Our investment approach
Responsible yield
Within the investment department of Erste Asset Management, a team of several experts focuses exclusively on the question of sustainable investments. The investment process of Erste Asset Management is a so-called “integrative” approach that includes positive and exclusion criteria, engagement, and the best-in-class method. The core of this process is the ESG analysis, which refers to environmental, social, and (corporate) governance aspects.
Our selection process
Companies that we invest in have to meet a number of criteria. Nuclear power and arms production and trade constitute the most important exclusion criteria. Companies are also immediately divested from the fund in proven cases of corruption or child labour.
Companies that were admitted into the investment universe are managed according to a clearly structured approach and in cooperation with numerous internal and external specialists. An ethics advisory board, specifically set up for this purpose, appraises whether investments do in fact comply with sustainable criteria.
Active ownership: engagement and voting
Our sustainable activities go beyond the scope of investments in responsible companies. The active protection of owner interests is an integral part of our investment approach. We engage in dialogue with companies that we invest in or that qualify for investments. We request information via letters, conference calls, and company visits, and frequently demand improvements. These activities are called engagement. We also attend general shareholder meetings, where we vote. This approach aims at motivating companies that we invest in to engage in more sustainable business practices.
Carbon footprint of the equity portfolio
Erste Asset Management was the first investment company in Austria to commit to publishing the carbon footprint of its equity fund in September 2015. That was an important step towards transparency. The CO2 intensity is calculated annually and is published on the website of Erste Asset Management.
Our guidelines
Taking into account Environmental, Social, and Corporate Governance (ESG) standards
The Principles for Responsible Investing (PRI) of the United Nations form the basis of responsible investment at Erste Asset Management. As signatory of said PRI, Erste Asset Management undertakes to take into account the following six principles in its investment policy:
- We will incorporate ESG issues into investment analysis and decision-making processes.
- We will be active owners and incorporate ESG issues into our ownership policies and practices.
- We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will publish each report on our activities and progress towards implementing the Principles.
When selecting our cooperation partners we also make sure they have signed the PRI or at least follow them as much as possible.
No banned weapons
Erste Asset Management refrains from investment in companies that operate in the area of banned weapons. Among those are:
- Biological and chemical weapons
- Cluster bombs, including possible launch and ejection systems
- Anti-personnel mines, mine-planting systems, and other mine systems
- Nuclear weapons
- Uranium weapons
In addition, we monitor the development of new controversial weapons in cooperation with our external partners in order to potentially include them into our catalogue of criteria. Along with companies, we also exclude governments that have been sanctioned by the UN Security Council for infringement with international treaties on banned weapons.
No speculation on food
We have committed to refraining from trade in derivatives on food for all our investment funds and client portfolios. In our umbrella funds and multi-assets mandates, we will not invest in third-party funds that speculate in food.
Guideline on coal divestment
Erste Asset Management was the first investment company in Austria to commit to refrain from investments in coal mining in all actively and discretionarily managed mutual funds and portfolios. All stocks have been sold by the end of the year 2015. Thereby, Erste Asset Management further contributes to managing climate change. Even stricter rules apply to sustainable funds, please refer to the Coal Divestment Policy below.
Erste Responsible Advisory Board
The Erste Responsible Advisory Board supports Erste Asset Management both in its ESG approach and its investment process. The Board consists of internationally renowned experts who contribute know-how from their respective area to facilitate an optimal decision-making process.
Members
Dr. Anna Durnová, Ph.D. - Chair, Advisory Board expert for technology and medicine
Günter Benischek - Advisory Board expert for social affairs / NGOs
Ing. Mag. Klaus Bergsmann - Advisory Board expert for environment
Dr. Klaus Gabriel - Advisory Board expert for religion/ethics
Univ.-Prof. Dr. Gyöngyi Lóránth - Advisory Board expert for governance
ERSTE RESPONSIBLE RETURN - The ESGenius Letter
Our responsibility magazine ERSTE RESPONSIBLE RETURN - The ESGenius Letter discusses topics that are both controversial and up-to-date and informs about our responsible funds.