excluded. See a full overview of negative screening.
Finally, we apply three types of positive screening: Best-In-Class, ECO-thematic and Impact Investing. You will find more on this below under ‘How do you invest responsibly atKBC?’.
Support from independent experts
KBC Asset Management holds quarterly meetings with the Responsible Investing Advisory Board, an advisory board of independent experts who challenge and inspire our policies.
They are all academics who:
• Provide feedback on our sustainability research methodology
• Check that the research is conducted correctly and completely
• Ensure the transparency of research
• Advise on company and country exclusions
• Discuss which companies should be included in the responsible investment universe.
Discover more about the operation and composition of the Responsible Investing Advisory Board.
Responsible investing with KBC
All KBC funds that invest responsibly carry the label 'Towards Sustainability', an initiative of Febelfin. This means that the funds follow a clear sustainability strategy, exclude very harmful or activities and have a transparent policy on socially controversial practices such as the death penalty.
In addition, KBC’s approach is based on three positive perspectives. You choose your responsible investment funds based on these three perspectives:
• Best-In-Class (BIC): these funds invest in companies or countries that are among the best in the field in terms of responsible business practices in their sector.
• ECO-thematic: thematic investment funds invest in companies that provide sustainable solutions to societal challenges such as climate change or water policy.
• Impact Investing: the focus with Impact Investing is on companies that have a direct positive impact on the environment and/or society through their products or services. Where the BIC approach is concerned with 'how', the emphasis here is on 'what'.
Like to know more about responsible investing?
How do companies and countries do things differently? And what impact does 'responsible' have on your investments? Be inspired by the articles and podcasts in the 'Make a Difference' series.