Vision

At Vive, investing goes beyond just financial aspects. Vive includes sustainability criteria in its selection policy. In doing so, Vive strives to select investment funds and managers that excel in the field of sustainability within their category. Sustainability is approached from two sides.

1. Sustainability risks (Outside-in): Vive analyzes the sustainability risks that can affect the performance of investments, such as environmental problems, social risks and poor corporate governance. These are briefly referred to as ESG factors: Environment, Social and Governance. We integrate these risks into our investment process to make informed selection decisions that increase the robustness of our portfolios.
2. Sustainability impact (Inside-out): Vive does not have a sustainable investment objective but promotes social characteristics through its selection policy. Vive does this on the basis of the frameworks from the Sustainable Finance Disclosure Regulation (SFDR), the European legislation that promotes transparency around sustainability.

By managing sustainability risks with ESG integration, we strengthen our risk-return ratio and support our long-term goals.

Application of sustainable investing

Vive heeft geen specifieke duurzaamheidsdoelstellingen geformuleerd maar promoot sociale kenmerken. Vive selecteert beleggingsfondsen op basis van een selectiebeleid, waar rekening wordt gehouden met duurzame karakteristieken, met als doel een gebalanceerde risico-rendementsverhouding. De selectiecriteria op basis van duurzaamheid zijn gebaseerd op de volgende principes:

1. Exclusion policy: Vive only invests in funds that actively exclude investments based on a structured exclusion policy, if this is possible within the investment category.
2. Best-in-Class Selection: Vive only invests in funds that excel in sustainability within their investment category and mandate based on ESG performance and that promote ESG goals or make a positive impact in line with the SFDR criteria. To guarantee this, Vive only selects funds with:
   • Minimum MSCI ESG rating BBB
   • Minimum SFDR article 8 classification, with a preference for article 9 funds
3. Voting Rights and Engagement: Vive only invests in funds that actively exercise their voting rights and have a clear engagement strategy to encourage improvements in sustainability aspects. This is only relevant for equity funds.‍
4. Social characteristics: Vive promotes social characteristics by only investing in investment funds of which:
   • less than 0.5% of the portfolio is invested in companies with direct or indirect involvement with controversial weapons.
   • less than 0.5% of the portfolio is invested in companies that derive at least 5% of their revenue from tobacco production or at least 15% from the combined revenue of tobacco distribution, supply or retail.
   • less than 0.5% of the portfolio is invested in companies that are directly involved in highly persistent controversies. These controversies may relate to the environment, customers, human rights, labor rights or governance and are determined using the 'MSCI ESG Controversies' methodology.
   • less than 0.5% of the portfolio is invested in companies that violate the UN Global Compact (UNGC) principles.

The minimum SFDR classification is not applied to government bonds by default, as these are generally less measurable than other investment categories.

With this policy, we ensure that our investments not only meet financial requirements but also contribute to sustainable and social value, in line with the continuous development of sustainability standards and regulations.

Overzicht per criterium

1. Sustainability risks & ESG Ratings

Sustainability risks

A sustainability risk is an event or circumstance in the field of Environment, Social or Governance that may have a negative impact on the value of an investment. Examples of such risks are:

Environmental risks: Climate change can reduce the value of investments in CO₂-intensive sectors, as the business model of these companies may not be sustainable in the long term.

Social risks: Poor working conditions or human rights violations can damage a company's reputation, with negative consequences for its financial results.

Governance risks: Lack of proper governance, such as corruption or insufficient risk management, can lead to operational and financial problems.

ESG Ratings

ESG ratings measure how well a company manages financially relevant sustainability risks and opportunities. These ratings are used to identify leaders and laggards within sectors based on:

1. Their exposure to ESG risks.
2. Their ability to effectively manage these risks compared to competitors.

Vive uses MSCI ESG Ratings from MSCI to assess funds in terms of sustainability risks. MSCI ESG Ratings are designed to quantitatively measure sustainability risks in order to assess the extent to which a company is resistant to sector-specific sustainability risks. The MSCI ESG Ratings are categorized as:

1. ‍Leaders: AAA, AA‍
2. Average: A, BBB, BB‍
3. Laggards: B, CCC

These ratings apply to various investment categories, such as stocks, corporate loans and government bonds. Funds also receive a rating, based on the rating of the underlying companies in which investments are made.

What does Vive do in the area of sustainability risks and ESG ratings?

At Vive, we actively integrate the MSCI ESG Ratings into our investment policy to limit sustainability risks. Our Best-in-Class approach focuses on selecting funds that perform better than their comparable competitors within their sector on sustainability risk criteria. We use ESG ratings as an important measure within our selection process. These ratings help us to identify funds that fit within the standards of our policy regarding sustainability risks. Vive only selects funds with a minimum ESG rating of BBB, whereby we strive for the highest scores within each segment. The funds in which Vive invests score as follows based on MSCI ESG ratings.

2. Restriction of negative impact (PAI)

Principal Adverse Impact (PAI) criteria

One way to invest sustainably is to exclude investments with a negative impact on people and the environment. The Principle Adverse Impact (PAI) indicators have been drawn up to map the negative consequences of investments. This set of 64 measurable indicators evaluates the possible negative effects of an investment.

For investment products that indicate that they take into account the adverse effects of investment decisions on sustainability factors, it is mandatory to report on at least 18 of these 64 PAI indicators. Of these 18, 14 are core indicators that must be measured for all relevant investment products; in addition, 4 additional indicators may be included at your choice. The 14 mandatory indicators are:

• Greenhouse gas emissions
• Carbon footprint
• Greenhouse gas intensity of companies in which investments are made
• Exposure to companies active in the fossil fuel sector
• Consumption and generation of non-renewable energy.
• Intensity of energy consumption by sector with major climate impacts
• Negative consequences for biodiversity-sensitive areas
• Emissions in water
• Hazardous and radioactive waste ratio
• Violations of the UNGC and OECD guidelines
• Lack of procedures and compliance mechanisms for monitoring compliance with the UNGC and OECD guidelines
• Unadjusted gender pay gap
• Gender diversity of the board of directors
• Controversial weapons

What does Vive do in the field of negative impact and PAI?

Vive does not take into account any adverse effects of its investment decisions on sustainability factors.

This is because Vive currently only invests in unlisted investment funds. In Vive's current position, it is not yet readily possible to directly intervene or take targeted measures at the level of the underlying investments in these funds. For this reason, we cannot effectively limit specific negative effects in the area of sustainability.

What Vive does do is exclusively select funds with a structured exclusion policy. Vive has not drawn up any specific exclusions that the underlying funds must apply.

What do the underlying funds do in the field of negative impact and PAI?

The underlying funds in which Vive invests report on the specific negative effects (PAI indicators) that they limit through their own exclusion policies. Below is an overview of the negative effects that the funds in each Vive investment category limit.

3. Positive social and environmental contribution (SFDR)

Sustainable Finance Disclosure Regulation (SFDR) classifications

The SFDR provides a European framework for classifying investments based on their sustainability performance. Only investments that meet the SFDR requirements for 'sustainable investments' may be labeled as such. This regulation requires financial institutions to report transparently on how sustainability is integrated into their investment choices and enables investors to be better informed about the sustainability of investment products. SFDR divides products into three categories, based on the extent to which sustainability plays a role:

• Article 6: Investment products that do not actively integrate sustainability and generally do not provide specific information about the approach to sustainability risks within the investment strategy. These products are often referred to as “grey investments.”
• Article 8: Investment products that take into account the impact of investments on ESG criteria, without sustainability having to be the primary focus. These funds can pursue sustainable investment goals, but this is not mandatory. Article 8 funds are known as “light green investments.”
• Article 9: Investment products with an explicit focus on sustainable objectives, with the aim of measurable positive impact on the environment, climate or social area. Article 9 funds are focused on in-depth sustainability and are referred to as “dark green investments.”

This classification system helps investors distinguish the sustainability performance of investment products and provides a standardized basis for responsible investment choices.

What does Vive do in the field of positive social and ecological contribution & SFDR

Where possible, Vive only selects funds that at least meet SFDR Article 8 criteria, with a strong preference for Article 9 funds. However, these classifications do not apply to investments in government bonds. Vive's selection criteria do not set a minimum percentage for sustainable investments in accordance with SFDR, but only apply to the SFDR classification of the fund. Vive itself also falls under SFDR regulations as an investment product and is classified as an SFDR Article 8 product. Below is an overview of Vive's funds and the SFDR classifications.

What do the underlying funds do in the field of positive social and ecological contribution & SFDR

Funds with an SFDR Article 8 classification are not required to have a minimum target for sustainable investments in accordance with SFDR. Vive also does not set a minimum requirement for this. However, some of the funds in which Vive invests do have a minimum target for these sustainable investments.

Below is an overview of the objectives of the funds in which Vive invests, as well as the reported achieved percentages of sustainable investments in accordance with SFDR.

What is a sustainable investment according to SFDR?

Fund managers have internal policies and methodologies to measure whether an investment is sustainable in accordance with SFDR. There is no uniform set of instruments to classify an investment as sustainable in accordance with SFDR. SFDR legislation stipulates that an investment may be called sustainable under three conditions:

1. The investment must make a positive contribution to an ecological or social objective.
2. The investment must comply with the “Do No Significant Harm” principle, which means that the investment does not contribute to activities that can cause major damage, such as controversial weapons.
3. The company being invested in must meet standards for good governance practices with clear rules to prevent social problems.

If a fund manager determines that an investment meets all 3 of these conditions, then it is a sustainable investment in accordance with SFDR.

4. Environmentally sustainable investments (EU Taxonomy)

EU Taxonomy

And an investment is only classified as ecologically sustainable by the EU Taxonomy if the underlying activity makes a significant and measurable contribution to at least one of the six defined environmental objectives. In addition, it must also be demonstrated with data that the company does not significantly harm other environmental objectives (the "Do No Significant Harm" principle). The company must also meet social standards, such as the protection of labor rights and respect for human rights.

The six environmental objectives of the EU Taxonomy are:

1. Mitigating climate change: Reducing the company's impact on global warming by, for example, reducing greenhouse gas emissions.
2. Adaptation to climate change: Measures to manage the impact of climate change on the organization, for example by building dikes to protect against flooding.
3. Sustainable use and protection of water and marine resources: Promoting efficient water use and the protection of water quality.
4. Transition to a circular economy: Promoting recycling, reuse and reduction of waste production.
5. Prevention and control of pollution: Preventing and reducing air, water and soil pollution.
6. Protection and restoration of biodiversity and ecosystems: The conservation and restoration of natural habitats and the prevention of biodiversity loss

What does Vive do in the field of ecologically sustainable investments & the EU Taxonomy?

None of Vive's sustainable selection criteria relate to sustainable investments under the EU Taxonomy.

What do the underlying funds do in the field of ecologically sustainable investments & the EU Taxonomy?

None of the underlying funds in which Vive invests has an objective for environmentally sustainable investments in accordance with the EU Taxonomy.

Only the Corporate Loans Euro fund reports ex-post ecologically sustainable investments of 1.06% (31/12/2023) in accordance with the EU Taxonomy.

Continuous improvement and adaptation

Sustainability is a topic in continuous development. At Vive, we recognize that the standards, legislation and insights surrounding sustainable investing continue to evolve. We therefore continue to refine our sustainability policy and adapt it to the latest developments. This enables us to continuously align our strategy with the best practices within the sector.

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