Responsible yield
To Erste Asset Management, sustainable investments do not only mean the application of ethical beliefs, but to achieve social and ecological added value. To make this added value quantifiable, we have developed a number of sustainability indicators which compare the effects of sustainable investments with traditional indices.
The measuring results, in turn, affect investment decisions. The aim is to continuously improve the positive impact of our actions.
Make environmental benefits quantifiable
In cooperation with an external partner, we developed a methodology for the WWF STOCK ENVIRONMENT to illustrate the contribution to environmental protection made by companies in the environmental equities fund every year (Note: the contribution by the different companies is shown as total rather than as weighted by the respective portion invested in the fund).
Montréal Carbon Pledge
The Montréal Carbon Pledge was launched on 25 September 2014 at the “PRI in Person“ meeting in Montréal. This initiative is supported by PRI (Principles for Responsible Investment) and UNEP FI (United Nations Environment Programme Finance Initiative). The Montréal Pledge tries to facilitate a higher degree of transparency in connection with the carbon footprint of equity portfolios and wants to contribute to its reduction in the long run. As the first investment company in Austria, Erste Asset Management has decided to sign the agreement.
By signing the Montréal Pledge investors undertake to measure and publish the carbon footprint of their portfolio on an annual basis.
Carbon footprint of Erste AM equity funds
According to the CO2 data of our research partner MSCI ESG and Bloomberg, and our ESG research team, the CO2 intensity of the Erste AM equity mutual funds is at 63,1 percent of the footprint of the Global equity market index (June 2024). This calculation takes into account our traditional regional and country funds as well as our thematic and sector funds. Therefore the comparison with the Global equity market is only a general guide value.
The comparison with the responsible equity funds of Erste Asset Management yields interesting results. According to these calculations, ERSTE RESPONSIBLE STOCK GLOBAL, as flagship among the responsible funds, comes out with a CO2 exposure of 45,9 percent of Global equity market. This highlights the importance of title selection in the sustainability process.
Calculation method of the CO2 footprint of a portfolio
Erste AM establishes the CO2 footprint of its portfolios in a multi-step process: external rating agencies calculate the greenhouse emissions for all securities in the respective fund. Then the weighted average of the emissions of the securities held are calculated for each fund portfolio. The experts establish the total footprint of the measured equities held by Erste AM by assigning weights across all funds, with the weights resulting from the share of the respective fund in terms of total assets under Erste AM’s management. The CO2 footprint accounts for the emission of all six greenhouse gases as defined by the Kyoto Protocol. The emission of the various gases is translated into a carbon dioxide equivalent (tCO2e: tons of carbon dioxide equivalent) to ensure the different gases are comparable in terms of their harmful effects on the climate at one glance. In order to facilitate comparability between companies of different sizes the emission of the carbon dioxide equivalent is related to sales in millions of USD. This standardisation is defined as CO2 intensity.
Data sources: MSCI ESG and Bloomberg