Sustainability Information ABANCA Futuro Portfolio
The ABANCA Futuro Portfolio is a financial product that promotes both environmental and social characteristics, but despite not having a sustainable investment objective, it is committed to investing at least 5% in sustainable investments.
The portfolio follows an investment strategy called the “Alpha 360 model,” in which some of the best CIS, both from international managers and the ABANCA brand, are selected with the aim of consistently outperforming the market. The portfolio combines investments in CIS with different investment approaches, geographies, and themes, focusing on investments in megatrends such as innovation, demographics, and sustainability. Its objective is to achieve positive returns in the medium and long term by investing responsibly and contributing positively to the environment and society.
Additionally, the product takes into account the principal adverse impacts on sustainability factors that its investments may cause.
The portfolio will invest at least 50% in investments “Aligned with environmental or social characteristics.” To promote these environmental and social characteristics, the following extra-financial criteria are applied to select its CIS:
Exclusion criteria: The portfolio will invest mainly (at least 75%) in CIS classified as Article 8 or 9 under SFDR, their management company must be a signatory of the UN PRI, and exposure to controversial activities as defined in ABANCA’s Sustainable Investment Policy is limited to a maximum of 5% of the total portfolio investments.
Evaluative criteria: The portfolio positions are assessed based on quantitative ESG Risk and CO2 emissions indicators provided by the ESG data provider, for which ABANCA has established minimum thresholds or scores.
Additionally, the portfolio is committed to having at least 5% in sustainable investments through the minimum commitment that each CIS indicates in its sustainability annex, which may contribute to objectives such as reducing greenhouse gas emissions, energy efficiency, effective resource management, protection of terrestrial and marine ecosystems, responsible production and consumption, among others.
For management, mainly external sources are used, such as sustainability data providers and information provided by the management companies themselves.
Although some environmental, social, and governance (ESG) information providers may, in certain cases, provide estimated data, this does not constitute a limitation nor does it affect the promotion of the portfolio’s characteristics.
ABANCA’s long-term engagement policy as a shareholder does not apply when the investment is made through CIS, as is the case with the ABANCA Futuro portfolio. Nevertheless, the management team maintains an active dialogue with the management companies of the CIS in which it invests.
The portfolio has not designated any benchmark index.
This financial product promotes environmental or social characteristics, but does not have a sustainable investment objective. Nevertheless, it will maintain a minimum of 5% of its portfolio in sustainable investments through the minimum commitment that each CIS indicates in its sustainability annex, which may contribute to objectives such as reducing greenhouse gas emissions, energy efficiency, effective resource management, protection of terrestrial and marine ecosystems, responsible production and consumption, among others.
The portfolio promotes environmental and/or social (ESG) characteristics and incorporates sustainability into the investment process by aligning its investments with practices and commitment to the following ESG factors:
Environmental: reduction of greenhouse gas emissions and carbon footprint, responsible use of natural resources through measures that help reduce the impact on the planet’s biodiversity, proper waste management and promotion of the circular economy, and use of renewable energies.
Social: recognition and application of global regulations regarding human rights, labor standards in supply chains, relationships with local communities and society in general, strong policies for human capital care, social and gender diversity, inclusion, job creation, and responsible management of clients and products.
Corporate Governance: commitment of the board of directors to responsible and sustainable management of companies, political rights, transparency or corporate ethics, appropriate distribution of independent, diverse members with sufficient technical training for company management.
The portfolio invests exclusively through CIS.
For portfolio management, an investment strategy called the “Alpha 360 model” is followed, in which some of the best CIS, both from international managers and the ABANCA brand, are selected with the aim of consistently outperforming the market. The portfolio combines investments in CIS with different investment approaches, geographies, and themes, focusing on investments in megatrends such as innovation, demographics, and sustainability. Its objective is to achieve positive returns in the medium and long term by investing responsibly and contributing positively to the environment and society.
The portfolio will invest at least 50% in investments “Aligned with environmental or social characteristics,” of which at least 5% will be invested in sustainable investments, whether with an environmental or social objective, without pre-determining a minimum in each category.
All exposures are always indirect, as the portfolio does not invest directly in companies, issuers, etc., but through CIS.
The monitoring of the environmental and social characteristics promoted by the portfolio is carried out through a dual measurement process. On the one hand, as a portfolio that invests through collective investment schemes (CIS), information obtained from the CIS themselves is used, such as the management companies’ adherence to the United Nations Principles for Responsible Investment (UN PRI), their classification under Regulation (EU) 2019/2088 (SFDR), or the information they provide regarding their minimum ESG promotion percentages, sustainable investment according to SFDR, percentage of alignment with taxonomy, or whether they take into account principal adverse impacts and, if so, of what type (environmental, social, or governance).
On the other hand, the management team of Abanca Corporación Bancaria, S.A. (ABANCA) uses the following sustainability indicators obtained from its external ESG data provider: ESG Risk, CO2 emissions, and exposure to controversial activities as defined in ABANCA’s Sustainable Investment Policy.
To promote environmental or social characteristics, the portfolio applies the following extra-financial criteria to select its CIS:
Exclusion criteria: The portfolio will invest mainly (at least 75%) in CIS classified as Article 8 or 9 under SFDR, their management company must be a signatory of the UN PRI, and exposure to controversial activities as defined in ABANCA’s Sustainable Investment Policy is limited to a maximum of 5% of the total portfolio investments.
Evaluative criteria: The portfolio positions are assessed based on quantitative ESG Risk and CO2 emissions indicators provided by the ESG data provider, for which ABANCA has established minimum thresholds or scores.
For portfolio management and the promotion of its environmental and social characteristics, various data providers are used, such as Clarity AI, MorningStar, and Bloomberg. In addition, information is obtained directly from management companies through different methods such as due diligence questionnaires, CIS sustainability annexes, or the EET (European ESG Template).
By comparing the data received from different information sources, data quality is ensured and ABANCA has sufficient information.
Additionally, ABANCA carries out specific dialogue actions with management companies aimed, among other things, at cross-checking information provided by both the providers and the management company itself, and obtaining additional information when deemed necessary.
The information received from the different sources is analyzed by ABANCA both prior to the selection of the CIS that are part of the portfolio and on an ongoing basis.
Since a large part of the data used is provided by external providers, it is not possible for ABANCA to know the proportion of data that has been obtained through estimation.
ABANCA is aware that some sustainability data providers base both the information provided and their ratings or scores on estimates.
However, the information is not obtained solely from data providers but also directly from the management companies themselves. In addition, comparisons are made between the data provided by the different sources and active dialogue is carried out with the management companies.
Therefore, ABANCA considers that this does not constitute a limitation and does not affect the way in which the environmental and social characteristics of the portfolio are promoted.
The current limitations are due to the lack of information in the market regarding some sustainability-related issues, since there is currently a very high percentage of companies that are not required to provide sustainability information.
The entity’s investment team has control processes in place where the compliance with the aforementioned indicators is periodically analyzed to ensure that the portfolios meet the commitments of ESG risk integration, promotion of sustainable characteristics, and percentage of sustainable investment. More specifically, controls related to the alignment of portfolios with clients’ sustainability preferences are carried out when there are changes in the portfolios, and those related to compliance with sustainability characteristics aligned with SFDR disclosure regulations are carried out firstly, prior to the entry of any new asset into the portfolio, and secondly, on a quarterly basis. In addition to the aforementioned measures, the portfolio takes into account the principal adverse impacts (PAI) on sustainability factors, whose objective is to improve the sustainability profile of the managed portfolios and to avoid or reduce, as far as possible, potential controversies regarding sustainability over time. By considering PAI, the aim is to identify, prioritize, manage, and, when possible, mitigate the negative impacts that may be generated on the environment and society.
ABANCA has an Engagement Policy that aims to establish the general principles and necessary criteria to ensure its proper engagement as a shareholder in listed companies in which it invests. However, this policy only applies when investing directly in companies and not when the investment is made through CIS, as is the case with the portfolio.
Notwithstanding the above, the ABANCA management team has established internal procedures for active dialogue with management companies with the aim of, on the one hand, cross-checking the available information and requesting additional data and, on the other, being able to discuss certain issues related to the sustainability strategy of the CIS in question.
The portfolio has not designated any benchmark index.
Statement on the principal adverse impacts of investment decisions on sustainability factors
ABANCA will take into account the principal adverse impacts that investment decisions may have on sustainability factors, at the entity level and, therefore, in aggregate for all portfolios managed by ABANCA. In accordance with Article 4 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector.
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Non-consideration of the adverse impacts of investment decisions and investment advice
When providing investment advice, ABANCA will not take into account the principal adverse impacts on sustainability factors, as, as a financial advisor, it does not have a due diligence policy in relation to such adverse impacts. For their part, ABANCA Vida y Pensiones and ABANCA Mediación will also not take into account the principal adverse impacts on sustainability factors as they do not have a due diligence policy in relation to such adverse impacts.
