The three letters ESG represent three sustainability-related areas of responsibility of companies in ecology, society, and economy:
- “E” (Environment) : refers to environmental awareness, e.g., issues of environmental pollution or hazards, greenhouse gas emissions or energy efficiency issues.
- “S” (Social): includes aspects such as occupational health and safety, diversity, or social engagement.
- G” (Governance)” concerns sustainable corporate management and includes topics such as corporate values or management and control processes.
Principles for responsible investment
The Principles for Responsible Investment (PRI) are based on a UN financial initiative launched with the aim of developing touchstones for responsible securities management. They reflect the increasing importance of environmental, social and governance issues in investment decisions. More than 2,500 institutional investors have joined the initiative since its launch in 2006, managing a total of around USD 90 trillion in investment volume (as of 12/2018). It is becoming increasingly apparent that companies which strategically manage ESG issues will have clear competitive advantages in global markets in the future and perform better in the long term. By implementing the PRI in a sustainable investment approach, sustainable management should be actively and tangibly promoted, and other market participants should be encouraged to do the same.
Most institutional investors already take sustainability criteria into account in their investments. This approach is prevalent among capital management companies (91 per cent), foundations and churches (88 per cent) and insurance companies (70 per cent).
There are various information channels for assessing the sustainability of specific business models and companies. For example, many companies already prepare their own sustainability reports (management reports). For European capital market-oriented companies, there has been a reporting obligation since 2017, so these companies are required to report annually on significant developments in the areas of environmental, employee and social concerns, respect for human rights, and combating corruption and bribery.
A key challenge is to filter out reliable information from the mass of data. For this purpose, various indicator systems have been developed, which are offered, for example, by index providers such as MSCI or Thomson Reuters. With the help of these systems, the ESG scores of many companies can be systematically calculated and compared.
At Genève Invest, we have integrated the issue of sustainability into our own activities and corporate culture in order to provide excellent services to our clients over the long term.
Genève Invest is convinced that sustainability is a central issue of our time and will influence events on a global level in the future. For this reason, we support the global shift towards a sustainable, climate-neutral, and social economy. Ecological, social, and corporate aspects are being considered in fundamental analyses. Our focus is on investments that offer long-term added value and not on speculative commitments that promise short-term profit with high risk.
Individual asset management based on single stocks enables us to consider the specific preferences of our clients. We avoid investments in companies associated with weapons, human and labour rights violations, corruption and bribery, nuclear energy, tobacco, and alcohol. Clients can make detailed requests to our asset management team.
Sustainable investment criteria are taken into account when evaluating investment decisions. Our analysis and documentation processes are not yet set up in such a comprehensive way that we promote investments that take ESG and sustainability criteria into account. In our opinion, an independent and objective data basis is still lacking, which allows a reliable classification of companies and prevents so-called “greenwashing”.
Our declared goal is to offer investments and products in the future that comply with Article 8 of Sustainable Finance Disclosure Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector.
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