Fund Size: £39.73m

Total screened & themed / SRI assets: £38576.79

Total Responsible Ownership assets: £57540.75

Total assets under management: £128419.89

As at: 31/03/25

Contact: benjamin.rumary@candriam.com

Overview

Filters

Fund information

Policy

The companies comprising our investable universe must have relevant exposure or reach to one or more of the following sub-themes:

• Essentials: companies that contribute to children’s basic needs (water, nutrition, sanitation, healthcare, housing, family support)
• Development: companies contributing to children’s development needs (Education, infrastructure, safety, sports & leisure)

As it’s an Article 9 fund, the strategy excludes companies that:

• do not meet the criteria of a normative exclusion filter that takes account of compliance with international standards concerning social, human and environmental rights and the fight against corruption, such as set out in the United Nations Global Compact and the ‘OECD's Guidelines for Multinational Enterprises’. This filter aims at excluding companies that are repeatedly and materially in breach of any of these principles. Furthermore, companies that present both material and severe structural risks in terms of environmental, social and governance factors are excluded from the Sub-Fund; and/or,

• are significantly exposed to controversial activities (such as tobacco, armaments, thermal coal and certain other fossil fuels, etc) and to controversial child-related activities. The strategy does not allow investment in companies that manufacture, use or hold antipersonnel mines, cluster bombs, or chemical, biological, white phosphorus and depleted uranium and nuclear weapons; and/or

• are exposed to countries considered to have a highly oppressive regime

Process

ESG considerations are taken into account within the individual investment processes. Our ESG integration approach leverages on the frameworks and analysis conducted by the ESG Team. The analysis and views resulting from the ESG analysis are embedded in our financial frameworks. The consideration of ESG aspects in the financial framework will impact the final issuer score/color and valuation for our equity strategies. To this end, integrating ESG considerations will ultimately impact the construction of the final portfolio.

We have a bottom-up investment process:

• Thematic screening: Positive screening for companies contributing to children’s essentials of development. For this purpose, we use Bloomberg and Alphasense (AI research tool) to research for companies, as well as proprietary research.

• ESG screening: The ESG team monitors children-related controversies thoroughly across all sectors and activities. Sensitive sector include: Breast milk substitutes, Unhealthy products, Aggressive Marketing Practices (since children are more susceptible than adults to being influenced by marketing directed at them)

• Company Analysis: we assess Quality of Management, Business Growth, Competitive advantage, Value creation and Financial leverage. Each of these pillars receives a colour/score that determines the final assessment of a company.

• Portfolio Construction: within the eligible universe, the process is mainly colour-based, bottom-up stock selection; weightings in the portfolio are function of the global colours of the companies. The sector weight deviations from the benchmark are not a strategic objective; they result from our convictions on individual stocks, with top down sanity checks and other deviation boundaries. The weight is significantly impacted by the colour grade (including the ESG score), and the upside potential derived through our valuation analysis (that takes the ESG score into account as well). We favour companies that are 'green' in all aspects. An ‘orange’ company will have a lower weight and 'red' companies are in principle excluded, or extremely reduced, depending on the process.

Resources, Affiliations & Corporate Strategies

ESG Investments & Research Team

Candriam has an independent and dedicated ESG Investments & Research Team, who has developed Candriam’s own ESG analysis methodology applied to three types of issuers: corporations, governments, and supranational institutions.

The team is organised around various pillars:

• ESG Corporate Research
• ESG Sovereign Research
• Impact
• Proxy Voting and Engagement
• ESG Development
• ESG Quant Analytics and Research.

The organigram below describes the organisation of the team:

Date as of 31 January 2025

The ESG department is led by Wim Van Hyfte, PhD - Global Head of ESG Investments & Research and Vincent Compiègne, Deputy Global Head of ESG Investments & Research and Head of ESG Fundamental Research. Wim Van Hyfte, PhD has been portfolio manager for over a decade of one of Candriam’s flagship ESG funds and one of our largest ESG mandates. We believe we are one of the few investment managers to underscore the importance of integrating ESG factors in the investment process by naming an experienced ESG portfolio manager as global head of ESG research. Wim further enhances our research process with his academic research and doctorate in Financial Economics.

The ESG Investments & Research team is made up of 19 analysts dedicated to Corporate ESG Analysis, Sovereign ESG Analysis, Impact and Engagement & Voting. The corporate ESG analysts are specialised by sector. They integrate ESG risks and opportunities in both sector and company research.

The ESG analysts have designed an extensive database, which allows the management of all stages of our ESG investment process internally, from ESG analysis to portfolio construction and analysis. For the majority of our sustainable strategies, the ESG analysts determine the eligible ESG universe for the investment management team on the basis of the proprietary ESG analysis. The investment management teams then apply their respective investment processes and select issuers from the ESG Universe. For specific strategies, such as the Candriam Sustainable Equity Climate Action strategy, the eligibility of issuers is determined in conjunction with the investment teams.

The ESG Investments & Research Team also comprises dedicated ESG professionals for engagement activities and corporate responsible development. As a responsible investment manager, we are committed to engaging with issuers, and to exercising our shareholder voting and other rights in an educated and constructive fashion. We continuously expand our engagement with issuers, investors, and the public. In 2022, following a competitive submission, Candriam was named “Stewardship Team of the Year” at the Financial News Excellence in Institutional Fund Management Awards, in recognition of its constructive engagement and ESG proxy voting activities.

Our ESG Investments and Research Team is supported by an ESG Quant Analytics & Research team, specialised in ESG data analysis, and an ESG Development team, in charge of the commercial development and communication of Candriam’s ESG expertise.

Candriam governs its sustainability through several committees, each with specific roles and responsibilities:

• Strategic Sustainability Committee: Sets out strategic orientations for ESG investing and corporate sustainability, supported by ESG and CSR experts.
• Sustainability Risk Committee: Oversees and steers the management of extra-financial risks, including climate and human rights risks, and defines company-wide ESG investment restrictions.
• Proxy Voting Committee: Provides strategic guidance on proxy voting best practices and monitors Candriam’s voting policy.
• Candriam Institute for Sustainable Development: Oversees philanthropy and community impact programs, supporting initiatives in ESG research, education, social inclusion, environment, and cancer research.
• ESG Steering Committee: Coordinates the implementation of the strategic ESG roadmap, involving investment, operational, IT, and regulatory workstreams.
• CSR Steering Committee: Oversees and coordinates the implementation of the CSR roadmap across staff, clients, operational value chain, governance, and the community.

These committees ensure a comprehensive governance structure for sustainability at Candriam

Candriam’s sustainability approach across investment products and other dimensions of Candriam’s integration of sustainability considerations are described in detail through the following policies:

Sustainable Investment Policy, Exclusion Policy, Integration Policy, SRI Transparency Codes, Climate Policy, Biodiversity Policy, Sustainability Risk Policy, Principal Adverse Sustainability Impacts Statement, Human Rights Policy, Engagement Policy,  Proxy Voting Policy, CSR Report. 

Dialshifter

This fund is helping to ‘shift the dial from brown to green’ by...

 ...integrating ESG factors at every step of the investment process, from applying norms-based and controversial activities exclusions, to integrating ESG criteria in the fundamental stock analysis that will be reflected (and have an impact) on the valuation of the company. Apart from its ESG and financial objectives, the fund has 2 ESG KPIs:

• achieving an overall ESG score higher than that of its benchmark index (ACWI) and
• contributing to SDGs number 3 (health care and well-being), 4 (education) and 6 (water/sanitation).

Literature

• Fund overview & literature (including factsheet)

This document is provided by Candriam as an answer to a Request For Information issued by the recipient and is intended for the Recipient only. Please refer to the prospectus of the funds and to the key information document before making any investment decision. This communication does not constitute an offer to buy or sell financial instruments, nor does it represent an investment recommendation or confirm any kind of transaction, except where expressly agreed. Although Candriam selects carefully the data and sources within this document, errors or omissions cannot be excluded a priori. Candriam cannot be held liable for any direct or indirect losses as a result of the use of this document. The intellectual property rights of Candriam must be respected at all times, contents of this document may not be reproduced without prior written approval.

Warning: Past performance of a given financial instrument or index or an investment service or strategy, or simulations of past performance, or forecasts of future performance does not predict future returns. Gross performances may be impacted by commissions, fees and other expenses. Performances expressed in a currency other than that of the investor's country of residence are subject to exchange rate fluctuations, with a negative or positive impact on gains. If the present document refers to a specific tax treatment, such information depends on the individual situation of each investor and may change.

 In respect to money market funds, please be aware that an investment in a fund is different from an investment in deposits and that the investment’s principal is capable of fluctuation. The fund does not rely on external support for guaranteeing its liquidity or stabilizing its NAV per unit or share. The risk of loss of the principal is borne by the investor.

 Candriam consistently recommends investors to consult via our website https://www.candriam.com the key information document, prospectus, and all other relevant information prior to investing in one of our funds, including the net asset value (“NAV) of the funds. Investor rights and complaints procedure, are accessible on Candriam’s dedicated regulatory webpages https://www.candriam.com/en/professional/legal-information/regulatory-information/. This information is available either in English or in local languages for each country where the fund’s marketing is approved.

According to the applicable laws and regulations, Candriam may decide to terminate the arrangements made for the marketing of a relevant fund at any time.

Information on sustainability-related aspects: the information on sustainability-related aspects contained in this communication are available on Candriam webpage https://www.candriam.com/en/professional/sfdr/. The decision to invest in the promoted product should take into account all the characteristics or objectives of the promoted product as described in its prospectus, or in the information documents which are to be disclosed to investors in accordance with the applicable law.

Notice to investors in Switzerland: The information provided herein does not constitute an offer of financial instruments in Switzerland pursuant to the Swiss Financial Services Act ("FinSA") and its implementing ordinance. This is solely an advertisement pursuant to FinSA and its implementing ordinance for financial instruments.

Swiss representative: CACEIS (Switzerland) SA, Route de Signy 35, CH-1260 Nyon. The legal documents as well as the latest annual and semi-annual financial reports, if any, of the investment funds may be obtained free of charge from the Swiss representative.

Swiss paying agent: CACEIS Bank, Montrouge, succursale de Nyon/Suisse, Route de Signy, 35, CH-1260 Nyon.

Place of performance: Route de Signy 35, CH-1260 Nyon.

Place of jurisdiction: Route de Signy 35, CH-1260 Nyon.

Specific information for investors in France: the appointed representative and paying agent in France is CACEIS Bank, Luxembourg Branch, sis 1-3, place Valhubert, 75013 Paris, France. The prospectus, the key investor information, the articles of association or as applicable the management rules as well as the annual and semi-annual reports, each in paper form, are made available free of charge at the representative and paying agent in France.

Specific information for investors in Spain: Candriam Luxembourg Sucursal en España has its registered office at C/ Pedro Teixeira, 8, Edif. Iberia Mart I, planta 4, 28020 Madrid and is registered with the Comisión Nacional del Mercado de Valores (CNMV) as an European Economic Area management company with a branch.

Specific information for investors in Austria: The appointed Paying and Information Agent in Austria is Erste Bank der oesterreichischen Sparkassen AG, Am Belvedere 1, 1100 Vienna, Austria. The prospectus, the Key Investor Information Documents (KIIDs) relating to the portfolios of the Fund, the Articles, the audited annual accounts, the semi-annual accounts as well as the issuance and redemption prices are available in Austria free of charge (in the German language) at the Austrian Paying and Information Agent.”  

Last amended: 25/01/24 11:11