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Bank Julius Baer & Co. Ltd.

PRI reporting framework 2017

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ESG incorporation in actively managed listed equities

Implementation processes

LEI 03. Percentage of each incorporation strategy

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
100 %
Total actively managed listed equities 100%

03.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

Responsible Investment ensures Julius Baer’s overall investment process takes financial material Environmental, Social and Governance (ESG) risks into consideration in order to achieve long-term economic benefits for our clients, and raise awareness and transparency of these risks.

Responsible Investment combines financial assessment with information regarding ESG risks, and is built upon the understanding that key extra-financial factors, such as corporate governance, vulnerability to climate change, water supply stress, product safety and quality, and corruption and instability can have a significant influence on a company’s financial success. We are convinced that firms recognising the importance of these factors manage industry-specific risks more efficiently than their competitors, and will be able to report more perennial profitability and creditworthiness. In doing so, the underlying goal is to capture the entire spectrum of risks to achieve what is economically profitable for our clients in the long-run.

Aiming to minimise ESG risks in the investments of our clients, Julius Baer uses company ESG ratings to assist research analysts, portfolio managers and investment advisors to identify financial material ESG risks in the investment process. Julius Baer takes an inclusive approach by actively screening our investment universe and challenging companies with the lowest ESG ratings, in order to fully understand the entailed ESG risks in addition to traditional financial analyses. Julius Baer has set up a Responsible Investment Board to ensure governance of this integration.

In addition, Julius Baer strongly believes in the importance of sustainable investment. We aim to offer our clients a diversified portfolio of sustainable investments in various asset classes and currencies in line with their individual requirements. Julius Baer introduced a dedicated sustainability mandate over ten years ago, highlighting a longstanding dedication to sustainable investment. As a specific sub-category of our discretionary management offering, the sustainability mandate also applies the best-in-class filter in addition to the ESG integration. It offers our clients the possibility to participate in a globally diversified universe of forward-thinking, responsible and innovative companies. The top 30% companies related to each sub-sector become part of the investable universe. The investments are made according to themes, specifically addressing the relevant challenges of the near future, such as energy efficiency, education, mobility, biodiversity or water.

03.3. Where assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]


LEI 04. Type of ESG information used in investment decision (Private)


LEI 05. Information from engagement and/or voting used in investment decision-making (Not Applicable)


(A) Implementation: Screening

LEI 06. Types of screening applied

06.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

Julius Baer's sustainability mandate applies weapon, nuclear and human right violations screening for internally managed active listed equities.

Screened by

Description

Julius Baer's sustainability mandate ony selects the top 30% ESG performers in each sector for internally managed active listed equities.

06.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

The screening criteria are established in collaboration with external partners. In principle the criteria are reviewed annually, and ad-hoc review is conducted in case of major controversies. Client and beneficiaries can access relevant information through our dedicated website, but there's no active communication in terms of ESG to our clients yet.


LEI 07. Processes to ensure screening is based on robust analysis

07.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

07.2. Additional information. [Optional]


LEI 08. Processes to ensure fund criteria are not breached (Private)


(B) Implementation: Thematic

LEI 09. Types of sustainability thematic funds/mandates

09.1. Indicate the type of sustainability thematic funds or mandates your organisation manages.

09.2. Describe your organisation’s processes for sustainability themed funds. [Optional]


(C) Implementation: Integration of ESG issues

LEI 10. Review ESG issues while researching companies/sectors

10.1. Indicate if E, S and G issues are reviewed while researching companies and/or sectors in active strategies.

ESG issues

Coverage/extent of review on these issues

Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

10.2. Additional information. [Optional]


LEI 11. Processes to ensure integration is based on robust analysis (Private)


LEI 12. Aspects of analysis ESG information is integrated into (Private)


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