Sustainable and Responsible Investment
By incorporating ESG factors at various stages of the investment process, BLI aims to make informed, relevant and responsible investment decisions that will generate sustainable returns over the long term.
An approach rooted in BLI’s long-term philosophy
Our signing of the United Nations Principles for Responsible Investment (UN PRI) in 2017 confirmed our commitment to promoting sustainable and responsible investment.
This approach reflects our belief that integrating ESG factors is an important part of identifying the risks and opportunities that might influence the long-term performance of our investments.
Integration of ESG factors
Complementary benefit of financial and non-financial analysis
We integrate environmental, social and governance (ESG) criteria at different stages of our investment processes, depending on the specific characteristics of the asset classes and universes covered.
This approach is consistent with our historical method of analysis: non-financial analysis (sometimes called extra-financial reporting) complements traditional financial analysis to develop a comprehensive understanding of the issuers that are analysed and thereby forge solid investment convictions.
Building convictions that create long-term value
Our ESG approach is designed to go beyond simple regulatory compliance and add value by providing an understanding of ESG issues and their impact on the long-term performance of companies.
Taking sustainability risks into account is one of the pillars of our methodology. ESG analysis enables us to identify material risks for a company at a sufficiently early stage, before these would be detectable through traditional financial analysis, and to quantify this non-financial risk to enable our asset managers to make informed investment decisions. Because an unidentified non-financial risk can quickly turn into a real financial risk.
Beyond this consideration of non-financial risks, our ‘sustainable assets’ methodology, which is governed by the requirements of the European SFDR (Sustainable Finance Disclosure Regulation) directive, reflects our convictions regarding the social and environmental contribution of issuers.
An approach based on several pillars
Exclusion Policy
We apply a general exclusion policy that aims to exclude from our investment universe issuers that are active in criticised sectors, involved in serious controversies or do not comply with international standards. Additional exclusion criteria apply to the sustainable asset universe.
Centralised ESG data management
We combine proprietary analysis with external sources in the non-financial analysis process. An internally developed tool gives our asset management teams access not only to basic information about companies but also to specific ESG information from external sources (ratings, key indicators, controversies, a company’s alignment with the SDGs, etc.). In particular, the tool produces a preliminary analysis of a security's compatibility with our ‘sustainable assets’ classification.
ESG integration
The consideration of ESG factors in the analysis and decision-making process differs according to the asset class in question.
- Equities: integration of ESG ratings into the valuation model
- Bonds: optimisation of the ESG rating
Sustainable assets
Our approach is based on a qualitative analysis assessed by the contribution to the SDGs for companies and on a proprietary model for sovereign issuers.
This highly qualitative methodology enables us to forge robust investment convictions by integrating a raft of non-financial information into our analyses.
Active shareholders
We exercise our shareholder responsibility by voting at general meetings and engaging with companies.
Impact-objective management
Greater impact through complementary levers for action
The ‘Double Impact’ approach is the fruit of a partnership between BLI and the Belgian specialist Funds For Good (FFG),whose mission is to generate local and direct impact. By joining forces, we are pooling our expertise to offer investors wishing to grow their capital responsibly investment funds that combine two highly complementary types of impact:
Intra-investment impact (BLI)
Selection of companies whose activities are aligned with the United Nations Sustainable Development Goals.
Post-investment impact
FFG uses part of its management fees to support, through financing and coaching, entrepreneurs in precarious employment or those with social or environmental projects.
Management based on three core values
Impact
The main focus of the strategy, emphasis on the Sustainable Development Goals (SDGs).
Quality
The cornerstone of Business-Like Investing, the core philosophy of BLI's equities management.
Valuation
The concept of margin of safety to maximise upside potential and reduce downside risk.
The Sustainable Development Goals as the guiding principle for identifying impact
The natural basis for developing an impact-oriented strategy investing in listed equities is the framework provided by the United Nations Sustainable Development Goals.
This ensures that the SDGs as a whole are covered by our analysis through four main impact categories.
Key documents
The SFDR Regulation, which is part of the EU's ESG action plan, introduces various disclosure requirements for financial market participants with regard to the integration of sustainability-related risks, negative impacts on sustainability factors, and the concept of “sustainable” assets.
BLI's entire methodological ecosystem for sustainable and responsible investing can be viewed in the documents listed below.