All in all, we regard the sustainability criteria as an important part of risk management for managing the assets entrusted to us and in the context of running our own company.
Why invest sustainably?
- Environmentally responsible behaviour pays off, as environmentally conscious management saves on high energy, water and wastage costs over the long term.
- Social compatibility yields success, as companies that behave responsibly towards their staff and the environment create good business conditions and reduce entrepreneurial risks.
- Based on best-practice principles, corporate governance strengthens shareholder rights, increases transparency, and aims for a balance between management and control.
Investment process: portfolio construction and selection (I)
Do you prefer to invest in sectors with a low environmental impact?
Sustainability improves if investments in sectors with a high environmental impact (sectors: commodities, energy, utilities) are avoided.
Controversial activities/exclusion criteria
We examine the basis of individual investments (equities, funds and bonds) to determine whether companies are involved in controversial activities (breaches of laws, contracts or conventions, their frequency and relevance).
Taking account of analysis data, we look into every company in the portfolio to ascertain whether it is fulfilling defined negative criteria.
Do companies or asset managers take their responsibility seriously?
For example, we check whether individual fund managers have specified guidelines on awareness of their responsibility as investors. Communication by the fund manager with the portfolio companies about environmental, social and good corporate governance is seen in a positive light. Even the exercising of voting rights in these areas can set a fund apart, for example.
Is all key information available in the public domain?
We think that transparency is a fundamental pre-requisite for every type of selection. Failure by fund managers to share information transparently about their products, orientation, strategy and methodology brings down the rating.
Our decision-making principles focus on assessments/ratings by third parties or specialist providers, our own analyses, and direct contact with companies and fund managers.