Responsible Investment

We integrate responsible investment into our investment processes to complement risk management, seize opportunities, and strengthen decision-making.

Through these actions, we aim to generate value for the investors of our funds by fostering investments that promote sustainable development and address the economic model’s needs in the long-term horizon.

In line with this commitment, two of our subsidiaries are signatories of the United Nations' (UN) Principles for Responsible Investment (PRI), an initiative working to establish a global sustainable financial system that contributes to a more prosperous future:

 

  • Afore XXI Banorte: Our pension fund became the first PRI signatory in Mexico.
  • Operadora de Fondos Banorte: Our asset management firm has been a PRI signatory since 2020.

To learn more about Afore XXI Banorte ESG strategy, click here.

Operadora de Fondos Banorte

As one of the leading investment asset managers in Mexico, through the implementation of responsible investment, we aim to encourage the best sustainability practices in the stock market.

We have a strategy aligned with the PRI principles, which focuses on incorporating ESG factors into investment decisions to improve risk management and achieve sustainable long-term results.

To uphold our commitment to promoting and implementing the best practices in the investment processes with a vision of sustainability and responsibility, we have implemented various responsible investment strategies: ESG analysis, ESG integration, positive and negative selection, and thematic investment, which are complemented by an active ownership strategy.

Responsible Investment Strategy

 

ESG Analysis

ESG Assessment of Equity Instruments

We have an internal methodology for the ESG assessment of equity instruments, based on an analysis of the transparency of ESG factors of the issuers that make up each of Operadora de Fondos portfolios, as well as a reputational risk evaluation of these issuers. Below are some of the criteria we consider important for each factor:

Environmental Factors

Social Factors

Corporate governance Factors

Biodiversity

Land use

Greenhouse gas (GHG) emissions

Climate change

Energy use

Waste management

Water management

Community relations

Investor relations

Responsible products and marketing

Human capital management

Human rights

Diversity and inclusion

Labor standards

Union relations

Structure and size of the Board of Directors

CEO duality

Executive compensation schemes

Ownership structure

Shareholder rights

Voting procedures

Transparency

Anti-corruption measures

ESG Assessment of Fixed-Income Instruments

On the other hand, our internal methodology for the ESG assessment of fixed-income instruments evaluates the ESG profile of issuers using our methodology for equity assets, as well as the key criteria and components of labeled bonds, in accordance with the corresponding Principles established by the International Capital Market Association (ICMA). Based on the results obtained, we seek to reach agreements with issuers to improve their ESG performance.

ESG Integration

We incorporate Environmental, Social, and Corporate Governance (ESG) factors into investment processes, as they are fundamental for investment decision-making, representing risks or opportunities for the financial sector.

Positive and Negative Screening

Likewise, within the  product offering managed by Operadora de Fondos Banorte, we offer a relative management equity fund, whose investment strategy is generated through a quantitative model that, among other factors, uses ESG factors within a positive screening process.

Thematic Investment

We participate in thematic investments in financial instruments whose resources contribute to sustainable development, such as bonds, investment funds, and labeled ETFs.

Active Ownership

We establish relationships with the companies in which we invest by initiating dialogues and establishing bilateral commitments. These efforts aim to enhance performance and increase transparency regarding ESG factors, enabling us to jointly advance the sustainability agenda.

Additionally, we seize opportunities for collective engagement aligned with the focus of our strategy, adding value to our individual engagements. In this regard, as investor signatories of the Carbon Disclosure Project (CDP), we participate in the collective engagement campaigns promoted by this initiative.

We promote the Principles of Responsible Investment in the stock market

Since we became signatories of the Principles for Responsible Investment (PRI) initiative, we have worked toward establishing a global and sustainable financial system, encouraging the adoption of the six Principles and fostering collaboration for their implementation.

To reaffirm our commitment and enhance transparency, we have reported our progress in implementing the Principles of Responsible Investment over the past three years, reflecting the advancements we have made as well as a work plan to continue managing the impacts that environmental, social, and governance (ESG) issues have on our investments.

We released the Operadora de Fondos 2024 Annual Responsible Investment Report, available to our investors and stakeholders, providing valuable information on current practices and strategies, as well as the achievements in responsible investment matters. Our report is prepared in accordance with GRI standards and reports SASB standards for the asset management and custody activities sector. Similarly, the report responds to our commitment as PRI signatories.

 

Contributing to the Sustainable Development Goals

Through active risk and opportunity management, as well as strong and transparent collaboration with the companies we invest in, the investors in our funds, and other stakeholders, we are working to generate a positive impact on the community and promote long-term sustainable development.

 

 


We promote the full and effective participation of women and equal leadership opportunities at all decision-making levels in the companies within our portfolios.

As part of Operadora de Fondos Banorte's commitment to combating climate change, we encourage the companies in our portfolios to significantly increase the proportion of renewable energy within their overall energy sources.

We are committed to promoting and protecting human rights in all our operations and activities. We recognize the fundamental importance of respecting human rights in every aspect of our business, from the management of our investment funds to our relationships with employees, investors, suppliers, and other stakeholders.

 

 

We assess whether the companies in our portfolios ensure equal opportunities and work to reduce inequality.

 

 

 

 

 

We encourage companies to adopt sustainable practices and incorporate sustainability information into their reporting cycle.

We recognize the urgency and importance of addressing global climate challenges and we are committed to promoting the transition to a low-carbon, climate-resilient economy. This commitment is achieved through the promotion of responsible business practices and investment in assets that actively contribute to mitigate climate risks and create a more sustainable environment.

Climate Change

To understand our indirect carbon footprint, we calculate Scope 3 emissions associated with the investments in the entire equity and fixed income portfolios, following the GHG Protocol methodology.

To calculate financed emissions from stocks, REITs, and corporate debt within Operadora de Fondos Banorte, we considered the Scope 1 and 2 GHG emissions of the issuers we invest in, except for oil, gas, and mining sectors, which include Scope 3 emissions. To quantify the financed emissions of sovereign bonds, we use Mexico's consumption-based emissions, where emission intensity refers to the amount of CO2 emitted per GDP unit, adjusted for Purchasing Power Parity (tCO2e/GDP adjusted for PPP). The sources used for the calculation include internal databases, public reports from issuers, Refinitiv, and CDP.

The reported data quality is the result of a weighted average of the balance of investors/issuers that compose the asset classes, based on their respective data quality. The PCAF data quality scale is used, where data quality 1 represents the highest quality, and 5 represents the lowest quality.

Responsible Marketing

RESPONSIBLE MANAGEMENT OF INVESTMENT SERVICES

At GFNorte, Casa de Bolsa and Banco offer investment services, and a wide range of investment products designed to meet the needs and profiles of our clients, focusing on transparency, diversification, and personalization. These investment services are structured under two main modalities: advisory and non-advisory, tailored to different investment horizons, risk tolerance, and investment objectives.

Through our investment services guides, available on Casa de Bolsa and Banco websites for free public consultation and download, we ensure that clients have clear and detailed information on each financial available according to  the contracted investment service. This includes key features such as investment objectives, associated risks, and diversification policies, promoting informed decision-making. Additionally, our policies guarantee that, in the Investment Advisory and Investment Management services, transactions are reasonable and consistent with each client’s profile, validating concentration limits by instrument, investment horizon, and diversification policy.

CLIENT PROFILES AND GENERAL FRAMEWORK OF ACTION

In advisory investment services (Investment Advisory and Investment Management), to facilitate access to appropriate financial products, we offer different client profiles based on their knowledge and experience, financial situation and capacity, and investment objectives. These profiles range from the “capital preservation” profile, with lower risk exposure, to the “aggressive” profile, with higher risk exposure.

These categories are designed for clients with varying levels of financial knowledge and experience, ensuring that their transactions align with their investment profile. Additionally, for the Investment Management service, transactions are consistent with their general framework of action.

Responsible Investment Policies

Responsible Investment Policy

 

  
Transparency
Responsible Investment Annual Report
Transparency