Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Responsible Governance
• Business Ethics
• Fair Work Conditions
• Energy Transition
• Social Inclusion
• Environmental Protection
• Fight Against Cancer

Environmental Achievements

• Reduced total operational footprint from 760 tCO2e in 2020 to 617 tCO2e in 2021 (Scope 1, 2 and Business Travel)
• 50% reduction in greenhouse gas emissions across a significant share of its investment portfolio by 2030 target
• Net-zero emissions within the portfolio by 2050 or sooner target
• 15% of mangroves restored (of 494 ha target by 2023)

Social Achievements

• Launched several employee well-being initiatives, including hybrid working model and employee-led initiatives (NextGen Committee, Digital Ambassadors, Change Agents)
• Increased female representation in total workforce to 34%
• 42% women in new hires under 30
• Launched the Candriam Institute for Sustainable Development to oversee philanthropic activities
• Donated €2.9 million to various social and environmental causes in 2021
• Supported grassroots community initiatives through the “Helping those who Help” campaign

Governance Achievements

• Joined the Net Zero Asset Managers initiative
• Signed the FEBELFIN “Gender Diversity in Finance” charter
• Established a robust governance framework with several sustainability committees (Strategic Sustainability Committee, Sustainability Risk Committee, ESG Steering Committee, CSR Steering Committee, Proxy Voting Committee)
• Implemented policies and codes including a compliance charter and policy, client charter, code of ethics, and supplier charter
• Actively participated in various industry consultations and working groups

Climate Goals & Targets

Environmental Challenges

• Reducing emissions across supply chains
• Ensuring supplier adherence to sustainability commitments
• Addressing challenges in regions with weaker regulation and commitment to ESG
• Balancing ESG considerations with the need to generate risk-aware financial value
• Complexity of the defense industry and difficulty in ensuring responsible use of weapons

Mitigation Strategies

• Implemented a sustainable procurement program to reduce supplier emissions
• Regularly reviewing supplier emissions and impact
• Holding vendors accountable for their carbon footprint
• Using electric and plug-in hybrid vehicles, encouraging sustainable travel, implementing homeworking, and creating a more efficient work environment
• Excluding Russian sovereign debt from sustainable strategies due to governance concerns
• Maintaining strong convictions and disciplined approach to sustainable investing

Supply Chain Management

Responsible Procurement

• Sustainable procurement program
• Regular review of supplier emissions
• ESG scorecard for vendors
• Supplier Relationship Management
• Code of Conduct for vendors

Climate-Related Risks & Opportunities

Opportunities

• Reallocation of capital to innovative solutions such as renewable energy sources

Reporting Standards

Frameworks Used: GRI, SASB, CDP, GHG Protocol

Awards & Recognition

• 2021 European Broadridge Distribution Achievement Award
• Broadridge Fund Brand 50 recognition

Environmental Metrics

ESG Focus Areas

• Carbon Emissions
• Food Security
• Energy Transition
• Democratic Accountability
• Natural Capital
• Human Capital
• Social Capital
• Economic Capital

Environmental Achievements

• Introduced a new emissions model examining carbon footprint by industry and energy source, assessing the potential for Net Zero
• Added a new subcomponent to reflect food production and supply, self-sufficiency, and ultimately food security.
• Enhanced the Sectoral Energy Consumption sub-component to better reflect the latest development.
• Supporting a reforestation project in Senegal with WeForest aiming to restore the Casamance mangroves.

Social Achievements

• Implemented Freedom House classifications as a tail-risk hedge for their framework.
• Added a new subcomponent within the “Basic Needs and Quality of Life” to reflect new global realities in food security.

Governance Achievements

• Constantly enhances framework to ensure conclusions accurately reflect the global economy’s ever-changing complexities and risks.

Climate Goals & Targets

Environmental Challenges

• Climate crisis and increasing inability of Earth’s life-supporting systems to cope with consumption of natural resources.
• Weaponisation of grain exports adding to pressures on food supply chains.
• Autocracies and populist movements gaining ground, hindering common solutions and cooperation.
• Energy security concerns and the need for transition to independent and renewable energy sources.
• Disinformation campaigns promoting polarisation and confusion.
• Difficulty in trusting data reported by autocracies with little media freedom.
• Over-reliance on fossil fuels in some economies.
• Fluctuations in oil and gas prices and currencies influencing carbon intensity data.

Mitigation Strategies

• Redirecting capital flows away from unsustainable activities and towards sustainable long-term opportunities.
• Monitoring and directing investment flows towards countries that uphold democratic norms and human rights and deal with the climate crisis.
• Using reliable independent data from different sources.
• Introducing a proprietary emissions model to track countries’ decarbonisation path.
• Assigning different penalties within the emissions model based on decarbonisation difficulty.
• Using satellite imagery to assess deforestation.
• Excluding autocracies from investment portfolios.
• Implementing a sustainability framework that evaluates countries based on their level of development.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy Transition
• Fair Work Conditions
• Business Ethics
• Human Rights
• Social Inclusion
• Good Corporate Stewardship
• Biodiversity
• Circular Economy

Environmental Achievements

• Reduced GHG emissions across the full value chain substantially lower than pre-pandemic levels
• Reduced waste output substantially lower than pre-pandemic levels
• Restoration of over 500 hectares of mangroves in Casamance, Senegal
• 77% of AUM were sustainable/ESG-compliant by EU standards
• Reduced carbon footprint of operational value chain by 16% compared to the previous year (and by 54% against 2019 benchmark)
• Decreased Scope 3 emissions by 13% compared to 2022 due to reduction in business travel and improved sector emissions
• Increased corporate electrification fleet from 53% to 79%

Social Achievements

• Launched Candriam Academy, reaching 14,500 members across 79 countries
• Published first Human Rights Policy
• 30% of Tier 1 vendors committed to supplier code of conduct
• Improved client report delivery on time to 85%
• Average ongoing duration of investors within funds is 5.3 years
• Average length of mandates currently managed is 11.1 years
• Runner-up in WDI awards in the category of ‘most improved’
• Launched initiative to refine client experience
• Youth mentoring program with Boost
• Partnership with Bozar to support multicultural concerts
• Partnership with Save the Children for renovations of early childhood development centres in Indonesia

Governance Achievements

• Released first report detailing compliance with the UK Stewardship Code
• Joined the Taskforce on Nature-related Financial Disclosures (TNFD)
• Published first Human Rights Policy
• 30% of Tier 1 vendors committed to supplier code of conduct
• Enhanced supplier code of conduct and made it public
• Introduced guidelines for contingent workers aligned with human rights policy
• Further streamlined sustainability governance and oversight processes

Climate Goals & Targets

Environmental Challenges

• Uncertainty in global economic and geopolitical landscape
• Destructive climate change
• Human capital risks in small- and mid-sized firms
• Supply chain disruptions (implied)

Mitigation Strategies

• Commitment to ambitious ESG goals
• Net zero target by 2050 with intermediary targets
• Climate Policy detailing risk assessment and management
• Tiered exclusion system targeting harmful activities
• ESG integration into investments using carbon metrics, transition risk analysis, and temperature alignment
• Engagement with high-emitting companies
• Transparent reporting on climate impacts
• Active engagement campaign with small- and mid-sized companies
• Sustainable procurement practices
• Supplier code of conduct
• ESG questionnaires for vendor selection
• Carbon offsetting program

Supply Chain Management

Supplier Audits: 30% of Tier 1 vendors committed to supplier code of conduct; 100% of new RFPs include ESG questionnaire and assessment; 15% of Tier 1 vendors completed ESG assessment questionnaire.

Responsible Procurement

• Supplier code of conduct
• ESG questionnaire during vendor selection
• Vendor ESG scoring

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather (implied)

Transition Risks

• Regulatory changes (implied)
• Market shifts (implied)

Opportunities

• Development of energy-efficient products (implied)

Reporting Standards

Frameworks Used: GRI, SFDR, TCFD, TNFD, UK Stewardship Code

Certifications: BREEAM, LEED, HQE, Minergie, EDGE Empower® Label, French SRI label, Belgian Towards Sustainability label, LuxFlag ESG label

Awards & Recognition

• Top ESG brand by Hirscheland Kramer Responsible Investment Brand Index
• 21st in the 2023 Broadridge Fund Brands 50 report
• Silver Green Apple Environment Award

Environmental Metrics

ESG Focus Areas

• Water Management

Climate Goals & Targets

Environmental Challenges

• Global water demand exceeding sustainable supply, leading to a water gap of 2,800 km³ by 2050.
• Increasing water stress affecting billions of people and threatening food security.
• Widespread water pollution from various sources, including agriculture and industry.
• Inefficient water management in agriculture and industries.
• Aging water infrastructure leading to significant water loss.
• Climate change exacerbating water scarcity and pollution.

Mitigation Strategies

• Promoting water-smart farming practices and technologies (smart irrigation, drip irrigation, weather intelligence).
• Encouraging closed-loop industrial processes and water recycling.
• Upgrading water infrastructure to reduce leakage and improve resilience to climate change.
• Improving companies' water management practices through engagement and regulation.
• Treating wastewater more efficiently using advanced technologies.
• Exploring desalination as a new water source while mitigating its environmental impacts.
• Preserving and restoring biodiversity to enhance freshwater availability.

Supply Chain Management

Responsible Procurement

• Encouraging sustainable water management practices in supply chains.

Climate-Related Risks & Opportunities

Physical Risks

• Floods
• Droughts

Transition Risks

• Water scarcity
• Increased water costs
• Stringent water regulations

Opportunities

• Investment in water-efficient technologies and solutions.

UN Sustainable Development Goals

• SDG 6: Clean Water and Sanitation

Environmental Metrics

ESG Focus Areas

• Controversial Activities Exclusion
• Climate Change
• Biodiversity
• Human Rights
• Responsible Investment

Environmental Achievements

• Reinforced coal exclusion policy year after year to align with net-zero carbon world requirements.
• Incorporated carbon intensity of power producers in sustainability assessment.
• Systematically assessed companies’ exposure to palm oil-related controversies linked to deforestation and/or biodiversity risks based on RSPO membership/affiliation.

Social Achievements

• Exclusion of companies involved in activities with negative repercussions on human, societal and animal welfare (adult content, conventional weapons, alcohol, gambling, GMO, animal testing).
• Engagement with certain selected companies deriving between 5% and 10% of their revenues from activities in oppressive regimes.

Governance Achievements

• Exclusion of companies with severe to very severe controversies in terms of impact, duration, frequency and/or lack of response from the management of the company (Red Flag Companies).

Climate Goals & Targets

Environmental Challenges

• Availability of ESG data and underlying data methodologies.
• Obtaining granular information on end users and end uses of weapons.
• Assessing the efficiency and credibility of palm oil sustainable certification.

Mitigation Strategies

• Thresholds are analyzed and implemented on a best-effort basis.
• Additional analysis conducted to gain further insight on rating changes.
• Additional checks based on a best-effort approach in assessing palm oil-tied company’s exposures to controversies on land use and biodiversity and their overall due diligence.

Supply Chain Management

Responsible Procurement

• Assessment of suppliers' involvement in controversial activities.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UN Principles for Responsible Investment (PRI), UNGC