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Vontobel Holding AG

PRI reporting framework 2017

Export Public Responses

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

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
59 %
Percentage of active listed equity to which the strategy is applied
1 %
Percentage of active listed equity to which the strategy is applied
20 %
Percentage of active listed equity to which the strategy is applied (+/- 5%)
20 %
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.

Vontobel adopts its sustainability strategy across differing products and boutiques. This enables Vontobel to place client needs first by incorporating ESG according to product specifications.

The Global Thematic Equities team in Zurich has fully integrated an ESG assessment in the financial analysis and its recommendation process. The Sustainable Investing Boutique) applies a proprietary modified best-in-class screening approach (best-in-class process with different threshold for eligible equities depending on the respective industries).  For some products, best-in-class screening processes based upon client-specific ESG ratings are applied.

Each of these approaches have particular strengths. The capability to implement these strategies in response to client needs is a unique advantage of Vontobel.

Vontobel applies a screening for cluster bombs and land mine producers across all assets.


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

The Thematic Investing boutique in Zurich applies a truly integrated ESG assessment in the financial analysis. On top of it, it applies a variety of exclusion screens to the respective funds. This ensures that all investments fulfil certain Vontobel sustainability criteria. In addition, for all these funds, the proxies are voted and we engage with companies - either directly or indirectly.

LEI 04. Type of ESG information used in investment decision

04.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

04.2. Provide a brief description of the ESG information used, highlighting any differences of sources of information across your ESG incorporation strategies.

Vontobel purchases ESG information from different research providers and uses the information both for screening processes as well as for integration into company analysis.

In addition, analysts receive information from brokers and address companies directly to gather information on companies where no public ESG data is available.

For the Sustainable Investing Boutique: We apply proprietary ESG ratings which are provided by our Sustainability Research team. This team uses raw ESG data from an approved data provider to produce preliminary assessments of a comparatively big universe of companies, by applying an ESG analysis methodology developed in-house. For a limited number of investment candidates, we analyse ESG information from another approved information provider and (published and unpublished) primary information provided by the companies, the press, and other independent sources (especially provided by NGOs).

04.3. Indicate if you incentivise brokers to provide ESG research.

04.5. Additional information.[Optional]

We buy broker research in separate contracts in order to ensure independence.

LEI 05. Information from engagement and/or voting used in investment decision-making (Private)

(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


These negative screenings are applied to all Vontobel internally managed active listed equities products:

  • Nuclear power
  • Agricultural genetic engineering
  • Arms and other defense products
  • Tobacco
  • Gambling
  • Pornography
  • Gross violations of human rights and rights at work

For some of our products, these additional negative screenings are applied:

  • Airlines
  • Alcohol
  • Agrochemicals: production of crop protection agents
  • Chlorine chemicals: production of organochlorine bulk products (e.g. PVC)

Screened by


The sustainability ratings we use to define the sustainable investment universe are based on the following criteria covered by the different research providers:

Environmental criteria:

  • Effective environmental management systems with clear responsibilities, targets and regular monitoring
  • Improvement in environmental performance at operational level (increase in eco-efficiency)
  • Optimization of products based on environmental considerations

Social criteria:

  • Good conditions for employees, including health and safety systems and anti-discriminatory measures
  • Sustainability standards for suppliers, and constant monitoring
  • Fostering of economic and social development through community involvement

Governance criteria:

  • Independent Board of Directors with committees for key areas
  • Structure and equality of shareholders
  • Transparency regarding compensation and long-term incentives

Screened by


Norms based screening criteria are included in our negative screening criteria (see above). The criterion "Violation of human rights" refers to the UN Guiding Principles on Business and Human Rights and the ILO Conventions. Other aspects are part of the positive screening criteria.

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.

Vontobel has carefully assessed the procedures, capacities as well as experts a provider relies on and has chosen the most suitable provider. The screening criteria used by these providers were established in a thorough process based on extensive research on specific ESG risks and opportunities in each sector.

Criteria are reviewed on a regular basis approximately once a year. The Eurosif Transparency Guidelines reflect any changes as well as in separate reportings upon request.

Additional Information regarding our Sustainable Investing Boutique:

A sustainable investment approach makes it possible to systematically incorporate in the investment process the risks and rewards created by the interplay of environmental, social and economic forces acting on companies, governments and public institutions. In this boutique, a team of six sustainability analysts is responsible for evaluating the sustainability credentials of sectors, individual companies, corporate and government bonds and public financial institutions.

Our sustainability analysis complements traditional financial analysis, and is a key element in the investment process for mandates. The starting point is the investment universe, which comprises the biggest securities in the respective asset class (usually the relevant benchmarks in the case of equities), as well as other investment ideas provided by Portfolio Management and Sustainability Research. The dedicated team of sustainability analysts is responsible for evaluating the sustainability credentials of sectors, individual companies, corporate and government bonds and public financial institutions.

The detailed evaluation criteria differ among the individual sectors, as do the weightings used to aggregate the assessments of these detailed criteria to arrive at an overall rating.

The sustainability rating is composed of two dimensions, the Sector Rating and the Company Rating.

The Sector Rating assesses the company's exposure to environmental and social risks, primarily based upon on the environmental and social impacts of that particular industry. This is measured by environmental criteria such as carbon emissions, water consumption, air pollution and waste volumes; consideration is also given to social criteria such as working conditions (work accidents, staff turnover, wages and benefits) and the potential for social conflict (activities in countries with poor working conditions and human rights records, corruption, unfair competition, controversial products such as armaments, etc.). The entire value chain for the relevant sector is reviewed for this purpose (including the supply chain and the full product life cycle).

The Company Rating assesses the individual company's contribution to reducing environmental and social risks and exploiting the corresponding opportunities. It is based upon a matrix of criteria developed in-house which comprises the following three aspects:

Environmental responsibility - the company's measures and initiatives to reduce the environmental impacts in production, the supply chain and product usage.

Social responsibility- the company's measures and initiatives to take into consideration the interests of customers, employees, suppliers and society as a whole, for example product safety, occupational health& safety, working conditions at suppliers.

Governance: embedding sustainability aspects in the corporate strategy and business model; management systems; corporate governance standards.

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]

Providers were chosen carefully on the basis of a thorough evaluation of their processes, capacities and expert know-how. The internal sustainability analyst within Vontobel otherwise not involved in the investment process regularly audits sustainability reviews and engages with the investment team to ensure robust analysis.

In addition, Vontobel regularly engages with industry associations to ensure that high-quality third party sustainability data is made available to relevant investment teams.


LEI 08. Processes to ensure fund criteria are not breached

08.1. Indicate which processes your organisation uses to ensure fund criteria are not breached

08.2. If breaches of fund screening criteria are identified - describe the process followed to correct those breaches.

If breaches are identified, the portfolio manager is informed immediately and the respective position is sold.

08.3. Additional information.[Optional]

For screened mandates: automated IT systems are used to prevent investment managers from investing in excluded stocks.

For integrated approach: audits of fund holdings are undertaken on a regular basis by the internal ESG auditor.

(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]

Vontobel has four types of environmental thematic funds:

The Clean Tech and New Power funds search for companies that have a positive impact on the environment through their products and / or services, with a holistic approach being selected that considers the entire life-cycle of the product or service. The Future Resources fund additionally focuses on innovative technologies that improve access to resources and on advanced materials that increase resource efficiency. The relevant investment themes are listed below. Notenstein Sustainable Water (managed by Vontobel) invests in listed shares of companies that exploit market opportunities arising from a sustainable use of water. The investments are regionally diversified along the entire value chain for water, including infrastructure, technology, water quality, water efficiency and water supply.

Based on thorough sustainability analysis, companies and sectors that are exposed to excessive environmental and social risks are excluded from the fund's investment universe.

We believe that companies with a strong positive impact on the environment - not necessarily through their own operations but as a result of the products and services they provide - will benefit from structural growth and better margins, also leading to a positive financial performance.

Investment process:
A universe of companies that fits the various investment themes of the three funds is reviewed on an annual basis. In view of the themes in question, they inherently have a positive environmental impact. During the review, companies prompting serious ESG concerns are removed from the universe. Due to the thematic approach, a large number of young, smaller and medium-sized companies are included in the universe, many of which have limited reporting on ESG aspects.

When evaluating individual companies for a potential investment, ESG aspects are assessed in detail by the respective analyst, with social and governance criteria being considered as part of the risk assessment. The environmental assessment must result in a positive contribution in this context. External ESG providers are consulted for the assessment of social and governance aspects but our holistic approach to environmental aspects requires an extensive assessment by our in-house analysts.

Companies are only selected for the funds if there is a strong environmental investment proposition and no critical issues with regard to social and governance aspects, in addition to which they must meet the usual financial criteria.

Investment themes:

Vontobel Fund Clean Technology

  • Resource-efficient industry
  • Building technology
  • Clean energy
  • Low-emission transportation
  • Life-cycle management
  • Clean water

Vontobel Fund New Power

  • Solar, wind and other renewable power generation and equipment
  • Power generation and power transmission
  • Natural gas markets
  • Demand-side energy savings

Vontobel Fund Future Resources

  • Unconventional energy
  • Advanced materials technology
  • Agriculture
  • Water
  • Renewable resources
  • Commodity chemicals and basic materials

Notenstein Sustainable Water

  • Water
  • Infrastructure
  • Water technology
  • Water quality
  • Water efficiency
  • Water supply.


(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





Corporate Governance

Corporate Governance

10.2. Additional information. [Optional]

Within the integrated approach, we systematically review the potential significant of environmental, social and governance issues as part of the standard investment analysis. Within screened funds and thematic funds, research on E, S and G issues is targeted to areas of specific relevance.

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

11.1. Indicate which processes your organisation uses to ensure ESG integration is based on a robust analysis.

          Assessment of all ESG minimum standard frameworks by an external ESG-specialist otherwise not involved in stock selection and portfolio construction processes

11.2. Describe how ESG information is held and used by your portfolio managers.

11.3. Additional information.[Optional]

In the Global Equities Team based in Zurich, the above procedures are fully integrated into the research process.

An internal ESG specialist otherwise not involved in the investment process checks all ESG minimum standard frameworks of the financial analysts. The person discusses potential gaps or rating differences with them and challenges their assessment. ESG minimum standard frameworks are then adapted by the financial analysts.

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