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Vontobel Holding AG

PRI reporting framework 2019

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

ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. 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
80 %
Percentage of active listed equity to which the strategy is applied
15 %
Percentage of active listed equity to which the strategy is applied (+/- 5%)
5 %
Total actively managed listed equities 100%

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

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

At Vontobel, we are convinced that a one-size-fits-all ESG approach falls short to account for differences in geographies, asset classes as well as investment styles and objectives. For this reason, we develop specialized ESG strategies tailored to the respective investment strategy. This enables us to cover a wide range of client needs in a targeted manner, thus creating added value compared to standardized ESG approaches, such as passive ESG ETFs

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.

Within the Sustainable & Thematic Boutique, Vontobel manages a product line where an ESG assessment has been fully integrated into the financial analysis and its recommendation process.

For another product line, we use our in-house ESG research differently. Here, we apply 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.

Within the Quality Growth Boutique, we do not apply an ESG integration strategy as defined by UNPRI as the assessment of material ESG information doesn’t follow a structured and explicit process. However, this boutique does incorporate material ESG information into its deep fundamental analysis on a company by company basis and thus into its investment selection process.

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

The Sustainable & Thematic Boutique 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.

While using financial screens for stock selection, the Quality Growth Boutique focuses on ESG on a single company basis with bottom up fundamental analysis.  This analysis incorporates a variety of factors which can differ significantly depending on the specifics of company or industry and where the ESG risks are deemed to be most pronounced once the company and its management history are understood.

LEI 02. Type of ESG information used in investment decision

02.1. 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 

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

02.4. Additional information.[Optional]

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

LEI 03. Information from engagement and/or voting used in investment decision-making (Private)

(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. 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 labelled active listed equities products using negative screening in combination with a best-in-class screening:

  • 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.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

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.

LEI 05. Processes to ensure screening is based on robust analysis

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

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.5. Additional information. [Optional]

Providers were chosen carefully on the basis of a thorough evaluation of their processes, capacities and expert know-how. In addition, Vontobel regularly engages with industry associations such as SSF (Swiss Sustainable Finance) to ensure that the overall quality of available third party ESG data is continuously improved.


LEI 06. Processes to ensure fund criteria are not breached

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

06.2. 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.

06.3. Additional information.[Optional]

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

For our integrated approach: audits of fund holdings are undertaken on a regular basis by the internal ESG auditor otherwise not involved in stock selection and portfolio construction processes.

(B) Implementation: Thematic

LEI 07. Types of sustainability thematic funds/mandates

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

07.2. Describe your organisation’s processes relating to 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. The Sustainable Water fund 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 four 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

Vontobel Fund Sustainable Water

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


(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the ESG factors you systematically research as part of your investment analysis and the proportion of actively managed listed equity portfolios that is impacted by this analysis.

ESG issues

Proportion impacted by analysis




Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

Within the integrated approach, we systematically review the potential significance 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 09. Processes to ensure integration is based on robust analysis

09.1. 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 internal ESG auditor otherwise not involved in stock selection and portfolio construction processes.

09.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your integration strategy.

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

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

09.6. Additional information.[Optional]

In the Global Equities Team based in Zurich, the above procedures are fully integrated into the research. Within the Sustainable & Thematic Boutique, Vontobel manages a product line where an ESG assessment has been fully integrated into the financial analysis and its recommendation process.

An internal ESG auditor 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 10. Aspects of analysis ESG information is integrated into (Private)