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Hendrik-Jan Boer
Team Manager, Senior PM Sustainable Equity Investments
September 2014
Sustainable Sourcing ‘More than logistics and reputation management’’
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ING Investment Management approach to Responsible Investing
Active ownership: voting
and engagement Integrating ESG factors in our
bottom-up investment process
Specialised SRI strategies &
tailormade RI solutions
Defence Policy, exclusions,
societal values and criteria
4 pillar approach
4
Taking Sustainability a step further
ING Investment Management
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ESG integration
Analyzing ESG factors is an integral part of our research process
The analysis is done by our sector analysts, not a separate ESG team
Sector analysts actively involved in engagement activities
Focus on Material ESG items that positively impact risk-adjusted returns:
RI is a more complete approach to investing !
Sector analysts have a selection of Material ESG items to focus on
Material ESG items contribute to the LT bottom line of the business model
ING IM is working with an academic research institute to further investigate “Materiality”
ING IM is actively participating in IIRC Pilot Programme Investor Network
ING Investment Management
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BP Oil spill sinks shares
Accounting Scandal at Olympus
Bribery issues at GlaxoSmithKline
Governance issues at NewsCorp
ESG factors can have a material impact on performance
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Research – When is something “Material” ?
Mining, Energy
Safety Standards, Labour Issues
& Environment
Consumer Social Violations, Labour Issues,
Food Safety
Industrials
Bribery, Governance, Energy
Efficiency
Health Care
Product Liability, Bribery
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ESG integration
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Challenges in global supply chains
ING Investment Management
Five phases of supply chain optimization
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Challenges in global supply chains
ING Investment Management
Logistics: optimizing increasingly complex chains (globalisation, industry variations,
product life-cycles, inventory management, distribution models
Quality: dependent on development stage of society, important product differentiator,
ISO standards
Innovation: competitive advantage, shortened life-cycles reduced timeframe to
capitalise success, requires new ways of cooperation (co-creation of products)
Sustainability: reducing social and environmental footprint, focus shifts from doing no
harm to doing good, (direct) impact analysis and investing, focus from linear to circular
supply chains, securing future sourcing and seeking local market growth
Finance: managing value chain from physical sophistication and global reach to
reduction of working capital, long term finance and integrated risk control
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Material supply chain factors
ING Investment Management
E&S supply chain factors most material in the following sectors:
Food & Staples Retailing
Food, Beverage & Tobacco
Textiles, Apparel & Luxury Goods
Retailing
Household & Personal Products
Containers & Packaging
Examples of E&S supply chain indicators:
Scope and quality of E&S supply chain standards
Policies and monitoring systems
Programmes and targets
Sustainable products (e.g. fair trade)
Reporting
External certification
Source: www.oatsystems.com
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ING IM Additional information: www.ingimresponsibleinvesting.com
ING Investment Management
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