Learn more about our Methods

Our portfolio management team assesses the ESG profile of a country or company using, among other factors, the MSCI ESG Rating. It combines environmental, social and governance factors into a rating on a scale from AAA to CCC. Countries and companies rated below BBB are excluded from the ESG investment universe.

The assessment of countries is based on twelve criteria. We refer to globally recognised institutions such as Freedom House, the UN or Transparency International. Important criteria are climate protection, corruption, money laundering, military expenditure and the death penalty.

Our ESG methodology for selecting companies follows a multi-stage process. Absolute and relative exclusion criteria for business activities are combined with minimum rating thresholds and quality standards for addressing corporate controversies. The exclusion criteria apply to controversial business activities, including alcohol, tobacco, weapons and nuclear energy. Companies with an MSCI ESG Research rating below BBB — and therefore a significantly weaker ESG profile than their industry peers — are also excluded. We likewise do not invest in companies that violate recognised standards such as the UN Global Compact.

Greenhouse gas emissions are a key consideration in our investment process, as they contribute to global warming, rising sea levels and more extreme weather conditions. From an economic perspective, high carbon emissions may result in higher regulatory costs and even impairments if certain business activities become unprofitable or are prohibited. However, our objective is not simply to exclude companies with high carbon intensity, as these companies may have the greatest potential to reduce emissions if they take appropriate action. We therefore combine carbon intensity with the MSCI Carbon Emissions Management Score. This score indicates whether a company’s management has recognised carbon emissions as an issue and established processes to avoid or reduce them. This allows us to consider companies that currently report high emissions but can demonstrate that they are working effectively to reduce them as potential investments.

Our focused ESG strategy takes the principal adverse impacts on environmental, social and governance factors into account. We also aim to maintain a minimum proportion of investments that meet the applicable SFDR criteria. For positions classified under the SFDR definition, we disclose the definition applied, the assessment methodology and the impact indicators used. We show our clients the environmental, social and governance characteristics of their managed assets in supplementary overviews integrated into our regular reporting.