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Sustainability in asset management
In the context of our investment policy we strive for stable and attractive returns while also taking into account Environmental, Social and Governance criteria (ESG criteria). We have set out in writing our sustainability approach in the investment sector in our "Responsible Investment Policy", which was developed in 2011 and updated in 2016. We are guided by, among other things, the ten principles of the United Nations Global Compact, i.e. we pay attention to aspects relating to human rights, working conditions, the environment and anti-corruption. Furthermore, we avoid exposures to issuers who are involved in the development and proliferation of controversial weapons.
Since 2012 virtually 90% of our investments have undergone half-yearly negative screening based on individual ESG criteria that we have developed and continuously review in cooperation with a service provider specialising in sustainability. The portfolio subject to this voluntary screening encompasses the asset classes of fixed-income securities (government bonds and debt securities issued by semi-governmental entities, corporate bonds and covered bonds) as well as listed equities. Securities of issuers identified as "non-adequate" are actively reduced as far as possible. In addition, potential new investments are checked in advance to see whether the issuers violate the defined ESG criteria. Such exposure is rejected if this is found to be the case.
The criteria of the UN Global Compact are used to check entities that issue bonds or equities. Companies that fail to respect human rights or are complicit in human rights abuses thereby violate fundamental principles of the United Nations. Investments in securities of such entities are excluded, as are investments in instruments of issuers that disregard basic labour standards and environmental protection considerations. The primary concern here is with the use of forced or child labour and discrimination as well as with care for the environment and a heightened environmental awareness. Last but not least, exposures to entities that have attracted attention due to forced / child labour, discrimination or corruption are also ruled out. When checking government issuers the focus is on the question of whether – and if so, which – sanctions have currently been imposed on them.
Active Ownership
In the case of listed companies we are able to influence the conduct of business through exercise of our voting rights. However, given that the proportion of listed equities in our asset portfolio is only around 2% of our total investments, the effect of engagement in this area is limited relative to our overall investment universe.
For this reason we have not to date adopted any voting guidelines on environmental and social issues in connection with the sustainable orientation of our investments. In the context of our responsibility as an investor we concentrate on the development of the previously discussed ESG criteria and the regular screening of our investments. Should the proportion of listed equities in our total portfolio increase significantly on a lasting basis, we shall revisit the topic of "active ownership" and decide on further steps.
Asset allocation as at 31 December 2016
~90% of investments are subject to Environmental, Social and Governance criteria (ESG criteria).
Book value 2016: EUR 42.3 billion