In addition to the fundamental principles above, the following rules apply to investment funds that promote environmental or social characteristics or a combination of such characteristics pursuant to Art 8 of Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability‐related disclosures in the financial services sector (Disclosure Regulation):
Through the integration and the associated reduction of ESG risks in the security selection process, the risk profile of the respective investment fund is improved through the lower weighting of non-sustainable or less sustainable securities in the portfolio, and it is ensured that the investment fund makes an active contribution to the avoidance of social and ecological problems. One example is a typically improved carbon footprint. The improved risk-adjusted return opportunities by integrating ESG risks into the investment decision are supported by a large number of scientific studies.
The internal ESG rating model "ESGenius" provides all fund and portfolio managers with access to relevant ESG information on their portfolios and individual securities.
Standard-based screening assesses investments for their conformity with certain international standards so as to manage and limit sustainability risks in the portfolio. The exclusion criteria of the Management Company’s investment funds take the relevant international standards into account, ranging from human rights and the International Labour Organization (ILO) standards to the UN Global Compact. Companies that do not adhere to these requirements are strictly excluded to avoid the investment fund being complicit in the violation of these international standards.
The following tools can also be used:
The Management Company’s exclusion criteria set strict ethical boundaries. These exclusion criteria serve not only to meet the high ethical requirements of the investors, but to also expressly prohibit investments in socially, economically, and environmentally relevant fields such as nuclear energy, petroleum products, and the generation of electricity from coal due to the associated negative impacts or risk profile. This makes a direct contribution to improving the social and environmental footprint.
Best in class
Under a best-in-class approach, ESG criteria are applied to identify the pioneers within a specific sector. This approach allows a sector-neutral investment strategy while partially reducing sustainability risks.The ESG analysis using the Management Company’s ESGenius model evaluates companies based on their SRI/ESG risk profile. Applying a best-in-class approach limits the investment universe to the best companies from an ESG perspective and ensures compliance with the most stringent sustainability standards. Over the medium term, this contributes to improving the sustainability management of the target companies as all sustainable investors direct the capital flows. The success of this approach is borne out by a clear increase in the average rating, especially in the European market.