Important Information about your Pension

The Irish Branch of KBC Insurance NV, trading as KBC Life and Pensions, offer a number of investment funds through our PRSA products. These funds are created and managed by KBC Asset Management (KBC AM), a member of KBC Group, who provide investment management services to KBC Life and Pensions. KBC Life and Pensions fully accept the sustainability policies applied by KBC AM. 

KBC AM understands sustainability risk as the risk that the return of investments may be negatively affected by environmental, social or governance risks.
Environmental risk is defined as the risk that the return of investments may be negatively affected by environmental factors, including factors resulting from climate change and factors resulting from other environmental degradation.  Social risk is defined as the risk that the return of investments may be negatively affected by social factors. Governance risk is defined as the risk that the return of investments may be negatively affected by governance factors.  

The nature of these risks varies along a time scale:

• In the short term, sustainability risk is typically event risk. Such risks typically only affect return if the event occurs.  Examples of such events include an accident (resulting in litigation for example to compensate damage to the environment); court cases and penalties (for example for failing to respect social legislation); scandals (for example when a company gets bad publicity because human rights are not upheld throughout its supply chain or because a company’s products do not uphold the ESG standards it promises).  These types of sustainability risks are deemed higher, when an issuer is less strict on ESG standards; and
• In the longer term, sustainability risk refers to risks that may develop over the long term, such as: exposure to business activities that may come under pressure due to climate change (for example parts of the automotive industry); changing product preferences from customers (for example an increased preference for more sustainable products); difficulties in recruiting; increased costs (for example insurance companies that face claims due to changing weather conditions).  As this risk develops over the long term, companies can take steps to mitigate it e.g. by changing their product offer, improving their supply chains, etc. 

In its investment policy, KBC AM takes these sustainability risks into account by:           

• (i)    defining an exclusion policy (the “Exclusion Criteria”)[1] which applies to all funds; and
• (ii)    differentiating between sustainable and responsible investing (“SRI”) funds and other conventional funds, with stricter ESG standards and hence lower sustainability risk for the SRI funds.

The investment policy of KBC AM continuously assesses the underlying investments at issuer level, but also (where relevant) at the level of asset allocation and regional or sectoral allocation level. These regular reviews consider sustainability risk as one of several elements that may affect return. The SRI research team assigns an ESG risk rating to most companies included in the common indices MSCI World and MSCI Emerging Markets and a selection of small and midcap companies based on inputs from an ESG data provider. The ESG risk ratings are shared internally with portfolio managers and strategists so they can use this as a factor in the investment decision process. 
The investment policy does not merely frame permissible investments by reference to the financial position of the business or government but also the societal impact of the company or government in question. KBC AM is constantly monitoring its investment policy and its application to its business as a key part of its drive to deliver long-term sustainable investment returns for its clients. 

As part of its commitment to long-term sustainable investment, KBC AM applies additional SRI criteria to its SRI funds. These are described in its SRI policy.

Please note that KBC AM`s passive investment funds, structured funds and funds investing in third party funds may not apply all the Exclusion Criteria. MyAutoinvest, the default investment strategy for KBC PRSAs is primarily a passive investment strategy.

Ethical Standards
The KBC Group, to which KBC AM belongs, is committed to the following international business codes and KBC AM’s investment policy and processes are aligned with these commitments: 

• United Nations Environmental Programme Finance Initiative (UNEP FI) Principles for Responsible Banking;
• The Collective Commitment to Climate Action, by which the KBC Group committed itself to stimulate the greening of the economy as much as possible and thus to limit global warming to well-below 2°C, striving for 1.5°C, in line with the Paris climate agreement;
• Tobacco-Free Finance Pledge which encourages financial institutions to divest from the tobacco industry; and
• United Nations Principles of Responsible Investments.

The Irish branch of KBC Insurance NV, trading as KBC Life and Pensions, is a member of KBC Group. 

The KBC Group Remuneration Policy is a framework for a sound remuneration practice within KBC Group worldwide in line with the corporate sustainability strategy and considering the European and different national legislations aiming sustainability (including article 5 of  Regulation 2019/2088 on sustainability related disclosures in the financial services sector).
The KBC Group Remuneration Policy aims to ensure consistency with and to promote sound and effective risk management (e.g. “sustainability” is a specific parameter for the evaluation of KBC Senior Management).

Furthermore, the KBC Group Remuneration Policy aims to prevent incentives for excessive risk taking and ensures that the payment of variable remuneration is aligned with the long-term interests of KBC Group (e.g. Variable remuneration should not induce risk-taking in excess of the risk appetite of the different entities of the KBC Group and where relevant, be based on risk- and liquidity-adjusted profit, not on gross revenues. Additionally, ex ante and ex post risk adjustments to variable remuneration are possible in order to guarantee the sustainability strategy).