The three sustainability filters of the IBS 30
IBS uses the MSCI ESG database to apply a filter based on ESG (Environmental, Social, Governance) criteria. This way not sustainable companies are excluded from the investable universe. We do so in three steps:
- UN Global Compact: using this standard we select the companies that, according to UN-criteria, uphold their fundamental responsibilities in 4 areas: human rights, working conditions, environment, and anti-corruption.
- Guideline Financial Management for Charities: this guideline, set by trade organisation Goede Doelen Nederland, is based on the the UN Global Compact, but has some additional guidelines. One of these is the exclusion of tabacco. We only select companies that are aligned with the guidelines set by Goede Doelen Nederland for sustainable investment.
Using these two filters only sustainable companies remain. Within this universe we search for companies with a sustainable competitive advantage. - Our own assessment: aside from the standards set by the UN Global Compact and the guideline Financial Management for Charities we conduct our own research. We shape our own view of the ESG-performance of the company.
For the IBS Impact we use an additional criterium: the company needs to have a positive impact on climate, health, or food. This is determined using the IBS Inclusionframework. Using this framework we assess both the current and the potential impact of the company.
Continuous Monitoring
We keep a close eye on the companies in the IBS 30 and IBS Impact. Among other things, we look at company data and ESG updates by MSCI ESG research. If a company no longer fits our criteria, we will divest.
For the IBS Impact we also use a framework, in which we track the most important ESG-metrics for each company. So that we can determine the actual progress of companies.
Measurable ESG impact
Our portfolios have a light-green sustainability classification. At portfolio level we track the ESG-performance of the IBS 30 and IBS Impact compared to our benchmark, the MSCI world index.
Sustainable profit
We believe sustainable companies are better prepared for the future, and thus lower future risk. Furthermore, we are convinced there is a strong positive correlation between ESG-performance and company performance.
Do you have any questions about our sustainable investment process? We would love to further elaborate on our ESG-considerations!