Sustainable and ESG investing

with ABN AMRO Private Banking

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ESG and sustainable investments are crucial to the future of both our world and our portfolios, because now more than ever, we need to find the right balance between people, the environment and society. At ABN AMRO we take this responsibility seriously, and we now have many years' experience in selecting and promoting ESG and sustainable investments without the need to sacrifice returns. In addition to thinking about the future of the planet, you also need to take care of your own future and that of your children and grandchildren.

FAQs about ESG and sustainable investing

What is sustainable investing?

In the past, everyone could apply the term sustainable investing to whatever they wanted. Now, thanks to new regulations, a definition of sustainable investing has been created so that everyone uses this term to refer to the same things. And that's a really good thing. It allows you to assess whether your investments are truly sustainable and it can also try to put a stop to the phenomenon of investments being wrongly promoted as sustainable (referred to as "greenwashing"). Sustainable investment means investing in an economic activity that contributes to an environmental or social goal, and where the investment does not significantly harm any environmental or social objective, and where the companies in which you invest follow good governance practices. A sustainable investment therefore has quite a few requirements to meet.

Sustainable investment products like this are also referred to as Article 9 (or dark green) products, as defined by the SFDR Regulation. You can find out more about this in our brochure ' A closer look at your investor profile '.

What is the difference between sustainable investing and ESG investing?

The new regulations make a strict distinction between ESG investments and sustainable investments to promote transparency and prevent greenwashing. If you opt for ESG investments (also referred to as Article 8 or light green), you will be investing in companies that comply with a number of Environmental, Social and Governance sustainability criteria. These ESG investments are identified by applying a best-in-class principle, exclusion methods and engagement.

Sustainable investments go one step further and must meet a greater number of criteria. Creating an impact is a priority: as mentioned above, they must aim to make a positive contribution in an environmental and/or social area. The financial return takes a back seat with this type of investment.

By asking you a few questions, the Bank can work out your sustainability preferences. More specifically, you need to indicate your preferences in relation to various sustainability criteria (such as making a positive contribution to an environmental and/or social goal). In addition to the traditional risk profile determination, your sustainability preferences will help determine what approach is most suitable for you. You can find out more about this in our brochure ' A closer look at your investor profile '.

How do I get started with ESG or sustainable investing?

Would you like to get started with ESG or sustainable investing, but don't know where to begin? Your Private Banker will be happy to discuss how you can build your portfolio with you and advise you on our investment solutions. Book an appointment online with one of our experts, and we will discuss, in a no-obligation review, what you are looking for and what you expect from ESG and sustainable investing. Based on the results of this meeting, you can select the form of investment that suits you best.

As part of your quarterly report, you will then receive an overview of the sustainability information for your investments. You can also consult this at any time during the year through the Sustainability Dashboard in the app, or through the web portal.

In what areas can I make ESG and sustainable investments?

You need to look for companies that are actively working in future-facing sustainability themes. Examples could include healthy living, water, waste and recycling, energy efficiency and security of supply. However, companies that focus on technological progress, product innovation and process-based efficiencies, with a view to a more sustainable future, can also add value to an ESG or sustainable investment portfolio.

What are the likely returns on ESG and sustainable investing?

There is still a common misapprehension that ESG or sustainable investments will, by definition, mean lower returns. Our own experience, based on working in ESG investing for over ten years, demonstrates just the opposite. For our ESG and sustainable investments, we include parameters that map out how well a company is positioned with one eye on the future. We look at these investments over the long-term, with a specific investment horizon. It goes without saying that companies with a more sustainable long-term vision are likely to be able to continue delivering better returns in the future. They understand the challenges that lie ahead of them, and turn them into opportunities. That makes these types of investment attractive, because they allow you to become involved in moving the sustainable transition forwards, they add a really long-term dimension to your portfolio, and focus on areas with growth potential. You do, however, still need to take into account the risk of concentration.

What is impact investing?

Impact investing is our form of sustainable investment, through which we try to emphasise even more our objective of using investments to make a positive impact. Only companies with a measurably positive social and/or environmental impact are selected, and their turnover must also contribute to the Sustainable Development Goals. At ABN AMRO Private Banking, you opt for this type of investment when you choose the Impact Mandate.

Is it a good idea to prefer ESG or sustainable investing nowadays?

Fears about moving to ESG or sustainable investing in these uncertain socio-economic times generally stem from the assumption that these investments will yield less than traditional investments. We see the exact opposite: companies that consciously pursue a more sustainable long-term vision offer good growth prospects for the long term. You could compare the sustainability transition to the fourth industrial revolution, or more recently with digitalisation, when those who got on board early reaped the benefits. Companies that missed the boat collapsed. As a bank, our job is to select the right companies. Companies with a high ESG score that contribute to one or more sustainability goals. In the case of our sustainable products, the ESG score levels required to qualify have been further increased, and selection is also based on companies' net positive impact on the environment and/or society. We are convinced that technological advances, product innovation and process-based efficiencies will lead to increased profitability in the long run, accelerated earnings growth and, ultimately, a good market valuation. If the global community continues to support the Paris Climate Agreement and seeks to achieve the Sustainable Development Goals by 2030, sustainable investments offer attractive opportunities.

Remember to bear in mind the risk of concentration and other risks when it comes to your sustainable investments.

Get inspired

Duurzaam beleggen van trend naar norm 624x362

ESG investing: the trend becomes the norm

ESG investing is more popular than ever. What's more, the question is no longer if it will completely overtake traditional investments, but when. "As far as I'm concerned, there's not one single reason not to engage in ESG investing", says expert Hans Timmerman of ABN AMRO Private Banking.

Vier (on)waarheden over duurzaam beleggen

Four (un)truths about ESG and sustainable investing

The demand for ESG (environmental, social, and governance) investments and sustainable investing is increasing, with more and more investors seeking both a financial return and a social benefit. However, this also raises many questions. What exactly do the returns look like? Is there sufficient financial potential? This article discusses several important (un)truths that are commonly heard.

1. Schedule an appointment

Schedule an appointment with one of our specialists. You can easily make an appointment online .

2. Defining your sustainability profile

During a no-obligation meeting, you can discuss your goals and wishes in the field of ESG and sustainable investing.

3. Choose investment type

Based on the outcome of the meeting, you will choose the type of investment that suits you.

Our investment solutions

Sustainable or ESG Discretionary Portfolio Management

For you, investing is more than just capital growth. You want to invest in sustainable organisations, in companies that pursue not only financial but also social returns. In companies that lead the way in finding and maintaining the balance between 'people, planet & profit'. The portfolio managers make clear choices to put together a socially responsible investment portfolio.

Discover Sustainable Discretionary Portfolio Management

Investment Advice

Do you want to do your own investing, but still require some extra advice? Together with the ABN AMRO Private Banking investment advisor, you put together a balanced investment portfolio in accordance with your knowledge and risk profile

More information

Sustainable investments: the Impact Mandate

The Impact Mandate goes one step further when it comes to sustainability. Only companies whose turnover makes a net positive contribution to a better world have a chance of being included in the portfolio.

Discover the Impact Mandate

Sustainability Dashboard: What is the sustainable impact of your investments?

If you invest with ABN AMRO, you will find an overview of the sustainable impact of your investments in your webportal (soon also in App)*. You will be able to see how sustainable your investments are, whether your investments are achieving suitable benchmarks and what your contribution is to the various treaties that are aiming to make the world more sustainable. More information is available on the following web pages.

*Only for clients invested in Advisory or Discretionary Portfolio Management

More about the sustainability dashboard

The ESG risk rating of your investments

Your investments and the SDGs

Your investments and the Paris Agreement

The CO2 emissions of your investments

How sustainable is your portfolio?

Find out how your portfolio compares to the sustainability score of the benchmark.

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