Sustainability-related disclosure | Berenberg Fund Strategy 3

Sustainability-related disclosure according to Article 10 of Regulation (EU) 2019/2088 in conjunction with Article 24 et seq. of Delegated Regulation (EU) 2022/1288

The subject of this document is mandatory information about the environmental and/or social characteristics of this asset management strategy. It is not advertising material. This information is required by law to transparently explain the environmental and/or social features advertised by the asset management strategy.

a) Summary

No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial product

This asset management strategy promotes environmental and social characteristics within the meaning of Article 8 of the Disclosure Regulation.

In the majority of investment decisions, environmental and social characteristics are taken into consideration, including for example climate change and pollution in the area of environmental, as well as working conditions, health and safety in the area of social. In addition, aspects in the area of corporate governance are taken into account.

Investment strategy

To fulfill the promoted characteristics, the investment strategy of the asset management strategy focuses on ESG exclusion criteria applied to potential investments to ensure compliance with minimum ESG standards. The evaluation is based on a holistic qualitative and quantitative analysis of the target funds. The core element is an internally developed questionnaire and personal interviews with the asset managers of the target funds used. In addition, sustainability assessments by recognized external agencies round off the process.

The Berenberg ESG exclusion criteria for active third-party funds and ETFs set a minimum standard from an ESG perspective to be investable for the portfolio. In addition to the ESG exclusion criteria, further ESG elements can be implemented in the portfolio.

The corporate governance practices of the companies invested in by the ETFs or active third-party funds are assessed on the basis of the methodology of the respective asset manager.

In addition, the exclusion of companies from the majority of the active third-party funds and ETFs that violate the United Nations Global Compact Principles ensures a minimum standard of corporate governance at portfolio level.

Proportion of investments

The asset allocation of the asset management strategy and the extent to which it may take direct or indirect risk positions vis-à-vis companies can be found in the investment guidelines.

The category "Other investments" includes cash. Furthermore, no minimum environmental or social protection is applied to "Other Investments".

Monitoring of environmental or social characteristics

The attainment of the promoted environmental and social characteristics is monitored, among other things, by checks for compliance with the binding elements of the investment strategy. The evaluation is based on data that is gathered through an internally developed questionnaire and personal interviews with the asset managers. The questionnaire for gathering the data is defined and regularly reviewed by the Berenberg Wealth and Asset Management ESG Office as well as the Portfolio Management.

Methodologies

The Berenberg ESG exclusion criteria for active third-party funds and ETFs set a minimum standard from an ESG perspective that target funds must meet in order to be investable for the portfolio.

Active third-party funds are reviewed as part of a holistic qualitative and quantitative analysis. The core element is an internally developed questionnaire and personal interviews with the asset managers of the target funds used. In addition, sustainability assessments by recognized external agencies round off the process. A standardized and systematic evaluation of the information collected takes place at regular intervals, on the basis of which an internal score is compiled.

The attainment of the promoted environmental and social characteristics is measured through regular checks on compliance with the binding elements of the investment strategy and with sustainability indicators based on these binding elements.

Data sources and processing

To attain the environmental and social characteristics promoted by the asset management strategy, the following data sources are used:

  • Regular review of active target funds within framework of a holistic qualitative and quantitative analysis based on input collected from external asset managers via internally developed questionnaire and personal discussions as well as sustainability assessments by recognised external agencies
  • Methodologies of the indices that underly the ETF.

Limitations to methodologies and data

When analysing active target funds and ETFs, we depend on the accurate transmission of data from the external asset managers. Here we carry out plausibility tests on a random basis and verify the information in personal interviews.

Due diligence

In addition to reviewing legal and contractual requirements as well as analysing financial metrics, the environmental and social characteristics of portfolio positions are taken into account depending on the ESG elements implemented in the asset management strategy.

The Berenberg ESG exclusion criteria for active third-party funds and ETFs set a minimum standard from an ESG perspective that target funds must meet in order to be investable for the portfolio. Active third-party funds are reviewed as part of a holistic qualitative and quantitative analysis. The core element is an internally developed questionnaire and personal interviews with the asset managers of the target funds used. In addition, sustainability assessments by recognized external agencies round off the process. A standardized and systematic evaluation of the information collected takes place at regular intervals, on the basis of which an internal score is compiled. The questionnaire for gathering the data is defined and regularly reviewed by the Berenberg Wealth and Asset Management ESG Office as well as the Portfolio Management.

Engagement policies

Engagement is not an explicit part of the environmental or social investment strategy of this asset management strategy.

Designated reference benchmark

The asset management strategy does not currently use an index as a benchmark to determine whether the strategy is aligned with the advertised environmental and/or social characteristics.


b) No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

c) Environmental or social characteristics of the financial product

This asset management strategy promotes environmental and social characteristics within the meaning of Article 8 of the Disclosure Regulation.

In the majority of investment decisions, environmental and social characteristics are taken into consideration , including for example climate change and pollution in the area of environmental, as well as working conditions, health and safety in the area of social. In addition, aspects in the area of corporate governance are taken into account.

d) Investment strategy

To fulfill the promoted characteristics, the investment strategy of the asset management strategy focuses on ESG exclusion criteria applied to potential investments to ensure compliance with minimum ESG standards. The evaluation is based on a holistic qualitative and quantitative analysis of the target funds. The core element is an internally developed questionnaire and personal interviews with the asset managers of the target funds used. In addition, sustainability assessments by recognized external agencies round off the process.

The Berenberg ESG exclusion criteria for active third-party funds and ETFs set a minimum standard from an ESG perspective to be investable for the portfolio. In addition to the ESG exclusion criteria, further ESG elements can be implemented in the portfolio.

The corporate governance practices of the companies invested in by the ETFs or active third-party funds are assessed on the basis of the methodology of the respective asset manager.

In addition, the exclusion of companies from the majority of the active third-party funds and ETFs that violate the United Nations Global Compact Principles ensures a minimum standard of corporate governance at portfolio level.

e) Proportion of investments

The asset allocation of the asset management strategy and the extent to which it may take direct or indirect risk positions vis-à-vis companies can be found in the investment guidelines.

#1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or social characteristics promoted by the financial product.

#2 Other includes the remaining investments of the financial product which are neither aligned with the environmental or social characteristics, nor are qualified as sustainable investments.

The category #1 Aligned with E/S characteristics covers: The sub-category #1B Other E/S characteristics covers investments aligned with the environmental or social characteristics that do not qualify as sustainable investments.

The category "Other investments" includes cash holdings.

f) Monitoring of environmental or social characteristics

The attainment of the promoted environmental and social characteristics is monitored, among other things, by checks for compliance with the binding elements of the investment strategy. The evaluation is based on data that is gathered through an internally developed questionnaire and personal interviews with the asset managers. The questionnaire for gathering the data is defined and regularly reviewed by the Berenberg Wealth and Asset Management ESG Office as well as the Portfolio Management.

The internal control of this monitoring and the underlying regulatory classification is carried out by Portfolio Management, the ESG Office, Compliance and Internal Audit, among others.

g) Methodologies

The Berenberg ESG exclusion criteria for active third-party funds and ETFs set a minimum standard from an ESG perspective that target funds must meet in order to be investable for the portfolio.

Active third-party funds are reviewed as part of a holistic qualitative and quantitative analysis. The core element is an internally developed questionnaire and personal interviews with the asset managers of the target funds used. In addition, sustainability assessments by recognized external agencies round off the process. A standardized and systematic evaluation of the information collected takes place at regular intervals, on the basis of which an internal score is compiled.

The attainment of the promoted environmental and social characteristics is measured through regular checks on compliance with the binding elements of the investment strategy and with sustainability indicators based on these binding elements.

h) Data sources and processing

To attain the environmental and social characteristics promoted by the asset management strategy, the following data sources are used:

  • Regular review of active target funds within framework of a holistic qualitative and quantitative analysis based on input collected from external asset managers via internally developed questionnaire and personal discussions as well as sustainability assessments by recognised external agencies
  • Methodologies of the indices that underly the ETF.

To ensure data quality and to process data, the following measures are taken:

  • Input from external asset managers for review of active target funds within framework of a holistic qualitative and quantitative analysis is collected via internally developed questionnaire and personal discussions. This input is subsequently documented in an internal database, assessed for completion and analysed further within the framework. In case of missing or erroneous information, we may engage further with the respective asset managers and/or enrich with further externally collected information.

Through the regular review of active target funds within the framework of a holistic qualitative and quantitative analysis, we obtain data directly from the respective external asset managers. Hence, we do not need to rely on estimated data. Hence, we do not need to rely on estimated data. Through the regular review of ETFs, we draw on the methodologies of the indices that underly the ETF. To the extent that those rely on estimated data, for example in the case of non-existent corporate disclosure, we rely indirectly on the estimated data. As coverage and methodologies changes and further develops, a proportion of data that is estimated cannot be given.

i) Limitations to methodologies and data

When analysing active target funds and ETFs, we depend on the accurate transmission of data from the external asset managers. Here we carry out plausibility tests on a random basis and verify the information in personal interviews.

j) Due diligence

In addition to reviewing legal and contractual requirements as well as analysing financial metrics, the environmental and social characteristics of portfolio positions are taken into account depending on the ESG elements implemented in the asset management strategy.

The Berenberg ESG exclusion criteria for active third-party funds and ETFs set a minimum standard from an ESG perspective that target funds must meet in order to be investable for the portfolio. Active third-party funds are reviewed as part of a holistic qualitative and quantitative analysis. The core element is an internally developed questionnaire and personal interviews with the asset managers of the target funds used. In addition, sustainability assessments by recognized external agencies round off the process. A standardized and systematic evaluation of the information collected takes place at regular intervals, on the basis of which an internal score is compiled. The questionnaire for gathering the data is defined and regularly reviewed by the Berenberg Wealth and Asset Management ESG Office as well as the Portfolio Management.

k) Engagement policies

Engagement is not an explicit part of the environmental or social investment strategy of this asset management strategy.

More detailed information on our engagement approach can be found in the publicly available Berenberg Wealth and Asset Management Engagement Policy as well as the annual Berenberg Wealth and Asset Management Active Ownership Report.

l) Designated reference benchmark

The asset management strategy does not currently use an index as a benchmark to determine whether the strategy is aligned with the advertised environmental and/or social characteristics.