Restrictions

NN's responsible investment (RI) criteria is based on our NN values and on the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises.

If we assess that companies severely and systematically violate these standards, we initiate an engagement process. When engagement is not considered feasible or is unlikely to change a company’s conduct or involvement in specific business activities, then we restrict companies as a last resort. Adding a company or product to our exclusion list removes our ability to influence environmental, social and governance (ESG) issues. 

Types of restrictions

We distinguish between two types of restrictions: conduct-based and product-based.

Conduct-based restrictions

NN expects the companies it invests in to follow relevant laws and internationally recognised standards, such as the UN Global Compact, the UN Guiding Principles on Business and Human Rights, and the OECD Guidelines for Multinational Enterprises. We believe in using engagement to create positive change and will only decide to restrict companies if engagement is not (or is no longer) feasible to change their conduct. This decision is made carefully and only where we believe it is a balanced and proportionate response.

For sovereign issuers, we apply our conduct-based criteria through a restrictions approach. Specifically, we do not invest in sovereign issuers that have arms embargoes issued against them by the UN Security Council and/or European Union. On a case-by-case basis, we may also decide to restrict sovereign issuers on other grounds.

Product-based restrictions

NN applies product-based restrictions to companies involved in the development, production, maintenance, or trade of controversial weapons such as anti-personnel landmines, cluster munitions, biological and chemical weapons, depleted uranium ammunitions, and white phosphorous weapons. Also, companies involved in nuclear weapon activities are also restricted under certain conditions. Furthermore, we also restrict companies that have demonstrable activities related to the arms trade with central governments or non-state actors under a UN or EU arms embargo. NN applies restrictions to companies involved in tobacco production, oil sands production, or thermal coal mining.

Extra restrictions

NN Group implements additional criteria for proprietary assets, including stricter exclusionary policies and thresholds for product-based restrictions, such as for nuclear weapons. We also have additional restrictions on shale oil and gas, arctic oil, and a phase-out strategy for thermal coal investments. Our Oil and Gas policy outlines strict criteria for new investments in the sector. This approach ensures we invest in sustainable business practices and reduces our exposure to fossil fuels. Lastly, we apply a comprehensive set of criteria for sovereign bonds of NN's proprietary assets invested through discretionary mandates, which covers human rights, corruption, and governance issues. For more information, please refer to the NN Group RI Framework Policy.

Restrictions decisions

NN's Responsible Investment Committee is responsible for the decision to restrict a company, which it does based on a thorough assessment. The committee consists of representatives from NN Group's Management Board and senior management team and meets at least four times a year. For controversy-based exclusions, the Responsible Investment Committee is advised by our Controversy & Engagement Council.

If a company on the restricted list show improvements in their policies and business activities, they may be removed from the list and become eligible for investment again. For an overview of restricted companies, see NN Group’s Exclusion list.