Appendix B – Portfolio: developments 2015

Companies added to the portfolio

3i Group

Best in class – Diversified Financials, United Kingdom

3i Group is an investment management company that mainly invests private equity in mid-market companies. It is a signatory to the UN Principles for Responsible Investing and pursues a responsible investment policy that incorporates best practices. The policy includes an exclusion list of businesses and activities that the company will not invest in, as well as a set of minimum ESG standards. For instance, the company will not invest in companies involved in forced labour or child labour, endangered or protected wildlife, animal testing for cosmetics, tobacco, and weapons and their components. Furthermore, 3iGroup is cautious about investing in activities such as genetic modification, oil sands extraction and nuclear power generation. The company aims to minimise environmental impact. It recognises that its investment results depend on its workforce and is an accredited London Living Wage Employer.

8point3 Energy Partners

Pioneer - Climate Protection, United States

8point3 Energy Partners generates renewable electricity with the solar power generation projects that it owns and operates. At the time of its Initial Public Offering in early 2015, the company owned solar power projects with generation capacity of 432 MW. By acquiring solar energy projects from its sponsors, First Solar and SunPower, 8point3 Energy provides those companies with new capital to invest in renewable energy projects. First Solar and SunPower are both US integrated solar power companies that not only manufacture solar panels, but also offer tailor-made solar power systems and plants to residential, business, government and utility customers.

Acuity Brands

Pioneer – Climate Protection, United States

Acuity Brands’ core business consists of lighting solutions for industrial, infrastructure and residential use. The company’s products include everything from standard lamps and controls to integrated lighting systems, but also prismatic skylights to bring the daylight inside and also services for lighting optimisation. Acuity focuses on the creation of an ‘ecosystem’ of products by integrating indoor and outdoor lighting, daylighting and digital controls. Its energy efficient lighting products and intelligent control software help to minimise energy consumption. The company aims to avoid any adverse impact of its business on the environment and the communities in which it operates and has implemented a framework for responsible sourcing of minerals that is consistent with OECD guidelines. Acuity has reduced the electricity consumption of its operations by 36% since 2006 and has received LEED energy-efficiency certification for its facilities in Ohio and New York.

Amadeus IT Holding

Best in class – Software & Services, Spain

Amadeus provides transaction processing power for the global travel and tourism industry. The company develops the technology that enables travel agents and websites to book airline, rail, cruise and ferry tickets, hotel rooms, car hire and tour packages, but also creates the systems that allow travellers to do everything from selecting their seat to reclaiming their luggage, once a booking is made. Amadeus has developed technology that enables its customers to reduce greenhouse gas emissions, for example by increasing the flight efficiency of airlines, leading to less fuel consumption and lower CO2 emissions. The company also supports initiatives in sustainable tourism, for example by creating a donation tool in partnership with UNICEF that asks travellers for a small donation for specific projects during the flight booking process. The company also partners with important tourism industry stakeholders in order to develop sustainable travelling and tourism.

Baxalta

Best in class – Pharmaceuticals, United States

Baxalta is a biopharmaceutical company that focuses on therapies for the treatment of hemophilia, a wide range of other blood disorders, immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute medical conditions. Baxalta is also investing in new disease areas, including oncology, as well as emerging technology platforms such as gene therapy and biosimilars. The company was spun off from Baxter in July 2015. As long as no separate sustainability assessment has been concluded (planned for winter 2015/2016), the approval rating for Baxter is also applied to Baxalta.

Boston Properties

Best in class - Real Estate, United States

Boston Properties owns, develops and manages office space, mainly in Boston, New York, San Francisco and Washington. Its sustainability efforts centre on energy efficiency, waste reduction, water conservation and green cleaning. Boston Properties has established a sustainability committee that identifies and implements sustainable building practices. The company invests in energy systems to reduce the cost of operations, from which both the company and its tenants profit. It is committed to the U.S. Green Building Council’s LEED® (Leadership in Energy and Environmental Design) certification program. The company also partners with its tenants to further their sustainability objectives.

Danske Bank

Best in class - Banks, Denmark

Danske Bank Group is the largest bank in Denmark and one of the leading financial enterprises in northern Europe. The company has adopted comprehensive programmes aimed at fostering financial literacy, including educational websites for children and young people. It has achieved CO2 neutrality through energy reductions and investments in projects that generate genuine CO2 reductions. Danske Bank promotes the use of renewable energy sources. It has a Corporate Responsibility Board that includes several executive directors. Danske Bank’s SRI policy covers human rights, arms, working conditions, the environment and anti-corruption.

Hennes & Mauritz (H&M)

Best in Class - Retailing, Sweden

Central to H&M’s business concept is the objective of selling fashion that offers value for money. The company keeps its prices low through efficiency and large purchasing volumes. With its management of labour rights in the supply chain, the company sets an example for its competitors. H&M regards the independent suppliers that make its products as long-term partners. Its programmes concerning the basic labour rights of its suppliers’ employees focus on the effectiveness of their management systems. This way, H&M increases its suppliers’ awareness and enables them to take charge of their own sustainability. The company publishes a full list of 1-tier and 2-tier suppliers, thus increasing transparency and accountability. H&M is the largest buyer of organic cotton in the world and has introduced a fibre recycling programme with ambitious targets for the proportion of recycled fibres used in its products. The company has also set ambitious targets for the use of renewable energy.

Kubota

Best in class - Capital Goods, Japan

Kubota produces a broad range of machinery, from farm machinery such as tractors and harvesters, to sewage facilities, irrigation systems and vending machines. Its mission is to support the future of the earth and humanity with its products for the production of food and the supply of reliable water. Kubota performs particularly well with respect to environmental issues. In order to promote the emergence of a recycling society, the company works on waste reduction and recycling and effective utilization of water resources. The company has developed its own Eco-Products label for products that save energy and resources and use less hazardous substances. It also has a strong green procurement policy and monitors its suppliers to ensure compliance with its policies.

MDxHealth

Pioneer - Healthy People, Belgium

MDxHealth develops diagnostic tests for cancer that are based on the identification of DNA biomarkers - genes that have changed due to the presence of cancer. The tests help improve cancer diagnostics, prognosis and (personalised) treatment. MDxHealth has made it a priority to ensure the health and safety of its employees and to minimize its impact on the environment. With its products, the company contributes to human health.

NxStage Medical

Pioneer - Healthy People, United States

NxStage Medical is a medical device company that manufactures products for the treatment of kidney failure. Its primary product is the System One, a small, portable dialysis machine that can be used, for instance, in patients’ homes. The company aims to make renal care simpler and more accessible and thus provide patients with more freedom and a better quality of life. With its products, NxStage contributes to human health.

PayPal

Best in class – Software & Services, United States

PayPal operates a worldwide online payments system. Online money transfers serve as electronic alternatives to traditional paper methods such as checks and money orders. PayPal is one of the world’s largest internet payment companies. The company performs payment processing for online vendors, auction sites and other commercial users, for which it charges a fee. The company was spun off from eBay in July 2015. As long as no separate sustainability assessment has been concluded (planned for winter 2015/2016), the approval rating for eBay is also applied to PayPal.

Power Integrations

Pioneer - Climate Protection, United States

Power Integrations sells analog and mixed-signal integrated circuits (ICs), other electronic components and circuitry. Applications of these products include power conversion in high-power applications such as industrial motors, solar- and wind-power systems, electric vehicles and high-voltage DC transmission systems. The company has a strong focus on energy-efficiency and the reduction of standby power waste of electronic products. It has a ‘Green Room’ website with information on world-wide energy-efficiency standards and it helps manufacturers to design more efficient power supplies. The company also supports academic research in the field of energy efficiency. Power Integrations is a member of the Conflict-Free Sourcing Initiative that aims to avoid the use of so called ‘conflict minerals’.

PowerSecure International

Pioneer – Climate Protection, United States

PowerSecure International offers energy efficient power back-up systems that deliver on-site electricity to protect business operations during power interruptions. Its systems run on low-carbon fuels or solar power and can also be used to reduce costs during peak-demand periods. The company further offers LED lighting technology and energy management services, such as energy efficiency retrofit.

Procter & Gamble

Best in class - Household & Personal Products, United States

Procter & Gamble (P&G) products can be found in almost every household. The brand names of its personal products, which include Head & Shoulders, Wella, Gillette, Oral-B and Pampers, ring a bell with many people. But the company is also well-known for its detergents, with brands such as Ariel and Tide. P&G has set ambitious long-term environmental goals, including powering all plants with 100% renewable energy, using 100% renewable or recycled materials for all products and packaging and having zero consumer and manufacturing waste go to landfills. The time line to reach these goals stretches beyond 2020, for which year the company has set intermediate targets. Furthermore, P&G actively promotes the use of alternatives to animal testing and will itself only use animal testing as a last resort and when required by law. P&G also aims to purchase only certified sustainable palm oil and wood pulp and is well on its way to reach this goal.

Publicis Groupe

Best in class – Media, France

Publicis offers marketing and communication services to large corporate customers, such as Bank of America, Diageo, Microsoft, Renault and Unilever. The company has a strong focus on the social aspects of sustainability, with its staff, their training and their careers being a top priority. Promoting a healthy work-life balance and flexible working hours is part of its efforts, in order to counterbalance the fact that the nature of the services that the company provides requires its staff to be responsive, readily available and act swiftly. Furthermore, Publicis is committed to community issues, resulting in pro bono campaigns and volunteer work carried out by its staff worldwide.

ResMed

Pioneer - Healthy People, United States

ResMed specialises in medical products for the treatment of disorders that cause abnormal breathing patterns during sleep, including Obstructive Sleep Apnoea (OSA). Sleep fragmentation and the loss of the deeper levels of sleep caused by OSA can lead to excessive daytime sleepiness, reduced cognitive function, including memory loss and lack of concentration, depression and irritability. It is associated with an increased risk of mortality due to angina, strokes and heart attacks. ResMed operates in the Healthcare Equipment industry, where disclosure about sustainability issues is rare. In contrast to many of its peers, the company publishes an ESG report covering all three themes.

Saint-Gobain

Best in class - Building Products, France

Saint-Gobain makes construction materials, ranging from self-cleaning windows and photovoltaic glass to plaster, insulation and pipe systems, as well as packaging products such as bottles and jars for food products. The company is committed to developing sustainable buildings and reducing its products’ environmental impact by taking all lifecycle stages into account. It aims to reduce its environmental impact, both in its plants and during product shipment. Saint-Gobain has a strong environmental management system with clear targets and regularly measures its performance. Saint-Gobain further aims to reduce the number of health and safety accidents and also requires its suppliers to comply with a range of socials standards. Compliance to these standards is monitored and the company is transparent about the performed audits.

SEGRO

Best in class – Real Estate, United Kingdom

SEGRO owns, develops and manages warehouses and industrial buildings near key transport hubs in Europe. The company is a founding member of the UK Green Building Council and has representatives on the Sustainability Committee of the British Property Federation. The company has a strong environmental management system and its carbon emissions intensity is well below the industry average. SEGRO has set a target for reducing the energy intensity of its portfolio and has introduced a renewable energy project fund. By providing renewable energy to its customers at a below market rate, the company improves the environmental performance of its buildings and reduces operating costs for its customers.

SolarEdge Technologies

Pioneer - Climate Protection, Israel

SolarEdge develops and sells power optimizers that maximise energy throughput from solar power modules. In addition, the company offers inverters and a related cloud-based monitoring platform that collects and processes information from the power optimizers and inverters of a solar power system to enable customers to monitor and manage their systems. The company aims for continuous improvement in reducing the environmental impact of its products and activities. With sound objectives and targets, the company works to limit its waste, promotes recycling and initiates energy saving activities.

Terumo

Pioneer - Healthy People, Japan

Terumo produces healthcare equipment for cardiac and vascular diseases for use in hospitals and equipment for the collection and processing of donated blood. The corporate responsibility efforts of the company focus on the environment, health and safety. Terumo has a strong policy and management system to support this and plans to obtain certification for all its production sites according to ISO 14001 and OHSAS 18001 international standards. Its quality management system is certified according to another international standard, ISO 13485. By means of its ‘HumanxEco’ guidelines, Terumo not only aims to make its products safer and more efficient, but also both human- and environment-friendly.

Time Warner

Best in class - Media, United States

Storytelling is at the heart of Time Warner’s business, which spans film, television, cable TV and online content. The company believes that it can create economic and social value by telling the world’s stories that develop at the intersection of society, culture and business. At the heart of its corporate citizenship are journalistic integrity, freedom of expression, diversity of viewpoints and responsible content. Examples of Time Warner’s contribution to a dialogue on important social issues are programmes on the prevention of bullying and promoting healthy lifestyles, such as the ‘Move it Movement Tour’ that aims to empower youngsters aged 6-14 to become more active. Time Warner’s film studios have developed a Tobacco Depiction Policy to reduce or eliminate the depiction of smoking and tobacco products/brands in its films.

Countries and/or regions added to the portfolio

The following regions in Germany were added to the portfolio:

  • Land Hessen
  • Land Niedersachsen
  • Land Nordrhein-Westfalen
  • Land Rheinland-Pfalz

Germany is a country with a well functioning democracy and a government that looks after the well-being of its citizens. The country is not subject to international sanctions and has signed and ratified important international conventions.

Companies sold based on sustainability performance

Abertis Infraestructuras: the company does not meet our requirements regarding climate protection

  • Accor: it was not possible to determine whether the company meets our requirements regarding alcohol, factory farming and genetic engineering, as the company chose not to respond to our questions
  • AON: the company does not meet our requirements regarding arms
  • Atlantia: the company no longer belongs to the top 50% of best performing companies in the sector
  • CECO Environmental: the company is involved in nuclear power services
  • Compass Group: the company no longer belongs to the top 50% of best performing companies in the sector
  • DIRECTV: the company has been acquired by AT&T. AT&T is not selected for investment
  • Dong Energy: the company was removed due to involvement in the extraction of oil & gas
  • Gasunie: the company provides tailor-made services for the extraction of oil & gas
  • Medtronic: the company is involved in violation of legislation
  • Pentair: the company is involved in nuclear power and oil & gas activities
  • Simon Property Group: the company no longer belongs to the top 50% of best performing companies in the sector
  • TDC: the company no longer belongs to the top 50% of best performing companies in the sector
  • Volkswagen: the company was removed due to involvement in fraudulent activities

Companies sold based on financial reasons

  • Asahi Holdings
  • Coloplast
  • Cree
  • Dialight
  • EnerNOC
  • Insulet
  • Interface
  • Metro
  • Optos
  • Polypore International
  • Rabobank
  • REC Silicon
  • Sonova
  • Swisscom
  • Telecity Group
  • TeliaSonera
  • Veeco Instruments
  • Vivint Solar
  • Whole Foods Market

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