a.s.r. believes that businesses that are committed to sustainability, equality and diversity will deliver more value for all stakeholders, both in economic and in social terms. Hence, socially responsible investing is essential for a.s.r.

In 2023, a.s.r. has undertaken further steps regarding the implementation of its Socially Responsible Investment (SRI) policy. Activities include screening, engagement, voting at Annual General Meetings (AGMs), and filing shareholders resolutions, participating in working groups, publishing statements, and collaborating with other parties such as non-governmental organisations (NGOs), clients, and other investors. Simultaneously, significant efforts are undertaken to implement the SRI policy on the existing Aegon NL portfolio. The following sections provide a more detailed overview of a.s.r.’s responsible investment activities in 2023.

Investments in line with SRI policy

a.s.r. safeguards full compliance with its SRI policy using a three-step process: internal teams’ implementation (investment departments), compliance process (risk department) and an independent external assurance by Forum Ethibel. a.s.r. adheres to this target with respect to acquisitions and mergers.

Sustainable and responsible investing

The integration of ESG criteria in the management of investments contributes directly to the reduction of risks (both financial and reputational) and has a positive effect on long-term performance. The SRI policy has been integrated into internal investment practice through:

• Positive selection as part of a.s.r.’s investment process for companies and countries based on the SRI policy, practices and products. Companies are classified using a relative, sector-based ranking for ESG themes. These themes include environment, labour practices, governance, human rights, and CO₂ data;

• A strict exclusion policy for controversial activities which applies to all internally managed portfolios, both for own account and for third parties. In 2023, a.s.r. has excluded 435 companies. With regard to investments in sovereign debt, a.s.r. has excluded 81 countries that are poor performers in the annual Freedom in the World report, or which achieve a low ranking on the Corruption Perceptions Index or the Environmental SDGs;

• Engagement activities, exercising voting rights, and a.s.r.’s targets relating to impact investments and the carbon footprint reduction of the a.s.r. investment portfolio.

• ¹ Global Compact includes Human rights violations, Labour rights violations, and Environmental violations.
• ² Includes double counts due to the fact that some companies are excluded on more than one criteria.

Climate change and energy transition

In 2016, a.s.r. integrated climate change and energy transition into its Strategic Asset Allocation (SAA) as an explicit theme, and has since undertaken measures to implement this across the investment portfolio. a.s.r. has analysed and identified risks for the investment portfolio in its SAA, both bottom-up – covering the consideration of stranded assets and changing business models in the mining and energy sectors – and top-down. In 2023, a.s.r. again incorporated climate scenarios into the SAA. These scenarios served as input for the reporting on climate risks and opportunities, in accordance with the Task Force on Climate-related Financial Disclosures (TCFD); see section 6.2.1 and a.s.r.'s Climate and Biodiversity Report for more details.

Fossil fuel investments strategy

a.s.r.'s exit and phase-out strategy for fossil fuel investments was announced in 2021. The strategy has three distinct phases. The first phase was implemented in 2021, resulting in an immediate zero tolerance for companies deriving revenues from the mining and production of thermal coal. The strategy also includes an exclusion threshold for companies deriving more than 5% of their revenue from unconventional oil and gas. This phase was fully implemented at the beginning of 2022.

Phase two began in 2022 and covers all conventional oil and gas companies in the portfolio. a.s.r. started an intensive engagement process with these companies, including regular assessment and monitoring of the extent to which they operate in line with the Paris Agreement goals. This is done using a combination of tools to assess companies' climate targets, carbon emissions and reductions, and their current climate strategy. Last year, a.s.r. joined the Dutch Climate Coalition, a group of Dutch asset managers with similar fossil fuel strategy objectives. a.s.r. attends and organises regular meetings with all oil and gas companies in its portfolio to monitor their climate actions and targets. An overview of a.s.r.'s efforts can be found in the quarterly ESG reports, see www.asrnl.com.

Phase three is the final part of a.s.r.’s strategy, which began in 2023. During this phase, a.s.r. focuses on the demand side of fossil fuels, more specifically on larger customers of fossil fuels which show a relatively poor carbon performance and on companies that potentially play an important role in the transition to a low carbon society. a.s.r. has identified 15 of these companies in its portfolio, and over a period of more than four years a.s.r. will engage with these companies to encourage them to implement Paris-aligned targets.

Impact investments

In 2023, a.s.r. further increased its impact investments in all asset classes. a.s.r. made a start on the development of an impact framework to assess and monitor the actual impact of the impact investments. See section 2.7.2 for a.s.r.’s performance on the current target on impact investments.

Engagements

Engagement is a broad concept and includes a range of very different actions, topics and objectives. a.s.r. believes that engagement is key for a responsible investor, by using its influence towards change in companies and countries. In 2023, a.s.r. undertook 564 engagements on numerous topics.

A full list of companies engaged with and their status, including the objectives and status of the engagement, can be found at www.asrnl.com.

Health Engagement Alliance 

As a health insurance provider, a.s.r. believes it is important to contribute to a healthier society. This is why, together with other investors, a.s.r. assessed on which health issues in its investment portfolio it had a potential positive impact. The food sector, and in particular fast food and take-away, is a sector where a lot of progress can be made. a.s.r. has selected companies in its portfolio to start engagement processes with, focusing on issues such as responsible marketing, healthy product claims, comprehensive nutritional information, and reporting on health targets.

Other engagements

a.s.r. engages with companies that have shown controversial behaviour (e.g. UNGC violations) or are facing ESG-related risks. Examples of engagements carried out by a.s.r. include meetings with PepsiCo to discuss satellite-based deforestation reports, numerous companies engaged through the Platform Living Wage for Financials (PLWF), and a collaborative engagement with Total Energies regarding the exploration of the EACOP project in Tanzania and Uganda.

Voting

A shareholder's right to vote is essential for the proper functioning of a corporate governance system. a.s.r. exercises this right. Its voting policy is developed in accordance with the Dutch Corporate Governance Code and a.s.r.'s own SRI policy. This policy is applicable to all internally managed listed equities. a.s.r. voted at 96.5% of the annual meetings. 

Environmental analysis 

Environmental shareholders resolutions included water risk exposure, plastics pollution and climate lobbying. The most common resolution was the implementation of carbon footprint reduction targets. Others included the implementation of a transition plan, reporting on climate risks, phasing out of oil and gas production, and the development of a climate lobbying policy.

Social analysis

Social shareholders resolutions relate to equality, such as the demand for a report on the effectiveness of diversity, equity and inclusion efforts and the publication of a racial equity audit. Other social resolutions included remuneration, with shareholders asking for disclosure of CEO pay relative to median employee pay, disclosure of gender and racial pay gaps, and paid sick leave for all employees. There is also increased focus on board skills and board diversity. All resolutions filed regarding ‘Reporting on Just Transition’ were voted for. 

Governance analysis

In 2023, the most common governance-related topic related to lobbying and political spending. These shareholders resolutions generally aim to make the company disclose its lobbying payments and political spending. In most cases, a.s.r. votes in favour of these resolutions, except when a.s.r. believes that a company is already transparent enough. Other common resolutions included shareholder voting and the requirement for an independent Chairman of the board.

Other initiatives 

In March 2023, a.s.r. signed a collective statement against the use of plastics. Companies in the fast mover consumer goods and retail sector are asked to make additional efforts to reduce their reliance on plastics. a.s.r. is currently investigating the possibility of starting collective engagements with other signatories. 

a.s.r. is one of the founding participants of the Nature Action 100, an international initiative with the ambition to address nature loss and biodiversity decline from an investor perspective. In September 2023, Nature Action 100 published a list of 100 companies in key sectors in which institutional investor participants will engage. The investors taking part in Nature Action 100 have kicked off the initiative’s engagement phase by sending letters to the 100 companies, calling for urgent and necessary actions to protect and restore nature and ecosystems and thereby mitigating financial risk.

a.s.r. is also a signatory to the Finance for Biodiversity Pledge, a commitment to protect and restore biodiversity in the investment portfolio. To understand the impact of its investment portfolio on biodiversity, a.s.r. took part in sector initiatives such as the Partnership for Biodiversity Accounting Financials (PBAF) and the biodiversity working group of the Dutch Central Bank’s Platform for Sustainable Financing. a.s.r. also tested the MSCI world for the biodiversity impact according to the Biodiversity Footprint for Financial Institutions (BFFI). In preparation for the TNFD, a.s.r. gained a better understanding of different methodologies for measuring the biodiversity impacts of its investments portfolio, and created an internal tool. This tool enables a.s.r. to perform an initial inventory of the biodiversity impact of its investment portfolio. See sectiion 6.2.2.

a.s.r. launched a financial sector statement to call on Member States to accelerate implementation of the World Health Organisation Framework Convention on Tobacco (WHO FCTC). The goal is to raise awareness concerning the multifaceted benefits of tobacco control, spanning not only health and environmental concerns, but also the significant negative economic impact of tobacco-related issues.