In alternative investments, like private debt, we prefer funds that already have integrated ESG criteria as a part of their investment process. By integrating ESG factors we help to enhance risk-adjusted returns and aim to avoid risks. When selecting alternative funds, we consider particularly four ESG areas:
1. Climate change and environmental issues
2. Violation of human rights, child labor and labor standards
3.The quality of the operational management and the board of directors and their incentives, as well as accounting practices, corruption, minority shareholder's rights and political connections
4.When possible, the same exclusion strategy as used for our equity and fixed income funds. Particularly in infrastructure investments we analyze thoroughly political aspects, regulatory impacts and unpopular industries. In private equity funds we aim to understand the corporate governance. We emphasize transparency of investments, clear benchmarks and clear reporting. We monitor how the ESG criterion are met through the life-cycle of the funds.