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.
Additional Information regarding our Sustainable & Thematic 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 our ESG competence center, a team of six sustainability analysts are 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 entire product life cycle).
The Company Rating assesses an individual company's contribution to reducing environmental and social risks and how well it exploits the corresponding opportunities. The rating 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.