European SRI Transparency Code Version 3:0
The European SRI Transparency Code (the Code) focuses on SRI funds distributed publicly in Europe
and has been designed to cover a range of assets classes, such as equity and fixed income.
All information pertaining to the European SRI Transparency Code can be found at the following
website: www.eurosif.org. The Code comes with a Guidance Manual for fund managers on how to
best use and respond to the Transparency Code. The present version of the Code has been approved
by the Board of Eurosif on October 3, 2012.
TWO KEY MOTIVATIONS UNDERPIN THIS CODE
1. The opportunity for retail SRI funds to clarify their SRI approach to investors and other
stakeholders in an easily accessible and comparable format.
2. Proactively strengthen a self-regulation that contributes to the development and promotion
of SRI funds by setting up a common framework for transparency best practices.
GUIDING PRINCIPLE
Signatories to the Code should be open, honest and disclose accurate, adequate and timely
information to enable stakeholders, in particular consumers, to understand the ESG1 policies and
practices of the fund.
COMMITMENTS FROM SIGNATORIES
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The order and exact wording of the questions shall be respected;
Responses should be informative and clear, and the resources and methodologies
deployed should be described with as much detail and precision as possible;
Funds should report data in the currency that they use for other reporting purposes;
Reasons preventing the fund from providing all or part of the information to a given
question should be clearly stated and, in such a case, signatories should state when
they will be able to answer the question;
Responses shall be updated at least on an annual basis and should have a precise
publication date;
Responses to the Code should be easily accessible on the fund’s and/or fund
manager’s website. In any case, signatories should make it clear where to find the
information required by the Code;
Signatories are solely responsible for the answers to the questions, and should state
this in their response.
ESG stands for Environmental, Social and Governance.
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To clarify these commitments, signatories should include at the beginning of the response document
the following two statements:
Statement of Commitment
Sustainable and Responsible Investing is an essential part of the strategic positioning and behaviour
of RobecoSAM AG. We have been involved in SRI since 1995 and welcome the European SRI
Transparency Code.
This is our seventh statement of commitment and it covers the period 01.09.2015 to 31.08.2016. Our
full response to the European SRI Transparency Code can be accessed below and is available in the
annual report of the retail funds and on our website.
Compliance with the Transparency Code
RobecoSAM AG is committed to transparency and we believe that we are as transparent as possible
given the regulatory and competitive environments that exist in the countries in which we operate.
RobecoSAM meets the full recommendations of the European SRI Transparency Code.
August 2015
CODE CATEGORIES
Section 1 – Basic Details
The Fund Management Company
1a Provide the name of the fund management company managing the fund(s) to which this code
apply.
Provide general information about The Fund Management Company managing the fund(s) to which
this code applies (e.g. name, address, website…).
RobecoSAM AG (formerly SAM Sustainable Asset Management AG)
Josefstrasse 218, CH-8005 Zürich
Web: www.robecosam.com
Martijn Oosterwoud
Head Client Portfolio Management & RFP
RobecoSAM
Email: martijn.oosterwoud@robecosam.com
Tel: +41 44 653 1072
Web: www.robecosam.com
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1b Describe the general approach of the fund management company with regards to how it takes
environmental, social and governance (ESG) criteria into consideration.
Is the fund management company approach towards ESG criteria aligned or inspired by its corporate
social responsibility approach? Yes/No. If yes, insert a link to the company’s CSR policy. If not, explain
why not.
RobecoSAM AG (formerly SAM Sustainable Asset Management AG) was founded in 1995 as
an independent asset management company focusing exclusively on sustainability investing,
and has grown to become one of the world's leading institutions in this field. Its client base
includes banks, insurance companies, pension funds and family offices.
In partnership with S&P Dow Jones Indices, RobecoSAM has developed and licenses the
globally recognized Dow Jones Sustainability Indices (DJSI), launched in September of 1999.
The DJSI family has since grown to include global, European, Eurozone, North American, US,
Asia-Pacific, Emerging Markets benchmarks and a Diversified index family.
Sustainability Investing is at the heart of RobecoSAM’s business. Our mission is “to translate
sustainability foresight into outstanding investment results”. All our business processes
(including our corporate strategy, investment approaches, management, and governance
structures) are aligned with this goal.
Please see below for an overview of RobecoSAM’s corporate responsibility achievements:
2001:
RobecoSAM becomes the first company in Switzerland to receive the Carbon
Neutral(r) status in 2001, and is awarded the CarbonNeutral(r) status each year
since.
2002:
RobecoSAM partners with the Association for Sustainable & Responsible
Investment in Asia (ASrIA)
2004:
RobecoSAM signs up to the transparency guidelines for sustainable retail funds
issued by the European Social Investment Forum (Eurosif)
2007:
RobecoSAM becomes a signatory of the Principles for Responsible Investments
(PRI).
2009:
RobecoSAM becomes a member of the Investor Network for Climate Risk and the
Ceres Coalition.
2010:
RobecoSAM
signs
and
endorses
the
CEO
Water
Mandate
(http://ceowatermandate.org/), which is an initiative of the UN Global Compact.
2011:
RobecoSAM becomes a partner of co2-monitor – a tool which enables the users
to discover their personal CO2 emissions and find out how to reduced it.
2012:
Drink and Donate: The concept of "Drink and Donate" means that by drinking
Switzerland’s clean tap water, we can donate water to those lacking access. The
goal of ZH2O is to create awareness and increase fairness. Awareness that water
is precious and we should appreciate the high quality water we have locally and
fairness in that we help people without access to clean drinking water. Through
our participation in drink & donate, for each employee, RobecoSAM is now able to
provide for long term access to clean drinking water to those who lack it.
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2013:
RobecoSAM establishes a collaboration with CDP: CDP is the provider of the only
global environmental disclosure system and the producer of the annual Climate
Disclosure and Climate Performance Leadership Indexes (CDLI & CPLI). In the
annual RobecoSAM Corporate Sustainability Assessment, RobecoSAM now asks
public companies the same climate change questions as those developed over
the past decade by CDP. This collaboration improves the comparability of
sustainability data in the global market.
2014: RobecoSAM in cooperation with the Asian Development Bank and Orix announced
the formation of Asia Climate Partners (ACP), a joint venture that undertakes
commercially-oriented private equity investments across a variety of
environmentally supportive, low-carbon transactions throughout Asia.
2015:
RobecoSAM became a signatory of the Portfolio Decarbonization Coalition, a
multi-stakeholder initiative that will drive GHG emissions reductions by mobilizing
a critical mass of institutional investors committed to gradually decarbonizing their
portfolios.
Has the fund management company signed the Principles for Responsible Investment? If yes, please
insert the link to the answer to the PRI questionnaire. If not, explain why not.
In 2007, RobecoSAM became a signatory of the Principles for Responsible Investments (PRI).
In August 2015, RobecoSAM has announced that they have been awarded an A+ score by
the UN PRI for their overarching approach to Sustainability Investing. Of the 681 investment
managers that are signatories of the UN PRI, only 16% received A+ scores for their
overarching approach.
RobecoSAM’s responses to the last PRI Reporting and Assessment survey can be requested
via cc@robeco.nl or com@robecosam.com
Is the fund Manager a signatory or a member of other international and/or national initiatives
supporting SRI practices? Please answer if you deem this information to be useful.
Please refer to our response above on page 3, regarding RobecoSAM’s membership of
international initiatives supporting SRI practice.
In addition, we are involved in a number of academic collaborations in which we share our
sustainability data with partner universities, business schools and research institutions, such
as Swiss Federal Institute of Technology (ETH), Erasmus University and WWF UK, and
support them in conducting empirical research on the linkages between sustainability
performance and financial performance. Finally, we participate in a number of industry forums
(such as UNPRI, Ceres, and Forum Nachaltige Geldanlage (FNG)) and thought-leadership
initiatives in which we seek to advance key sustainability topics such as water footprint and
education.
In 2004, RobecoSAM signed up to the transparency guidelines for sustainable retail funds
issued by the European Social Investment Forum (Eurosif).
Has the fund management company established an ESG engagement policy? If yes, describe the
policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If
not, explain why not.
RobecoSAM’s Governance & Active Ownership team provides engagement and voting services for
institutional investors. We engage with companies on behalf of Robeco Group and our clients to
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maximize the value of their investments, leveraging expertise from our investment analysts and the
sustainability insight accumulated through our annual RobecoSAM Corporate Sustainability
Assessment (CSA) – which forms the research backbone of RobecoSAM’s asset management
activities and the Dow Jones Sustainability Indices (DJSI).
The ultimate goal of our engagement is to increase the long-term shareholder value of the companies
we invest in. Engagement knowledge, sustainability expertise from RobecoSAM and investor insights
from across the Robeco Group are combined in our engagement approach and process. The
Governance & Active Ownership team works closely together with the Sustainability Investing
Research department of RobecoSAM and the Robeco and RobecoSAM investment teams to focus on
financially material engagement cases.
We engage companies by entering into constructive dialogues. Through these dialogues, we
encourage companies to adopt socially conscious, environmentally rigorous and ethically sound
business practices. Our approach also covers corporate governance topics such as the improvement
of the board quality, the remuneration policy of executives, corporate structures and controlling rights.
RobecoSAM’s Governance & Active Ownership team applies two engagement approaches:
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Enhanced engagement. Aimed at influencing companies to act according to the UN Global
Compact principles.
Value engagement. Aimed at making a link between investment activities and active
ownership.
Enhanced engagement
Our enhanced engagement program focuses on companies that severely and structurally breach the
principles of the United Nations Global Compact (UNGC).
The process is based on a systematic analysis of alleged breaches of UN Global Compact principles
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Our enhanced engagement case selection process is aligned with the Media & Stakeholder
Analysis (MSA) performed as part of the annual RobecoSAM Corporate Sustainability
Assessment conducted by RobecoSAM’s Sustainability Investing research team.
The MSA process continuously monitors the news flow of global print and online media and
other publicly available information from consumer organizations, governments and NGOs
based on data provided by service provider RepRisk and evaluates the companies’ responses
to environmental, economic or social crisis situations that may have a negative impact on their
core business or reputation.
The Governance & Active Ownership team then applies a specific UNGC breach filter on the
MSA outcome to categorize the incidents and identify the companies most severely breaching
the UNGC.
Companies are selected based on the severity of the alleged breaches and on portfolio
holdings.
 For engagement, we prioritize those companies which are in the portfolios of Robeco Group
and our clients.
 Enhanced engagement is aimed at influencing companies to act in line with the UN Global
Compact. In order to measure progress we use standardized objectives focused on
elimination of the breach, policy, stakeholder dialogue, risk management systems and
transparency.
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The engagement typically runs over a three-year period, during which we have regular
meetings with company representatives to track their progress against our engagement
objectives.
If a company is not willing to improve its conduct during the three years, there is a possibility
to revert to more stringent methods such as exclusion from our investment universe.
In this case we can provide clients with an advise for exclusion. The ultimate decision will
obviously remain with the client.
Value engagement
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The process is focused on making the link between investment activities and
responsible ownership activities. By discussing sustainability risks and opportunities with
companies and providing them with insights into investors’ expectations of corporate behavior,
we encourage these companies to adopt better practices. Companies with sustainable
business practices can create a competitive advantage and are likely to improve the riskreturn profile of their shares.
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Issues are identified based on their financial materiality. We focus our value engagement
activities on a limited number of sustainability themes that have most potential to create value.
Financial materiality of ESG issues is assessed by the Sustainability Investing research team,
investment teams of the Robeco Group and the Governance & Active Ownership team, in
consultation with our clients.
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Companies are selected based on lagging performance and portfolio holdings. For
these financially material themes we conduct a baseline study and develop engagement
profiles for the companies to be engaged. We prioritize companies in our portfolios and our
client portfolios that have most exposure to the respective engagement theme. Based on the
research study, we establish SMART (Specific, Measurable, Attainable, Relevant, Timebound) objectives and begin a dialogue to encourage companies to address the issues
identified. We have regular meetings with company representatives to track their progress
towards meeting our engagement objectives over a three-year period. This engagement is
aimed at improving the risk-return profile of the company’s stock and ultimately of our client’s
portfolio. In most cases Robeco engages with investee companies bilaterally, but there are
instances where collaborative engagement is more effective.
Has the fund management company established a voting policy? If yes, describe the policy by
outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If not,
explain why not.
Voting by proxy
The RobecoSAM Governance and Active Ownership team consists of 11 persons. This group
of voting and engagement specialists acts on behalf of the Robeco Group when engaging with
companies on sustainability topics.
RobecoSAM votes for all investment funds for which the costs of voting are not expected to
have a noticeable, negative impact on investment results. Each year RobecoSAM determines
for which of its investment funds it is cost effective to exercise its proxy voting rights. Currently,
RobecoSAM votes for the RobecoSAM Sustainable Agribusiness Equities strategy.
To avoid unnecessary costs and to increase the efficiency of the voting services in the
interests of our clients, RobecoSAM uses an electronic voting platform to cast votes.
Policy
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Describe how the fund management company or the group contributes to the promotion and the
development of SRI.
Promoting Sustainability Investing
RobecoSAM also hosts the annual RobecoSAM Forum, bringing together institutional
investors, asset managers and company stakeholders with the goal of analysing key
sustainability trends shaping industries and financial markets. By connecting key decisionmakers across the financial industry, the RobecoSAM Forum serves as a platform for
establishing a global community of thought leaders and practitioners of sustainability investing.
In addition, RobecoSAM is actively involved with over 10 other sustainability institutions and
organizations.These institutional include the following:, Global Real Estate Sustainability
Benchmark (GRESB), CDP, International Corporate Governance Network (ICGN), Investor
Network on Climate Risk (INCR)/CERES, United Nations Environment Programme Financ
Initiative (UNEP FI), United Nations Global Compact (UNGC), United Nations Principles for
Responsible Investment, Global Reporting Initiative, ASRIA, International Integrated
Reporting Committee (IIRC), and Sustainability Accounting Board Standards (SASB).
In our view, the first step to being a responsible and active owner is to send companies a
strong signal that we, as investors, are interested in how they manage sustainability issues.
Our questionnaire used for the RobecoSAM Corporate Sustainability Assessment acts as a
tool to encourage improved disclosure on key sustainability issues of interest to long-term
investors and offers companies a blueprint of industry best practices. Moreover, the Dow
Jones Sustainability Indices (DJSI), which is based on the results of RobecoSAM’s annual
assessment, offers investors an indirect engagement platform to have a collective impact on
companies through all our licensees.
One of the merits of indirect engagement is that it expands the scope of our efforts. In the first
phase of our Corporate Sustainability Assessment process, our invitations to the RobecoSAM
assessment reach 3300+ companies every year. Over 860 companies participate actively in
the assessment. Subsequently we enter into structured one-on-one dialogues with app. 150200 companies that have demonstrated an interest in improving their sustainability
performance. Discussions with management are based on a company-specific benchmarking
report that compares the company’s performance with industry best practices on 120+ criteria.
Finally, we engage with companies on an ad hoc basis if they appear to have been involved in
controversial business activities or in breach of international norms and standards.
The RobecoSAM Corporate Sustainability Assessment process can therefore be seen as a
combination of indirect engagement at the systemic level and direct engagement activities
through active dialogues with companies which aim to improve specific aspects of corporate
behaviour.
1c Describe/List your SRI products and the specific resources allocated to your SRI activities.
Briefly describe the SRI fund range (number, assets under management, strategies, ...)
Describe/Detail the resources allocated by the fund management company (organization, ESG
research internal/external, dedicated portfolio management team, …) and indicate where this
information is available.
Sustainability Solutions
The firm’s offering comprises asset management, indices and private equity. Its asset
management capabilities include a broad range of global equity, regional, quant, and theme7
based strategies in the areas of Water, Smart Energy, Smart Materials, Healthy Living and
Agribusiness. Every strategy is managed by a dedicated lead portfolio manager who has full
decision making responsibility. Portfolio managers directly report to the Head Public Equities,
who is a member of RobecoSAM's Executive Committee. In addition to the funds,
RobecoSAM offers large institutional investors customized investment solutions and mandates
that incorporate sustainability criteria, including optimized, active and unconstrained
strategies.
The RobecoSAM Private Equity offers core and satellite investment capabilities with a focus
on mainstream and resource efficiency to institutional investors. RobecoSAM's Private Equity
Resource Efficiency capability is focused on capitalizing on the growing supply-demand
imbalance of natural resources. Resource efficient solutions address these issues and are
expected to be of vital importance to sustain global growth patterns. Resource Efficiency
encompasses a number of key industry sectors such as energy, industrials, water,
agribusiness and materials.
Strategy AuM
Fund name
Inception date (EUR million)
as of June 2015
Core Equity Funds
RobecoSAM Sustainable Global Equity Fund
03.05.2004
266
RobecoSAM Sustainable European Equities Fund
28.05.1991
RobecoSAM Global Small Cap Equities Fund
30.03.2007*
520
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Theme-based Equity Funds
RobecoSAM Sustainable Water Fund
28.09.2001
895
RobecoSAM Smart Energy Fund
23.09.2003
RobecoSAM Smart Materials Fund
02.10.2006
RobecoSAM Sustainable Healthy Living Fund
30.03.2007
RobecoSAM Sustainable Agribusiness Equities Fund
29.08.2008
248
238
286
147
01.06.2014
106
Quant
RobecoSAM Quant Sustainable Global Equities
Private Equity
Resource Efficiency Funds
Mainstream Funds
703
974
*Change of name as of 15.12.2014 (formerly RobecoSAM Sustainable Climate Fund)
In partnership with S&P Dow Jones Indices, RobecoSAM has developed and licenses the
globally recognized Dow Jones Sustainability Indices (DJSI), launched in September of 1999.
The DJSI family has since grown to include global, European, Eurozone, North American, US,
Asia-Pacific Emerging Markets benchmarks and a Diversified index family.
Furthermore, RobecoSAM is the centre of expertise for Private Equity within the Robeco
group. The Private Equity team consists of 3 investment professionals, 2 senior associates,
and 1 research analyst.
Sustainability Research
RobecoSAM’s Sustainability research is generated internally, and is based on RobecoSAM’s
annual Corporate Sustainability Assessment and the annual reports published by the
companies covered by RobecoSAM’s Research. Over the last 15 years, RobecoSAM has
identified and developed an extensive set of economic, environmental, and social assessment
criteria in order to measure a company’s sustainability performance. These criteria are built
into the questionnaire, which quantifies the sustainability performance of a company by
assigning a corporate sustainability score based on predefined weights for each of the criteria.
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The data we collect is stored in RobecoSAM’s proprietary Sustainability Information
Management System (SIMS), where it is converted into investment relevant insights.
Information used as inputs for the RobecoSAM Corporate Sustainability Assessment includes,
among others, environmental, social and economic (raw) data provided by the companies,
supporting documentation such as internal corporate strategies and policies, position papers,
publicly available sustainability, environmental, or occupational health and safety reports.
Internal Research Capabilities
RobecoSAM’s Research team consists of a multi-disciplinary and multi-cultural team of 7
equity analysts and 10 SI analysts with a broad range of backgrounds in the fields of business,
natural science, finance and social science. The analysts provide sector, company and
sustainability research for the full range of RobecoSAM’s investment strategies. Each analyst
possesses several years of experience in either sustainability-related areas or traditional
financial analysis, contributing to the firm’s overall research efforts.
Each RobecoSAM analyst meets on average at least 50 companies per year. In addition to
discussing financial performance issues, analysts also typically steer their conversations with
company management towards long-term sustainability topics related to environmental and
social issues in order to inform their view of a company’s risk-return profile.
Our strong focus on primary research with respect to under-researched topics related to
environmental, social and financial considerations enables RobecoSAM research to maintain
an information advantage over mainstream investors who do not consider these factors in
their investment process.
Fund holdings are published in RobecoSAM’s annual and semi-annual reports. These can be
downloaded at:
Funds | RobecoSAM
Publications regarding the product capabilities such as prospectus, factsheets and fund
brochures can be found under: http://www.robecosam.com/en/professionals/strategiesservices/index.jsp
1d Describe the content, frequency and resources allocated/used by the fund management company
to inform investors about the ESG criteria taken into account.
The RobecoSAM Yearbook can be found in digital form and in form to download under:
The Sustainability Yearbook | RobecoSAM
RobecoSAM studies and white papers, Foresight, Insight and Flash can be found under:
Sustainability insights | RobecoSAM
The RobecoSAM Newsletter is on a subscription basis:
Newsletter | RobecoSAM
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The SRI Fund(s)
1e Provide the name of the fund(s) to which this Code applies and its (their) main characteristics
Describe the main characteristics of the fund(s): geographical focus, asset class, SRI strategy used
(use the classification provided by Eurosif/EFAMA).
As mentioned above, RobecoSAM exclusively focuses on sustainability investing. Therefore,
all RobecoSAM strategies are managed according to the RobecoSAM sustainability principles.
The RobecoSAM strategies are long-only equity products.
Core strategies (regional):
The core strategies invest in companies in the MSCI World, MSCI World Small Cap, and the
MSCI Europe that have received a sustainability score (based on the RobecoSAM
Sustainability Assessment), plus listed companies outside the respective index that are
covered by RobecoSAM's sustainability theme strategies:
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RobecoSAM Sustainable Global Equities (LU0188782162)
RobecoSAM Sustainable European Equities (LU0187077218)
RobecoSAM Quant Sustainable Global Equities (LU1036586912)
RobecoSAM Global Small Cap Equities (LU0280770172)
Theme strategies:
Long-term sustainability related trends such as demographic change, resource scarcity,
pollution, and climate change shape the competitive landscape in which companies operate.
RobecoSAM's theme-based strategies invest in listed companies worldwide that anticipate
and respond to challenges in the areas of Water, Smart Energy, Smart Materials, Healthy
Living and Agribusiness:
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RobecoSAM Sustainable Water Fund (LU0133061175)
RobecoSAM Smart Energy Fund (LU0175571735)
RobecoSAM Smart Materials Fund (LU0175575991)
RobecoSAM Sustainable Healthy Living Fund (LU0280770768)
RobecoSAM Sustainable Agribusiness Equities Fund (LU0374106754)
1f What is (are) this (these) fund(s) trying to achieve through taking into account ESG criteria?
For instance, financing a specific sector, reducing risks, support better CSR practices, develop new
value creation opportunities, other objectives.
Creating shareholder value through sustainability investing
RobecoSAM’s overall corporate philosophy, product strategy and focus are based on its aim to
provide a compelling range of sustainability products to its clients. By leveraging the
comprehensive data collected by the RobecoSAM Corporate Sustainability Assessment, we are
ideally positioned to identify companies leading their peers in terms of sustainability and, thus,
shareholder value creation.
RobecoSAM’s fundamental investment philosophy is based on the premise that overarching
sustainability megatrends such as demographic change, resource scarcity, pollution, and climate
change shape the competitive landscape in which companies operate and that the financial
markets are the most powerful transmission mechanism to promote sustainable business
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practices. We believe that material, non-financial information fully integrated with traditional
financial data gives investors an information edge.
We believe that sustainability is all about a company’s capacity to prosper by anticipating and
managing current and future economic, environmental and social opportunities and risks by
focusing on quality, innovation and productivity to create a competitive advantage – and most
importantly, long-term stakeholder value. We believe that these objectives focus companies on
activities that positively affect their free cash flow, return on invested capital and weighted
average cost of capital.
RobecoSAM’s in-house empirical analysis demonstrates that sustainability investing delivers
alpha to investors. Please consider our white paper "Alpha from Sustainability":
http://www.robecosam.com/images/Alpha_from_Sustainability_06_2014.pdf
Section 2. Approach to ESG Evaluation of Companies
2a What fundamental principles underlie the ESG research methodology?
Describe the principles, standards or norms on which the ESG analysis is based for each of the
environmental, social/societal and governance dimensions. Include brief comments about how
stakeholders are consulted, as appropriate.
Economic, Environmental and Social Criteria
Sustainability is the guiding principle of development “that meet the needs of the present without
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compromising the ability of future generations to meet their own needs.” Its central element is a
future-oriented perspective that incorporates economic, environmental, and social considerations into
business decisions. Factors such as good corporate governance practices, ethical behaviour, human
capital management, environmental policies, and risk and crisis management are crucial contributors
to the long-term success of a company.
Similarly, Sustainability Investing is a long-term investment approach that integrates economic,
environmental, and social criteria into the selection and retention of investments.
Our conviction is that sustainability trends such as climate change, resource efficiency, or
demographics have an impact on the environment in which companies compete, and their response to
such challenges determines their ability to create shareholder value. The impact of these sustainability
factors and trends on companies’ long-term business and financial performance is under-estimated
and under-researched by investors, resulting in market inefficiencies, which RobecoSAM is well
positioned to exploit.
At the corporate level, sustainability is a future-oriented approach in which companies incorporate
economic, environmental, and social considerations into their business decisions. Based on the global
trend analysis, research identifies factors such as corporate governance practices, human capital
management, environmental policies, and risk and crisis management that have a material impact on
the long-term success of a company. Companies that are better at managing corporate sustainability
risks than their peers are well-positioned to profit in the long run.
By analysing the sustainability profile of companies and integrating it into traditional financial analysis,
RobecoSAM gains additional insights that facilitate the selection of stocks offering the potential for
attractive long-term returns, while investing in responsible companies.
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Brundtland Commission, Our Common Future, 1987
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Media & Stakeholder Analysis
As part of its annual Corporate Sustainability Assessment, RobecoSAM conducts an ongoing
monitoring of companies that have been selected as members of the eligible investment universe for
its funds, or as components of the Dow Jones Sustainability Indices. This monitoring process consists
of a Media & Stakeholder Analysis, which is based on automated media screens, and frequent
interactions with key stakeholders such as NGOs and consumer organizations. Companies are
monitored on an ongoing basis to verify their involvement in, and the management of critical
environmental, economic and social crisis situations that can have a damaging effect on their
reputation and core business. In addition, the consistency and quality of a company’s behaviour,
response, and management of such situations is reviewed in line with its stated principles and policies.
The Media & Stakeholder Analysis can lead to the downgrading of a company’s sustainability score,
which may affect its overall fair valuation score.
Examples of critical issues identified and reviewed through the monitoring process include:
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Commercial practices; e.g. tax fraud, money laundering, antitrust, balance sheet fraud, and
corruption cases.
Human rights abuses; e.g. cases involving discrimination, forced resettlements, child labour and
discrimination of indigenous people.
Layoffs or workforce conflicts; e.g. extensive layoffs and strikes.
Catastrophic events or accidents: e.g., fatalities, workplace safety issues, technical failures,
ecological disasters and product recalls.
2b What internal and external resources are used to carry out this research?
Describe the general information used to carry out the ESG research: internal analysis, ESG rating
agencies, other external sources of information.
Information Source
RobecoSAM’s Sustainability research is generated internally, and is based on RobecoSAM’s annual
Corporate Sustainability Assessment and the annual reports published by the companies covered by
RobecoSAM Research.
Over the last 16 years, RobecoSAM has identified and developed an extensive set of economic,
environmental, and social assessment criteria in order to measure a company’s sustainability
performance. These criteria are built into the questionnaire, which quantifies the sustainability
performance of a company by assigning a corporate sustainability score based on predefined weights
for each of the criteria. The data we collect is stored in RobecoSAM’s proprietary Sustainability
Information Management System (SIMS), where it is converted into investment relevant insights.
Information used as inputs for the RobecoSAM Corporate Sustainability Assessment includes, among
others, environmental, social and economic (raw) data provided by the companies, supporting
documentation such as internal corporate strategies and policies, position papers, publicly available
sustainability, environmental, or occupational health and safety reports.
Media & Stakeholder Analysis
The Media & Stakeholder Analysis (MSA), that represents an integrated part of the RobecoSAM
Corporate Sustainability Assessment, is based on information, currently provided by environmental
and social dynamic data supplier RepRisk.
12
Primary Research
Each RobecoSAM analyst meets on average at least 50 companies per year. In addition to discussing
financial performance issues, analysts also typically steer their conversations with company
management towards long-term sustainability topics related to environmental and social issues in
order to inform their view of a company’s risk-return profile.
Our strong focus on primary research with respect to under-researched topics related to
environmental, social and financial considerations enables RobecoSAM research to maintain an
information advantage over mainstream investors who do not consider these factors in their
investment process.
2c Which ESG analysis criteria are used?
Indicate what the main criteria for each of the environmental, social/societal and governance
dimensions are. Specify if these criteria differ according to sectors, the geographical zones, the type of
company, … If appropriate, provide an example.
Sustainability Analysis Criteria
Based on a global trend analysis, RobecoSAM has identified underlying economic, environmental and
social megatrends such as aging infrastructure, access to capital, the scarcity of natural resources,
and climate change, coupled with population growth, urbanization, and an aging population. Such
trends represent opportunities and risks for companies to develop and market innovative products and
services that address these long-term sustainability challenges. Those who can successfully anticipate
to these trends are well-positioned to outperform in the long run.
We use a “best in class” approach, as through our annual Corporate Sustainability Assessment we
identify the most sustainable companies in each of the 59 sectors. The sustainability scores, however,
are integrated into the valuation model. Companies with a superior sustainability score will have a
positive impact on their total valuation analysis, because we believe that more sustainable companies
are better positioned to generate long term shareholder value. Sustainability laggards will have a
negative impact on their overall valuation, as they are more likely to be underperformers in terms of
their ability to maintain and grow earnings.
Based on these trends, RobecoSAM has defined over 120 general and industry –specific criteria,
across 59 different industries, which form the basis of the annual RobecoSAM Corporate Sustainability
Assessment. All criteria are based on widely accepted standards, best practices and audit procedures
as well as extensive input from industry specialists and consultants. RobecoSAM’s annual assessment
is also used as the basis for the construction and annual review of the Dow Jones Sustainability
Indices (DJSI).
General criteria include standard management practices and performance measures applicable to all
industries, such as corporate governance, environmental management and performance, human
rights, supply chain management, risk and crisis management and labour practices. The industry
specific criteria account for the majority of the assessment.
Industry-specific criteria take into account the challenges and trends affecting specific industries.
They reflect the economic, environmental and social forces driving the sustainability performance of a
particular industry.
The assessment is divided into three distinct sections, covering the economic, environmental and
social dimensions. A selection of criteria used in the Assessment is outlined below.
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RobecoSAM’s Industry-based analysis
RobecoSAM’s industry-based analysis
Over 90 cross- and industry-specific
criteria and dimension weights
Industry
Specific
Criteria
> 50%
General
Criteria
< 50%
33%
33%
33%
Economic Dimension
• Corporate Governance
• Risk & Crisis Management
• Codes of Conduct & Corruption
• Customer Relationship Management
• Supply Chain Management
• Innovation Management
Environmental Dimension
• Environmental Reporting
• Climate Strategy
• Operational Eco-Efficiency
• Product Stewardship
• Environmental Policy & Management Systems
Social Dimension
• Social Reporting
• Labor Practice Indicators
• Human Capital Management
• Talent Attraction & Retention
• Corporate Citizenship & Philanthropy
• Stakeholder Engagement
5
2d What is your ESG analysis and evaluation methodology (how the investment universe is built,
rating system, …)?
Describe the ESG evaluation/rating system and how it is built by explaining how the various ESG
criteria are articulated. If appropriate, provide an example.
RobecoSAM Sustainability Score
RobecoSAM’s methodology is based on the application of economic, social and environmental criteria
to assess the opportunities and risks deriving from these three dimensions.
Over the last 16 years, RobecoSAM has identified an extensive set of criteria which are used to
measure a company’s sustainability performance. These criteria are built into an extensive industryspecific annual questionnaire, the RobecoSAM’s Corporate Sustainability Assessment. It is used to
obtain insights into each company’s response to a broad range of general and industry specific
sustainability challenges. The information provided by a specific company is quantified based on
predefined weights for each of the criteria, and results in a Sustainability Score – which is also used as
a base for the construction of the Dow Jones Sustainability Indices.
Additional sources of information used as an input for the sustainability assessment include supporting
documentation such as sustainability reports, environmental reports, and health and safety measures
provided by the companies, as well as personal contacts between the analysts and companies. In
addition, analysts review media, press releases, articles, and stakeholder commentary written about a
company over the past twelve months. This information is integrated into the sustainability analysis,
and also serves as a basis for possible downgrading of a company’s sustainability score.
Information provided in the questionnaire is verified. Verification includes crosschecking answers with
documentation provided by the company, verifying a company’s track record and incidents and crisis
management with media and stakeholder reports and, if necessary, direct interaction and clarification
with the company.
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Industry-Specific Assessment
RobecoSAM analyses the corporate sustainability information collected by focusing on the company’s
position within its industry and chosen markets, its degree of preparedness for the opportunities and
challenges arising from global sustainability trends, and the degree to which its business practices
align management interests with those of the shareholders. Companies that are better at seizing
opportunities and managing risks than their industry peers are well-positioned to profit in the long run.
Thus, those companies that embrace corporate sustainability as a key source of competitive
advantage and implement sustainable practices to mitigate risks and seize opportunities are more
likely to receive a higher sustainability score compared to their peers.
The score is then incorporated into the RobecoSAM Valuation Model, because RobecoSAM believes
that management decisions regarding sustainability factors pertaining to the environment, social
considerations and corporate governance have an impact on value drivers such as a company’s
resource efficiency, workforce motivation, innovation potential, and reputation with stakeholders. The
positive or negative impact of sustainable (or unsustainable) management decisions can then be
measured in the company’s financials such as revenues, costs or reinvestment rates. Companies with
a high sustainability score will enjoy a higher return on invested capital and/or a lower cost of capital,
thus receiving a higher RobecoSAM Fair Value score.
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2e How frequently is the ESG evaluation reviewed?
Please briefly explain the methodology update process and who is involved. If appropriate, explain if
the methodology has changed in the past 12 months and the nature of the key changes.
RobecoSAM continuously makes enhancements to its research methodology in order to identify and
interpret corporate sustainability information that has a material impact on long-term shareholder value
creation. Such enhancements are aligned with our mission to leverage our understanding of
sustainability issues in making better-informed investment decisions. Each SI research analyst is
responsible for reviewing the sector-specific portion of the questionnaire for his or her area of
coverage, and amending or including new questions for inclusion in the questionnaire, based on
industry-specific sustainability trends, risks, and challenges affecting his or her specific research
sector.
We focus on ESG issues that are material to the companies' respective industries, long-term in nature,
and that are under-researched in traditional financial analysis. As sustainability becomes more
embedded in corporate practices, RobecoSAM regularly updates the questionnaire to capture new
sustainability trends that are likely to have an impact on the companies' competitive landscape, and to
continuously challenge companies to improve their policies and processes.
The questionnaire for the annual RobecoSAM Corporate Sustainability Assessment is reviewed by
RobecoSAM Research each year. Approximately 20-30% of the questions are yearly renewed and
optimized. In the 2014 assessment, for instance, new questions on Tax Strategy and responsible
taxation policies were introduced and increased focus were put on how companies systematically are
measuring the return on investment for their human capital development strategies and for the 2015
assessment, the section on Corporate Governance was extended to cover additional questions about
long-term remuneration and sustainability governance. By doing so, we hope to raise awareness and
eventually improve corporate performance in these areas. In addition to this, many other criteria were
reviewed to ensure consistency, clarity and materiality of the questions asked.
Other enhancements to our SI research process include a Materiality Analysis on the most relevant
sustainability factors for the GICS industries that RobecoSAM analyses, and a new format for sharing
companies’ Sustainability Profiles with other investment professional of the group.
Because the Corporate Sustainability Assessment also forms the basis for the Dow Jones
Sustainability Indices (DJSI), key criteria changes are published in the form of a Review Presentation,
which can be downloaded:
Annual Review DJSI
Additionally, we publish an annual RobecoSAM Sustainability Yearbook, which includes some of the
major changes to the RobecoSAM Corporate Sustainability Assessment. A copy of the yearbook can
be found on our webpage:
RobecoSAM Sustainability Yearbook
To ensure quality and objectivity of the RobecoSAM Corporate Sustainability Assessment, an external
review by Deloitte is completed. The review monitors and maintains the accuracy of the assessment
procedures and results. The Assurance Statement can be downloaded as a PDF file at:
Deloitte Assurance Report
16
Section 3. Fund Management Process
3a How do you take into account ESG criteria when defining the universe of eligible investments?
If appropriate, describe the eligibility threshold and the resulting level of selectivity.
Long-term Sustainability Drivers
Based on its long-term experience and in-house sustainability expertise, RobecoSAM conducts a
global trend analysis, which serves as the framework for defining sustainability drivers such as
Demographics, Resource Scarcity, and Pollution.
Investment Universe
The investment universe for the RobecoSAM Core Strategies consists of all stocks in the MSCI
World All Countries / MSCI World Small Cap / MSCI Europe that have received an above average
sustainability score based on the RobecoSAM Corporate Sustainability Assessment, plus any
companies with an exposure to one of the RobecoSAM Sustainability Themes: Water, Clean Energy,
Materials, Healthy Living and Agribusiness.
To demonstrate, we provide the selectivity criteria of the investment universe below for our
Sustainable Global Equities strategy:
Starting Investment Universe
The starting investment universe consists of approximately 3'000 stocks: It encompasses 1'700
companies of the MSCI World Index plus 1'300 companies outside the index that are covered by
RobecoSAM's sustainability theme strategies. By broadening the Global Equity investable universe to
include small and mid cap companies whose business activities directly address long term
sustainability megatrends such as demographic change, resource scarcity, pollution and climate
change, we can capture additional alpha opportunities.
The starting universe is then screened for stocks above USD 1 billion market cap, resulting in an
investment universe of approximately 2'000 companies.
80% of the investment universe consists of large caps which cover 95% of the market capitalization of
the MSCI World. 20% of the investment universe consists of mid and small capitalization stocks which
are "sustainability pure players", i.e. companies primarily focused on providing solutions to specific
sustainability challenges.
17
Investment Universe
To identify the most attractive stocks RobecoSAM selects around 200 companies that will be modeled
in detail. The selection of competitive companies, where RobecoSAM anticipates high value creation,
is done at a sub-industry level.
The analysts conduct a peer group analysis by performing a simplified valuation analysis, which is a
simplification of the detailed RobecoSAM valuation model explained further on. The focus is on
identifying companies that are able to show long term profitability with an attractive valuation. The
simplified valuation analysis is based on a Continuous Growth Economic Profit Model that results in a
direct relationship between the ratio of the Return on Invested Capital (long term profitability) and the
Enterprise Value to the Invested Capital (valuation). The analyst compares the constant growth rate
and the Return on Invested Capital implied in the current market price with his first estimate for a
potential long-term growth rate and Return on Invested Capital. If his estimate is significantly higher,
the company might potentially be undervalued and the analyst would start a detailed financial analysis
in order to determine the true economic value of the company. Besides the simplified valuation
analysis, the analyst also evaluates balance sheet ratios and reputational risks via the RepRisk tool.
This part of the process is not mechanical, i.e. rule-based, but analysts follow a disciplined approach,
and common guidelines that are in line with the broader investment philosophy of the fund. Feedback
of the whole investment team is generated by presenting the opportunity in the team meeting. (No
deeper analysis is done on companies identified as having excessive valuation or red flags in terms of
future profitability.)
18
For the RobecoSAM Theme Strategies, the analysts define the universe by identifying companies
that offer products and services addressing the sustainability challenges related to the respective
theme. In order to be included in a thematic investment universe, a company should derive at least
20% of its current revenues and more than 50% of the anticipated future revenues from activities
related to the respective investment strategy. At a portfolio level, at least 70% of the weighted
company revenues should derive from activities related to the strategy. (At a portfolio level for the
RobecoSAM Sustainable Water Strategy: min. 50% of the revenues.)
3b How do you take ESG criteria into account into the portfolio construction?
Describe how you link ESG selection with the financial analysis or with portfolio management. More
precisely, describe how the results of the analysis of each of the dimensions (E, S and G) are
integrated into the investment / divestment process. If applicable, state where you provide
information on divestments occurred in the past year on the basis of ESG criteria? If appropriate,
explain how potential ESG weightings are defined and describe your treatment of companies that are
not subjected to an ESG analysis.
The integration of sustainability criteria into the financial valuation of companies is the cornerstone of
RobecoSAM’s research and investment philosophy. The firm is worldwide one of the market leaders in
terms of integrating financial and sustainability insights into a structured investment process.
Interpreting and Quantifying Sustainability Data
RobecoSAM’s expertise lies in its ability to frame sustainability risks and opportunities, translate them
into a proven corporate sustainability assessment methodology, and interpret the sustainability
information we receive before incorporating it into our valuation model. The methodology focuses on
material, under-researched issues that have an impact on companies’ ability to create shareholder
value. The RobecoSAM Corporate Sustainability Assessment results in a sustainability score reflecting
the companies’ sustainability performance against their industry peers. Companies that embrace
corporate sustainability as a key source of competitive advantage and implement sustainable practices
to mitigate risks and seize opportunities are more likely to receive a higher sustainability score.
Integration
RobecoSAM’s Valuation Model takes into account the company’s sustainability score as an input into
the valuation analysis - the positive or negative impact of sustainable (or unsustainable) management
decisions can then be measured in the company’s financials such as revenues, costs or reinvestment
rates. Companies with a high sustainability score will enjoy a higher return on invested capital and/or a
lower cost of capital, thus receiving a higher RobecoSAM Fair Value.
Portfolio Construction
The identified investment opportunities are individually weighted in order to constitute a well-diversified
portfolio of investment holdings characterized by attractive fundamental valuation that considers the
corporate sustainability profiles of the companies.
Valuation is the main driver of long-term investment returns. By comparing the fair value with the
current share price, the price-value discrepancy is determined, indicating the current attractiveness of
a stock. In general, stocks with a high price-value discrepancy are bought. Stocks with a low price19
value discrepancy are sold. The higher the price-value discrepancy of a stock, the higher weighting it
receives in the portfolio.
The stock selection process results in the best portfolio constituents by combining solid fundamental
bottom-up stock analysis with market expectations.
A media & stakeholder analysis (MSA) is conducted continuously throughout the year to identify
companies in the investment universe that may have been involved in critical environmental, economic
and social crisis situations that can have a damaging effect on their reputation and core business, and
to evaluate their response and management of such situations. In addition, the consistency and quality
of a company’s behavior, response, and management of such situations is reviewed vis-à-vis its stated
principles and policies. Involvement cases can lead to a downgrading of the sustainability score, which
will have an impact on the total valuation of the specific stock.
Please find a listing below of the recent divestments over the last 12 months made based on ESG
Criteria:

Effective 6 October 2015, Volkswagen AG (VW) was removed from the Dow Jones
Sustainability Indices (DJSI). A review of VW's standing in the DJSI was prompted by the
recent revelations of manipulated emissions tests.

Effective 3 August 2015, Toshiba Corporation was removed from the Dow Jones Sustainability
World Index (DJSI World). A review of Toshiba's standing in the DJSI World was prompted by
the recent disclosure of a long-term fraudulent accounting scandal at the company and the
reported widespread involvement of senior management in the affair.

Effective March 23, 2015, Petroleo Brasileiro SA (Petrobras) was removed from the Dow
Jones Sustainability World Index (DJSI World). Recent disclosure of fraud and corruption
allegations at the Company and its respective communication policy towards investors
prompted a review of Petrobras' standing in the DJSI World.
3c Does (do) the fund(s) have a specific ESG engagement policy?
Please explain what you mean by engagement. Describe how you select the companies/themes for
engagement activities and the impact on the portfolio management of the fund(s). Who undertakes
engagement on behalf of the fund (internal and/or service providers)?
The RobecoSAM Corporate Sustainability Assessment as an Engagement Platform
We consider the annual RobecoSAM Corporate Sustainability Assessment, which many companies
use as a road map to implementing and improving their corporate sustainability practices, to be our
principal platform for engagement.
At a strategic level, RobecoSAM’s overarching engagement goal is to raise the bar for companies in
terms of their sustainability performance and to send them a strong signal that long-term investors are
interested in sustainability factors as a source of risks and opportunities.
At the tactical level, we implement this goal by communicating explicitly the sustainability issues that
we believe can have an impact on corporate financial performance of companies in a given sector
through our industry-specific annual questionnaires (RobecoSAM Corporate Sustainability
Assessment).
20
Sustainability Benchmarking and Improvement Incentives
The RobecoSAM Corporate Sustainability Assessment is a unique approach as it serves as a platform
for ongoing engagement that is structured, rigorous, and has a broad reach. Each sustainability issue
included in our assessment represents an engagement objective in the sense that we seek to
encourage companies to improve their performance in that area. Each year our questionnaire reaches
the 3300 largest companies, with approximately 860 companies actively participating in the
assessment. Participating companies receive a benchmarking report that compares their sustainability
performance to that of their industry peers, as well as industry best practices on over 20 criteria. This
benchmarking report is used as the basis for follow up discussions between RobecoSAM and
company management.
Each year we also enter into a structured one-on-one dialogue with approximately 150-200 companies
interested in improving their sustainability performance. By progressively intensifying our dialogue with
companies that demonstrate a strong interest in improving their performance, we maximize the impact
of our engagement efforts. Ad-hoc engagement is conducted when controversial business activities or
a breach of international norms and standards occur.
We believe that our engagement approach, based on the annual RobecoSAM Corporate Sustainability
Assessment, opens a direct communication channel with senior management, and is an effective way
to maintain an ongoing dialogue with change agents within the companies. Our approach is different
from more conventional engagement strategies in that engaging with sustainability leaders, as well as
companies that aspire to become sustainability leaders, sets high standards for their industry peers,
and has an indirect impact on the laggards by putting competitive forces into play.
Many firms use the peer benchmarking feedback report from our assessment to identify gaps and
initiate improvements in their business practices. Both financial and sustainability considerations
shape companies’ success in the long run. RobecoSAM’s integrated approach also helps highlighting
for management the importance of managing performance for the long run.
An increasing number of firms define inclusion in the DJSI as a corporate goal, as it allows them to
gain recognition for their sustainability performance, thus making them more attractive to investors.
This serves as an additional incentive for participating in the annual RobecoSAM Corporate
Sustainability Assessment.
3d Does (do) the fund(s) have a specific voting policy integrating ESG criteria?
As a signatory of the UN Principles for Responsible Investment (PRI), and in accordance with UN
PRI Principle 2 – “We will be active owners and incorporate ESG issues into our ownership
policies and practices,” RobecoSAM has always recognized the value of active ownership and
engagement. However, as a firm whose key strengths lie in sustainability research, RobecoSAM
has historically focused primarily on indirect and direct engagement with companies within the
framework of the annual RobecoSAM Corporate Sustainability Assessment. We view this as the
most effective means for leveraging our in-house resources and expertise to achieve significant
results in an efficient way.
As the centre of expertise for Robeco, RobecoSAM took over the responsibility for the 9 person
strong team on Governance and Active Ownership of Robeco. This group of voting and
engagement specialists acts on behalf of RobecoSAM when engaging with companies on
sustainability topics.
21
Voting Policy
RobecoSAM buys shares in companies, thereby making it a co-owner of these companies. Each
share entitles the owner to vote at shareholders' meetings. The execution of voting rights is an
important component of a well-functioning corporate-governance system. RobecoSAM takes its
responsibility by voting at shareholder meetings worldwide. By making active use of this right, we
can increase control over the company’s management and improve the company’s sustainability,
which may eventually contribute to higher shareholder value.
RobecoSAM AG bases its voting policy on the principles of the International Corporate
Governance Network (ICGN). This is an internationally recognized code for good corporate
governance, the basic principles of which allow sufficient scope for assessing companies
according to local standards. The national laws and codes of conduct for corporate governance,
such as the Nederland’s Corporate Governance Code in the Netherlands, which was anchored in
legislation in 2009, are leading in the assessment of companies. Circumstances specific to
individual companies also play a role in this.
Some of the ICGN Corporate Governance Principles are also covered by the annual RobecoSAM
Corporate Sustainability Assessment, which serves as the basis for engagement through intensive
dialogues with companies on their ESG performance.
RobecoSAM votes for all investment funds for which the costs of voting are not expected to have
a noticeable, negative impact on investment results. Each year RobecoSAM AG determines for
which of its investment funds it is cost effective to exercise its proxy voting rights. We can also
offer proxy voting for clients with segregated mandates who wish to incorporate proxy voting in
their investment strategies.
To avoid unnecessary costs and to increase the efficiency of the voting services in the interests of
our clients, RobecoSAM uses an electronic voting platform to cast votes. This platform is used to
vote at most meetings, but in a few cases RobecoSAM attends the annual general meeting (AGM)
to cast votes. Electronic voting is an efficient way of voting by proxy.
From a cost perspective it is not efficient to conduct an extensive analysis on every specific issue
for every shareholders’ meeting in order to determine how to cast our vote. Therefore RobecoSAM
AG uses independent voting advice from Glass Lewis, an international proxy voting advisor. The
RobecoSAM Governance and Active Ownership team compares the specific voting advice with
RobecoSAM AG/Robeco’s corporate governance policy. In case of controversial or important
agenda items, the responsible portfolio manager at RobecoSAM AG is consulted to discuss the
vote. RobecoSAM AG is ultimately responsible for deciding on how to vote on each issue.
In a number of markets worldwide, shares are blocked for sale during a certain period of time if the
voting rights attached to the shares are executed. The blocking of shares limits the trading
possibilities of the portfolio managers and may, therefore, also harm the performance of the
investment portfolio. In such cases, RobecoSAM AG may determine that share blocking is
detrimental to investment performance, and will decide not to execute its voting rights because it is
not in the best interests of its clients.
In addition, in order to complement ICGN Voting Principle 1 “Sustainable Value Creation“ and 3
“Good citizenship, relations with stakeholders and the ethical business conduct” RobecoSAM AG
will support shareholder resolutions aimed at improving governance, social and environmental
performance of companies on a case-by-case basis.
Promoting Best Practices
RobecoSAM employs a unique approach to engagement by conducting a comprehensive annual
Corporate Sustainability Assessment to measure the sustainability performance of over 2000
companies. Our annual questionnaire acts as a tool to encourage improved disclosure on key
sustainability issues of interest to long-term investors and offers companies a blueprint of industry
best practices in the areas of sustainability and corporate responsibility.
22
As stated above, companies participating in the annual Corporate Sustainability Assessment
receive a benchmarking report from RobecoSAM showing their own sustainability scores against
their respective industry’s average and against the industry’s top score. This report provides the
company with insights into its strengths and areas for improvement in relation to its industry and
peers. These results trigger contacts with senior managers and members of the executive
management and board of directors. Many companies use RobecoSAM’s questionnaire as a guide
to understanding latest sustainability issues and best practices and to implementing these into
their strategic priorities and core business processes. Some companies even publicly disclose the
completed questionnaire.
The publication of the RobecoSAM screening methodology, criteria, and questions used to
measure a company's sustainability performance is a powerful vehicle used by RobecoSAM in
order to create awareness and competition encouraging the continuous improvement of corporate
sustainability. By actively engaging with stakeholders in public forums, industry-wide initiatives and
global standardizing efforts, RobecoSAM promotes excellence and best-practices in the
sustainability investment world.
For our private equity fund-of-funds, we are active members of advisory committees of the fund
managers we select, and sit on boards of companies in which we are directly invested. In all of
these activities we are highly sensitive to ESG issues and we will intervene if concerns arise.
RobecoSAM publishes its voting policy and voting reports on the website:
http://www.robecosam.com/en/professionals/strategies-services/activeownership-voting/index.jsp
3e Does (do) the fund(s) engage in securities lending activities?
If yes,
(i) is a policy to recall the securities in place in order to exercise the voting rights?
Yes, RobecoSAM recalls securities in securities lending in order to exercise voting rights.
(ii) does the counterparty selection process integrate ESG criteria?
The counterparty selection process does not integrate an ESG criteria. Securities lending between the
fund and the borrowers is processed via the agent SSB (State Street Bank) who is responsible for the
borrower selection, the collateral management, the asset auction and the operations. The activities of
the portfolio manager are not impacted by securities lending.
Listed below are collateral requirements and selection criteria:
•
State Street (SSB) as Custodial Lending Agent (assets custodied with State Street).
•
SSB will be responsible for selecting and monitoring borrowers according to GAM policy which
will promise diversification of risk through selection of multiple borrowers.
•
SSB will be responsible for the Collateral Management (bi-party with SSB or Tri-Party through
ext. Collateral Agent), t.b.d. during project phase.
•
SSB is a specialised first class securities lending agent which guarantees a secure setup with
highly standardised lending and collateral management processes.
•
SSB as Custodial Lending Agent will reflect additional advantages in terms of setting up
Operational- and IT connectivity, as well as Trading and Collateral facilities. Accordingly operational
risks will be reduced.
23
•
The collateral requirements are determined as follows: government bonds from G10 countries
with a margin of 5% over the value of the loaned securities.
•
Collateral is held separately with State Street Custody or through Tri-party arrangements.
•
Daily marking-to-market of the collateral positions.
•
SSB offers pre collateralization – collateral has to be delivered by the borrowers to SSB before
any securities are delivered by the funds to the borrowers.
•
Only borrowers which have been approved by SSB and GAM participate in the lending
program. The counterparty risk is therefore further mitigated by the diversification of borrowers and will
therefore not differ to the previous set up.
•
Additionally SSB offers an indemnification to the funds. In the case of a borrower default, SSB
will indemnify the funds for any shortfall in collateral.
•
GAM monitors and supervises the setup and the involved parties systematically and
independently, including the quality of the borrowers, the positions on loan, the collateral, and the
operational processes.
•
Tailor-made reporting according to the clients need.
3f Does (do) the fund(s) use derivative instruments?
If yes describe,
(i) their nature
(ii) the objective(s)
(iii) the potential limits in terms of exposure
(iv) if appropriate, their impact on the SRI quality of the fund
RobecoSAM's sustainability strategies may invest in derivative instruments such as options, futures,
currency forwards, etc. These instruments are primarily used for hedging purposes, the steering of
currency exposure and the short-term management of cash flows.
RobecoSAM’s internal guidelines permit investment in FX forwards and equity futures. All other
derivatives are currently not allowed. Where exposure is calculated by means of the market value of
positions, the positions on financial derivatives are converted into equivalent positions on the
underlying assets. Therefore, eligible derivatives exposure is in scope when calculating exposures
versus internal limits.
Derivative financial instrument within the fund structure have a general legal global limit to a maximum
of 100% of the fund’s assets. Although these instruments may be used, they are not a key component
of RobecoSAM’s investment approach.
3g Is a share of the fund(s) invested in unlisted entities pursuing strong social goals?
If yes, please provide a brief description of the objective(s) of this investment, in no more than one or
two sentences.
RobecoSAM's sustainability strategies exclusively invest in listed equities. In order to service
redemptions RobecoSAM takes into consideration the stocks' daily liquidity as well as the market
capitalization.
24
Section 4. Controls and ESG Reporting
4a What internal/external control procedures are in place to ensure the compliance of the portfolio
with the ESG rules defined in section 3 of this Code?
State who is carrying out the controls, their frequency and within which timeframe the fund(s) have to
comply should a breach be detected.
Once a company is selected as a member of the RobecoSAM investment universe or the DJSI, it is
continuously monitored for its corporate sustainability performance.
The objective of the monitoring process is to verify a company’s involvement and management of
critical environmental, economic and social crisis situations that can have a highly damaging effect on
its reputation and its core business. In addition, the consistency of a company’s behaviour and
management of crisis situations is reviewed in line with its stated principles and policies. The
Corporate Sustainability Monitoring can lead to the downgrading of a company’s sustainability score,
regardless of how well the company performed in the annual RobecoSAM Corporate Sustainability
Assessment.
When an issue or crisis situation arises, prior to making a decision to downgrade a company’s
sustainability score, RobecoSAM evaluates its impact and the Quality of Crisis Management:
Impact Evaluation
The extent of the crisis within the company, geographically and in the media is monitored. As
a result, the impact of the crisis on the reputation of the company and its core business is
assessed. If the impact evaluation of the crisis is far reaching, covered worldwide in the media
or is an important concern for the company, then the second step is an analysis of the quality
of the company’s crisis management.
Quality of Crisis Management
RobecoSAM monitors how well the company communicates, informs the public, acknowledges
responsibility, provides relief measures, involves relevant stakeholders and develops solutions
to preventing a similar crisis in the future. In this context, RobecoSAM Research weighs the
severity of the crisis in relation to the company’s reputation and quality of crisis management.
If the crisis management of an important issue is considered poor from a sustainability point of view, its
sustainability score can be downgraded. A downgrading of a company’s sustainability score may not
necessarily lead to an automatic exclusion from a fund. However, it may have a negative impact on the
overall stock valuation, making it less attractive for continued inclusion in the investment portfolio.
With regard to the DJSI, all decisions go through the Index Design Committee. If deemed appropriate,
the company can also be removed from the DJSI. RobecoSAM informs the affected companies about
their exclusion from the Index.
RobecoSAM does not apply minimum sustainability criteria to the stocks held in its investment funds.
Rather, RobecoSAM focuses on the integration of sustainability measures into the financial valuation
of a company. We use a “best in class” approach for the core strategies, as well as for the
sustainability indices, which are based on our annual Corporate Sustainability Assessment to identify
sustainability leaders within each industry. This is done deliberately to promote an overall development
in the direction of sustainable corporate behaviour, including for those companies in industries that are
typically labelled as unethical/unsustainable (Oil and gas, Alcohol, Tobacco, etc.).
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4b Please list all public media and documents used to inform investors about the SRI approach to the
fund, and include URLs. This should include a link to the detailed, no more than 6 months old, list of
holdings of the fund(s).
Product Publications
frequency
Format
Language
Factsheets
monthly
PDF and HTML
German, English, French,
Italian, Spanish, Dutch
Fund Brochure
ad hoc
Monthly Manager Report
monthly
Annual Report
yearly
PDF, HTML and
German, English, French,
print
Italian
PDF
English
PDF and HTML
German, English, French,
Italian, Spanish, Dutch
Semi-annual report
semi-
PDF and HTML
annual
Prospectus
ad hoc
German, English, French,
Italian, Spanish, Dutch
PDF and HTML
German, English, French,
Italian, Spanish, Dutch
Corporate Publications
frequency
Format
Language
Sustainability Yearbook
yearly
PDF, HTML and
English
print
RobecoSAM Monthly Newsletter
monthly
HTML
German, English
Sustainability Studies
ad hoc
PDF, HTML and
German, English
/ White
Papers
print
RobecoSAM Foresight
monthly
HTML and PDF
German, English
RobecoSAM Insight
3-4
HTML and PDF
German, English
times
per year
Publications regarding the product capabilities such as prospectus, factsheets, holdings and
brochures for a specific fund can be accessed via the RobecoSAM webpage. Chose a strategy, and
click on the respective link in the menu “Learn more”.
 Holdings can be accessed directly under this menu.
Factsheets and other legal publications such as annual reports and prospectus: The following link
leads to the online platforms of the respective legal Management Company,
http://www.robeco.com/en/professionals/products/index.jsp, where the documents can be downloaded
after a search for fund name.
The RobecoSAM Yearbook can be found in digital form and in form to download on the RobecoSAM
Webpage under “Sustainability Insights”:
http://www.robecosam.com/en/sustainability-insights/library/the-sustainability-yearbook.jsp
RobecoSAM studies and white papers, Foresight, Insight and Flash can be found under “Sustainability
Insights”:
http://www.robecosam.com/en/sustainability-insights/index.jsp
The RobecoSAM Newsletter is on a subscription basis. The registration form can be filled in online:
http://www.robecosam.com/en/sustainability-insights/library/newsletter.jsp
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Additional
If applicable, specify what the amount of donations and the percentage of management fees that the
fund gave to charities in the last year.
The fund does not donate via the management charge.
_______________________________
COMMITMENT FROM EUROSIF AND THE NATIONAL SUSTAINABLE INVESTMENT FORUMS




Eurosif is responsible for maintaining and publicising the Transparency Code.
Eurosif promotes received responses to the Code on its website.
Eurosif maintains a “transparent” logo that is awarded to those funds complying with
the Code and whose answers have been sent to Eurosif. Complying funds can use this
logo in their marketing collateral, in accordance with the Logo Specifications Manual
(see. www.eurosif.org) and provided the Code is up to date.
Eurosif commits to reviewing the Code. The process for reviewing the Code will be
open and inclusive. European SRI Transparency Code
ABOUT EUROSIF
The European Sustainable Investment Forum (Eurosif) is the leading European membership
association whose mission is to develop sustainability through European financial markets. Eurosif
works as a non-for-profit partnership of the national Europe-based national Sustainable Investment
Forums (SIFs) with the support and involvement of Member Affiliates.
Eurosif Member Affiliates include a range of organisations covering the value chain of the sustainable
investment industry, from institutional investors, asset managers to financial services providers, ESG
analysis firms, academic institutes and NGOs.
Eurosif speaks authoritatively and broadly on SRI (sustainable and responsible investment) issues.
The main activities of Eurosif are public policy, research and creating platforms for nurturing
sustainable investing best practices. For more details, please see www.eurosif.org.
National sustainable investment forums in Europe to date include:








Dansif, Denmark
Finsif, Finland
Forum Nachaltige Geldanlagen* (FNG) e.V., Austria, Germany Liechtenstein and
Switzerland
Forum per la Finanza Sostenibile*(FFS), Italy
Forum pour l’Investissement Responsable* (FIR), France
Norsif, Norway
Spainsif*, Spain
Swesif*, Sweden
27


UK Sustainable Investment and Finance Association* (UKSIF), UK
Vereniging van Beleggers voor Duurzame Ontwikkeling* (VBDO), the Netherlands
*Member of Eurosif
For further information on Eurosif or more details on the European SRI Transparency Code, please
look at our website, www.eurosif.org and contact Eurosif at +32 (0)2 274 14 35 or by email at
contact@eurosif.org.
Eurosif A.I.S.B.L.
331, rue du Progrès, 1030 Brussels, Belgium
Tel.: +32 (0)2 274 14 35
Disclaimer – Eurosif does not accept responsibility or legal liability for errors, incomplete or
misleading information provided by signatories in their responses to the European SRI Transparency
Code. Eurosif does not provide any financial advice nor endorse any specific funds, organizations or
individuals.
28