Integration: Non-financial parameters are also taken into account
When Cadelam, the Group's fund manager, invests in companies, it naturally looks first and foremost at hard figures such as turnover, profit, margins and market share. But the financial health of a company can only be sustainable in the long term if it also scores well in terms of the environment, people and governance (or ESG – Environmental, Social & Governance). After all, a company that violates ESG standards will sooner or later be revealed. It creates a reputation problem and is evidence of a lack of long-term vision.
A specialized data provider, Sustainalytics, supports Cadelam in the integration of non-financial data in its investment policy. Sustainalytics is a leading research and analysis agency with more than 180 analysts and provides sustainability data on all listed companies worldwide.
Does a company want to be financially healthy in the long term? Then it must also score well in terms of the environment, people and governance.
In concrete terms, this means:
- ESG Risk: Quantitative ratings and qualitative reports that assess ESG risks that can seriously jeopardise the future of a company, for example a violation of environmental standards or a problem of good governance.
- Controversial activities: Through detailed information, Cadelam identifies companies involved in a range of controversial products or activities. Examples include tobacco, weapons or Arctic oil extraction.
- Sustainable activities: Sustainalytics also reports on impact companies. These are niche companies that generate most of their turnover from products and services that make a positive contribution to society and the environment. They focus on specific activities within the UN's Sustainable Development Goals (SDGs) that aim to reconcile economic growth with social improvement.