Until June 2017, in accordance with our internal ESG guidelines, we screened our portfolios to identify companies which violated ESG principles and excluded them from our portfolios if there was sufficient evidence of wrongdoing.
After June 2017, there was a successful implementation of the outsourcing of the screening process to get a fully independent judgement and to pool the resources for this process together with other large Swiss investors. A further benefit of acting in cooperation with others is that a greater emphasis can be put on engagement with critical companies before excluding them. The process of selecting critical companies, engaging with them and possibly putting them on an exclusion list is carried out by the SVVK-ASIR directly. This has the advantage that a consistent responsible investing approach is generally applied by all of the members and that the SVVK-ASIR can apply more pressure to critical companies.
During 2019 the association continued its screening and monitoring of its members' portfolios. In this process, all of the association's members need to agree on the concrete measures to be taken with the identified, non-ESG-compliant companies. The first exclusion list was officially established in March 2017 and Suva continued to implement an updated version of it during 2019. At the end of the reporting year, there were 19 companies in this list.
In addition, we integrate Governance criteria into our traditional financial analysis because we believe that they help us to identify companies that will be profitable in the long run. Accordingly, we also focus our analysis on the long-term prospects of the companies while considering that short-term costs incurred for sustainability measures will benefit society and the companies in the long term.