ROBO Global ’s Environmental, Social, and Corporate Governance PolicyOverview
ROBO Global® is committed to maintaining and improving a research and investment approach that incorporates Environmental, Social and Corporate Governance (ESG) aspects. This Environmental, Social, and Corporate Governance Policy presents our current approach and is expected to evolve over time. ROBO Global®’s research and investment professionals are responsible for the analysis of ESG aspects for each company considered for potential investment or index inclusion. ROBO Global® observes and may exclude companies if there is an unacceptable risk that the company contributes to or is responsible for serious human rights violations, severe environmental damage, and other particularly serious violations of fundamental ethical norms, including the production of weapons that violate fundamental humanitarian principles through their normal use.Background
Robotics, Automation and Artificial Intelligence (or RAAI) is a global growth trend happening right now. The benefits and efficiencies from RAAI will positively impact many aspects of our business, service and consumer lives. Globally we are faced with many social challenges including: aging populations, healthcare systems at capacity, dangerous pollution levels, over demand for scarce resources, increasing wage inflation and general safety/health concerns. At the core RAAI is about tackling many of these social challenges by creating efficiencies, flexibility and assisting human safety and general well-being.
Examples where RAAI is already used today include: caring for our elderly, improving productivity of farmland, drones assisting in search and rescue missions, home companion robots educating children, using exoskeletons to help injured or disabled people walk, using drones to inspect bridges and 3D printing prosthetic arms for children. These are all areas of daily life where RAAI has improved efficiency, safety, quality of life and sustainability at reduced costs.
Technologies such as machine vision, motion sensors, artificial intelligence and navigation algorithms are enabling robots to perform increasingly sophisticated and delicate knowledge-based work and improve the levels of automation. This widens their use to an incredible array of products and services across that will continue to benefit society at large. For investors and society, the biggest gains and benefits in robotics and automation still lie ahead both financially and socially.
In the absence of a benchmark industry classification system for identifying companies engaged in the global RAAI industry, the ROBO Global® Industry Classification was created by ROBO Global® in consultation with industry experts from its Advisory Board.
The ROBO Global® Industry Classification identifies sub-sectors of high relevance and high growth to the RAAI Industry, and will expand over time. These sub-sectors are intended to capture companies throughout the “value chain”. The value chain includes not just the manufacture and deployment of robots and automated systems but also the enabling technologies such as sensing, computing, software, motion control, among others. To be eligible for potential index inclusion companies must first pass through the following three-tiered process which includes our Socially Responsible Investing Policy:
“ROBO Global® observes and may exclude companies if there is an unacceptable risk that the company contributes to or is responsible for serious human rights violations, severe environmental damage, and other particularly serious violations of fundamental ethical norms, including the production of weapons that violate fundamental humanitarian principles through their normal use.”Guidelines
ROBO Global® is committed to responsible investment and encourages its partners to do the same. We believe that Environmental, Social and Corporate Governance issues can be important drivers of long-term shareholder value creation and that companies that successfully manage ESG risks may deliver risk-adjusted outperformance.
Environmental, Social and Corporate Governance aspects are systematically incorporated in ROBO Global® ’s analysis and industry classification inclusion process. Our research and investment professionals utilize internal and external tools and resources to analyze ESG aspects.
Corporate governance standards and best practices vary significantly around markets and regions of the world. Our approach reflects the widely-accepted standards of the Organisation for Economic Co-operation and Development (OECD) Principles of Corporate Governance, as well as the United Nations Principles of Responsible Investment (UN PRI).
ROBO Global® observes and may exclude companies from its investment universe if there is an unacceptable risk that the company contributes to or is responsible for:
- serious human rights violations;
- severe environmental damage;
- gross corruption; and
- other particularly serious violations of fundamental ethical norms including the production of weapons that violate fundamental humanitarian principles through their normal use.
The decisions are made by the ROBO Global® team with oversight from the Index Management Committee based on recommendations from the Director of Research.
The Index Management Committee is composed of a chairman appointed by ROBO Global® and of ROBO Global® professionals. Additionally, there is independent expert representation from the index industry, and one staff member from the index calculation agent is invited to attend in a non-voting capacity.
The Index Management Committee assesses on a quarterly basis whether the basis for observation or exclusion in the Industry Classification still exists and may recommend that an observation or exclusion decision be revoked.
In assessing such risk, we include the probability of future norm violations, the severity and extent of the violations and the connection between the norm violation and the company. ROBO Global® publishes its decisions pursuant to these guidelines in its quarterly rebalancing updates.
The ROBO Global® Environmental, Social and Corporate Governance Policy has been adopted by the ROBO Global® management team and is a continuous and long-term process that will evolve over time to reflect further enhancements.
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The ROBO Global® Robotics and Automation Index and the ROBO Global® Robotics and Automation UCITS Index (the “Indices”) are the property of ROBO who have contracted with Solactive AG to calculate and maintain the Indices. The Indices are not sponsored by Solactive AG or its affiliates. Neither Solactive AG, nor any of their affiliates will be liable for any errors or omissions in calculating the Indices. Closing prices for the Indices are calculated by Solactive AG based on the closing price of the individual constituents of the index as set by their primary exchange. Historical performance illustrations in the Indices are based on a backcast calculation. A backcast calculation can be materially different from a backtest analysis.
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