Sustainable Financial Investment Sustainable Financial Investment
Sustainable Financial Investment

Learn more about our Methods

Our sustainability methodology is based on a transparent, multi-stage process that defines both exclusion criteria and minimum requirements for companies and sovereigns. We obtain the underlying data from MSCI ESG Research, one of the world's leading providers of sustainability analysis and globally recognised indices and indicators. Let us convince you that the use of our sustainability methodology is a further building block in our efforts to do even better justice to our responsibility towards you and society.

Our minimum standards

Our Minimum Standards provide a basis for or Asset Management. They involve excluding companies from the investable investment universe that do not meet the minimum ecological, social and ethical standards we have set.

This includes shares and bonds of companies that are active in the field of controversial weapons or nuclear weapons or that show strong entrepreneurial controversies, meaning serious misconduct in the environmental, social and corporate governance areas. In addition, companies active in thermal coal mining or energy production from thermal coal are excluded. With regard to the assessment of environmental damage, we hereby pay particular attention to reducing the carbon footprint of our investments.

In the Warburg Group's ESG committee, which combines the expertise of Warburg Bank's Portfolio Management together with Warburg Invest and Marcard, Stein & Co, all exclusions are continuously reviewed and adjusted if necessary. In order to make well-founded assessments of the severity of controversies, active dialogue is sought with selected companies.

Focused sustainability strategies

Warburg's Portfolio Management looks at the sustainability performance of a country or company using the MSCI ESG rating. This aggregates environmental, social and ethical aspects together into a rating on a scale from AAA to CCC. Countries or companies with a rating lower than BBB are excluded from the sustainability 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.

The sustainability methodology for the selection of companies is set up as a multi-stage filter process. Absolute and relative exclusion criteria for business activities are combined with minimum ratings and quality standards for dealing with controversies. The absolute exclusion criteria include controversial business areas such as the production of alcohol, tobacco products, weapons of any kind and the generation of electricity from nuclear energy. In addition, companies are excluded from an investment if they are rated as below average in terms of sustainability by the MSCI ESG rating in a sector comparison. If a company violates accepted conventions such as the UN Global Compact, it will also not be invested in.

In the area of impact investments, we allocate funds that grant microfinance loans in addition to green bonds.

We show our clients the sustainability characteristics of their assets in the form of a supplementary overview, which we integrate into our regular reporting.
We believe that changes in the sustainability performance of companies can serve as valuable indicators of their reputation, operating environment and ultimately the performance of their shares.

Adding value for investors

We are convinced that investments that comply with ESG criteria are more stable and hence more successful in the long term. A well-balanced, ESG-compliant portfolio offers opportunities for increased returns, and may reduce volatility and generate an improved risk-adjusted return. ESG-compliant investments in securities still involve risks. Nevertheless, in our view there are clear arguments in favor of an ESG approach, and more and more investors are acting accordingly. This is not a short-term trend, but a fundamental shift in investor behavior. Key aspects of this are that investors today take extremely conscious investment decisions, set greater store by transparency, and want to make a positive contribution with their investments. We would be happy to help you with this.

We have your risk in mind

A significant risk of sustainable investment is so-called "greenwashing"; this involves making misleading or unsubstantiated statements regarding the sustainability of investments. Our strict implementation of the sustainability criteria described on this page rules out greenwashing.

ESG-compliant investments in securities are also associated with risks. Nevertheless, in our view, there are clear arguments in favor of including sustainability criteria, and more and more investors are acting accordingly. This is not a short-term trend, but a fundamental rethink in the behavior of investors.

A key aspect here is that today's investors are making very conscious decisions, attaching greater importance to transparency, and want to make a positive contribution with their investments. We would like to support them in this.


Date of update: 22.12.2022

Date of first publication: 01.06.2020

Daniel Hupfer
Head of Portfolio Management