Can we measure the Impact of Engagement?
Can we measure the impact of engagement? What approach does NEF Ethical Global Trends fund take?
The NEF Ethical Global Trends fund is a sustainable fund compliant with Article 9 of the SFDR regulation.
It adopts a systematic approach to minimize the portfolio’s negative impact, aligning with the sustainable mission and territorial ethos of the 65 banks within the Italian Cooperative Banking Group and its parent company, Gruppo Cassa Centrale, which, together with Nord Est Asset Management, has also developed the product.
To achieve this goal, the fund employs several strategies:
- Investing exclusively in companies with robust governance, environmental, and social risk management procedures—procedures tailored to the company’s resources, geographic context, and industry (ESG analysis).
- Investing exclusively in companies that contribute to achieving the United Nations’ Sustainable Development Goals (SDGs).
- Excluding sectors that are clearly incompatible with sustainability objectives, such as tobacco and fossil fuels (controversial sector analysis).
- Ensuring that invested companies improve year by year in key PAI indicators, which measure their environmental and social impact (DNSH analysis).
- Ensuring compliance with human and social rights by portfolio companies (Minimum Safeguard Analysis).
- Examining corporate controversies to ensure that invested companies adopt effective procedures to anticipate and resolve potential violations of sustainability goals (controversy analysis).
If the DNSH analysis reveals a lack of progress toward sustainability, a direct dialogue is initiated with the companies involved to understand the causes and encourage tangible improvements. This interaction process is known as engagement.
But how impactful is this engagement activity? In other words, what effect does the fund’s engagement have on the sustainability metrics of these companies, year after year?
To answer this question, a new proprietary analysis has been developed: the Engagement Impact Report. This annual analysis measures the impact of engagement on PAI indicators, both in terms of improving these metrics and increasing transparency (i.e., the publication of these metrics, which is not yet mandatory).
See here for the 2023 report, which shows the impact of engagement in 2023 vs 2022.
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This is a communication for institutional investors. Read prospectus and KID before making any investment decision.
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