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Belimo is a manufacturer of Heating, Ventilation, Air-Conditioning (HVAC) field devices, including sensors for monitoring key data and actuators and valves which execute software demands. These devices, known as Building Automation and Control Systems (BACS), are used in non-residential buildings and enable more efficient operation of HVAC equipment leading to positive environmental impacts.
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Objective
Understanding a potential UN Global Compact (UNGC) principle violation.
Background/Issue
In March 2023, we became aware that Belimo was red-flagged on Bloomberg as being in violation of the UNGC principles.
Our integrated company analysis considers the extent of any involvement in controversial issues or activities and overall company alignment with sustainability issues and themes.
Companies with persistently poor practices regarding equal employment opportunities, human rights and environmental management are highly unlikely to be selected for investment. We were therefore surprised to see the red flag on Bloomberg as we were not aware of any serious violations by the company of any social, environmental or human rights issues.
Actions
Further investigation showed a third party research provider had flagged the issue based on an incident in Belimoâs 2020 Annual report referring to two cases where employees/former employees brought complaints of discrimination. Whilst serious issues, in our opinion, we do not believe that they constitute a UNGC violation.
We highlighted the red-flag to the company over concerns that it was unwarranted and might unfairly harm the companyâs otherwise good reputation for management of environmental, social and governance issues. Furthermore, a UNGC violation may be a trigger for divestment by some Article 9 managers.
Outcomes
Milestone 4 - Company provides evidence that the issue is being managed in line with the policy or strategy, demonstrating concerns have been addressed.
In an email discussion with our investor relations contact, we learned that of the two discrimination cases, one case had been withdrawn and the other settled with the employee. Afterwards, the company spoke to the data provider who said they would amend the datapoint. Â
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ICAVs
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