Sustainability has always been a fundamental component of our investment philosophy, which has been designed for long-term investing. Sustainable means long-term, stable and future-oriented.
We operate based on a comprehensive understanding of sustainability which pursues a long-term oriented approach for the well-being of all interested parties. After all, a company can only achieve lasting success if it serves its customers well, treats its employees and business partners fairly, makes adequate investments, pays taxes and avoids harming the environment. Ecology and social responsibility are the prerequisites for lasting economic success. You cannot have one without the other.
The quality of our investments is reviewed as part of our fundamental in-house analysis process, at which time we strive to work out how sustainable the business model of a company is: how do things stand with competitiveness and profitability? How do things stand with stability and growth? Is there enough capital on the balance sheet to allow for a flexible approach in both goods times and bad? Sustainable management needs profitable companies.
We also evaluate environmental and social issues along with good corporate governance matters to see what the opportunities and risks are. Each of the three criteria for sustainability, also referred to as ESG (Environmental, Social and Governance) factors is considered from the perspective of a long-term investor so as to ensure that none of the aspects will have a negative impact on the value of the company. As part of this process, we look particularly closely at ethical corporate governance. We feel it plays a crucial role in the company's ability to grow in a positive way and allows conclusions to be drawn concerning how well all of the ESG factors are being taken into account.
Sustainability is more than an environmental veneer and cannot be measured using rigid templates. It needs to be put into practice by companies and all stakeholders alike and must be thoroughly understood. Sustainable investment therefore starts with people – primarily those who make important decisions for a company and who shape the corporate culture and value system.
Corporate activity does not take place in a vacuum, but rather in a world that is in flux and affected by ever changing environmental conditions, political relations and living conditions. And yet, at the same time, corporate activity is also being shaped by the world. They both interact with one another. Forward-looking entrepreneurs and managers recognise this. They tackle these issues and actively prepare for change. Otherwise, sustainable management [i.e. long-term corporate success] is not possible – whether because resources are no longer available, products are no longer being bought or because the environment has changed.
Corporate activity has a diverse and often long-lasting impact on global supply chains, global markets or on society as a whole. As an investor, we therefore take a very close look at the long-lasting impact of corporate activity in relation to the environment, social standards and good corporate governance. And we do this on a global scale, not just "at home". Companies that do not operate on a sustainable basis are not successful in the long term, since what they do is not based on a solid foundation.
Corporate activity is defined by people. As an investor, we therefore look mainly at the quality of the management. We ask questions which go above and beyond pure financial analysis: do the board members act responsibly? For example, is the remuneration system sustainable? In other words, are the financial incentives geared towards lasting corporate success? How far do managers view their responsibility as going beyond their time in that position?
We are convinced that interacting closely with business leaders and actively exercising voting rights are important prerequisites for successful, sustainable investing. Handling our rights and duties in a responsible way therefore plays a central part in our investment process and impacts the quality of our investments.
As part of a dedicated active-ownership process, we observe and analyse how our investments perform. Whenever critical issues arise which may have a negative impact on business performance, we discuss them with management. We consider ourselves to be a constructive sparring partner that makes meaningful suggestions and helps management with implementation.
We have signed the United Nations Principles for Responsible Investment (PRI for short). They place an obligation on all members to take environmental and social issues and aspects of good corporate governance into account when making investment decisions and to integrate active engagement and the exercising of voting rights as a shareholder. These objectives are consistent with our conviction that: sustainable investing should be a matter of course for any active, long-term oriented investor.
Regulation (EU) 2019/2088 ("Disclosure Regulation" or "SFDR" (Sustainable Finance Disclosure Regulation)) places an obligation on financial market operators to disclose information about strategies for dealing with sustainability risks and potential and/or identified adverse impacts on sustainability.
Our investment philosophy follows five guidelines: diversification, flexibility, quality, solvency and value. These five principles are reflected in all of our funds and mandates.
As active investors, we have a world view that shapes our investment decisions. Learn more about our view of the capital markets, monetary policy and individual asset classes.