BNP Paribas Investment Partners (BNPP IP) has announced it will be implementing a new strategy called “Responsible Dividend”. Responsible Dividend will focus on the increasingly important theme of high-dividend-yield equities, whilst selecting companies on the basis of financial and non-financial criteria. This approach is expected to highlight opportunities that generate a yield that is both high and sustainable.
With more than EUR 3 billion in assets under management (AUM) invested in high yielding equities, BNPP IP is a recognised player in this asset class, which is achieving steady and sustained growth, driven mainly by a low-interest-rate environment.
By implementing environmental, social and governance (ESG) filters and financial and non-financial analysis criteria into its high-dividend strategy for European equities, stock selection will focus on opportunities that produce both a high and sustainable yield.
Selected stocks must meet the following criteria:
- Controlling exposure to controversial ESG issues: compliance with sector policies on controversial activities (controversial weapons, palm oil, nuclear power, etc.) and with the United Nations Global Compact;
- Compliance with ESG criteria through the exclusion of the bottom decile of companies with the lowest-rated ESG practices within each sector;
- A dividend pay-out policy that does not undermine the company’s ability to invest, through the exclusion of companies that fund their dividends with debt or reserves;
- A ‘balanced’ split in company earnings, by gradually integrating factors covering the allocation of income between shareholders, employees and reserves.
Parvest Sustainable Equity High Dividend Europe, with AUM of almost EUR 800 million, already includes this new approach in its investment strategy. This fund is designed for all international investors with access to the Parvest range of funds, which is distributed in more than 30 countries.
Gaëtan Obert, Head of Sustainable Thematic Equities at BNP Paribas Investment Partners, said: “Through the growing area of high-dividend equities, BNPP IP continues to extend its long-standing expertise in managing SRI themes. This innovative ‘Responsible Dividend’ approach marks a new stage in our strategy of offering our clients first class SRI management.”