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Solactive AG

Service Providers Framework 2019

You are in Strategy and Governance » Policy on ESG beliefs

Policy on ESG beliefs

SG 01. Responsible investment policy

01.1. Describe how your organisation’s philosophy incorporates environmental, social and governance factors, and the link to your business offerings.

Solactive’s company philosophy has always been to challenge the status quo, and this spirit is what has led us to become one of the market leaders in the indexing industry. Since our inception in 2007, we did not have a brand value to attract clients with, so our purpose was to sit down and listen to every client’s requirements resulting in positioning ourselves as the index provider who provides a timely execution, high customization of our services. This mental disposition fuels each of our employees’ engines and is reflected in our activities offside our core business activities:

Picking up that spirit, Solactive initiated its Tackle Days in 2018, where employees were able to vocal proposals for improvement. This action encouraged our staff to launch a company-wide initiative to make a positive social impact. Solactive now supports three organizations, which are dependent on voluntary work. Furthermore, we established social days where employees are able to take a day off work to perform volunteer tasks in one of the chosen organizations. The activities range from food donations to handing out the said food at dedicated outlets, to janitorial services for associations which provide pediatric hospice care and support for cancer battling children and their families.

To further reduce our ecological footprints, we encourage our staff to take public transportation instead of taking the car to work. Furthermore, Solactive hands out bamboo cups which our employees ought to use in order to cut down on plastic cups.

01.2. Indicate whether you have policies that formalise the incorporation of your ESG beliefs in your business offerings.

01.3. Indicate the components/types of your internal policy and provide the URL and/or an attachment of the document/s if they are publicly available.

Policy components/types
          We integrate the possibility of ESG screening in our customized client offerings.

Public availability

01.4. Indicate how these are put into practice internally across the organisation.

          We encourage our staff to volunteer in social activities such as the support of social organizations as well as food donations for local nonprofit agencies.

01.5. Additional information [OPTIONAL]

More than 90 percent of our employees walk, cycle, or use public transportation to get to their workplace.We encourage sustainable behavior in our employees through initiatives like reusable coffee cups, "Think before you print" campaigns, and prompt the separation of waste and reduced usage of packaged food. We represent over 15 different nationalities in five different business locations, and promote the balanced recruitment and career advancement of men and women.

SG 02. Norms used to develop policies

02.1. Indicate what frameworks and guidelines you have used to develop your organisation’s policies. Tick all that apply.

02.2. Additional information. [OPTIONAL]

SG 03. Policy offerings to clients

03.1. Indicate whether you offer standard, off the shelf, policies to clients as part of your product offerings, and/or whether you create tailored versions for individual clients.

Off the shelf
Asset class-specific RI guidelines
Sector-specific RI guidelines
Screening/exclusions policy
Engagement policy
(Proxy) voting policy
RI guidelines set out within the Investment Policy Statement (IPS)
RI guidelines set out in a freestanding RI policy
Multi-year RI implementation project plan
Conflict of interest management policy
Stockbroker allocation policy
Securities lending policy
Other, please specify (1)
Other, please specify (2)
Other, please specify (3)
None of the above

03.2. Provide a brief description of the key elements, any variations, or exceptions applying to these policies.

ESG data is often included in creating tailor-made indices for which the different policies and methodologies do vary, depending on the client´s needs and ESG specific goals.

03.3. Additional information. [OPTIONAL]

SG 04. ESG/RI in business offerings

04.1. Briefly describe how you include ESG/RI factors as part of your business offerings.

Business area

Other, specify (1)

          We engage with third party ESG data providers and include their ESG data in the development of customised indices.

How you include ESG/RI factors

Based on third party ESG data.

04.2. Indicate the roles in your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for ESG/RI within the organisation.

Roles present in your organisation
Oversight/accountability for ESG/RI
Implementation of ESG/RI
Chief Executive Officer (CEO), Chief Financial Officer (CFO)
Chief Operating Officer (COO), Chief Information Officer (CIO)
Other chief-level staff
Other heads of department

Please specify

          Head of Research & Business Development
Dedicated ESG/RI staff
Other role, specify (1)
Other role, specify (2)
Other role, specify (3)
None of the above

04.3. Indicate how you ensure ESG/RI expertise for the roles where there are RI oversight/accountability or implementation responsibilities.

04.4. Indicate whether your organisation has any ESG/RI linked incentives for its employees.

04.5. Describe the ESG/RI linked incentives.

Social Days initiatives as part of Tackle Days.

04.7. Additional information [OPTIONAL]

SG 05. Outsourcing of services (Private)

SG 06. Providing training/education

06.1. Indicate whether you provide training/educational services on ESG/RI. Tick all that apply.

06.4. Additional information. [OPTIONAL]

SG 07. Applying, advancing and promoting the PRI principles

07.1. Describe how your organisation applies, advances and promotes the PRI Principles.

Solactive picked up the increase in demand for ESG indices and built itself an immense competence in this very substantial area. To maintain our thought-leadership, we’ve published blogs circulating around the ESG topic and not only promote its proven outperformance of the benchmarks but also highlight the social and ethical impact, which ESG investment ultimately implies.

Accessing the raw data allows us to credibly tell the facts. To promote ESG indexing, our Head of Research, Timo Pfeiffer, regularly speaks at panel discussions concerning ESG topics, allowing us to promote ESG towards a dedicated target group.

We stand by the claim that ESG should be an imperative for any long-term investor, and we reflect this attitude in every ESG related press release, which we send to clients and journalists.

07.2. Highlight whether there are any ways that your organisation would like to engage further with the PRI. [OPTIONAL]

Host annual ESG workshops for staff. Strategially, we are looking to build a dedicated ESG team.

SG 08. Actions taken to promote responsible investment

8.1. Indicate which of the following actions your organisation has taken to promote responsible investments during the reporting year, independently of collaborative initiatives.

          In-house activities such as support of non-profit organizations.

8.2. Additional information. [OPTIONAL]

SG 09. Long term trends

09.1. Indicate which of the following long-term trends are addressed in your product outputs.

09.2. Explain how this long-term trend affects your product outputs.

We frequently issue indices, which concern with climate change, allowing investors a facilitated exposure to companies that operate in line with set standards and principles.

09.2. Explain how this long-term trend affects your product outputs.

Our in-house research team identifies various thematic trends, which circle around Resource scarcity. We regularly present those ideas in meetings with clients.

SG 10. Interaction with asset owners (Not Applicable)

SG 11. Aligning approach with investor goals

11.1. Describe how you typically align your organisation’s philosophy and approach to ESG/RI with your investor clients’ goals.

Implementation and ESG criteria used in index construction are typically decided by our clients, as they have different needs and often also regulatory requirements.

11.2. Additional information. [OPTIONAL]

SG 12. ESG recommendations not aligned with investor goals

12.1. Describe what steps you take, if any, when your ESG recommendations are not in line with your investor clients’ goals.

12.2. Additional information. [OPTIONAL]

SG 13. Seeking feedback from clients

13.1. Indicate whether you seek feedback from clients on your RI/ESG services and product offerings

13.2. Describe how you use this feedback in your RI/ESG services and product offerings.

In every meeting, we raise the topic of ESG, and in over 50% of times, clients themselves even address the matter. We encourage clients appropriately to include ESG screening if we think that the final product would benefit from it. Of course, we never reject clients’ request to include ESG screening. If a client states that they need specific requirements for ESG screening, we do everything in our power to fulfill those demands.

SG 14. Managing conflicts of interest

14.1. Indicate whether your organisation has a policy for managing potential conflicts of interest.

14.2. Describe how you manage potential conflicts of interest.

When it comes to indexing, working with independent ESG providers is the sole reason to avoid potential conflicts of interest.

14.3. Describe how you ensure that company employees do not derive any personal gain from the use of information collected during your work process.

Compliance and Information Security Process re-launched in 2018. Also, Solactive just recently gained an ISO 270001 registration.

14.4. Additional information. [OPTIONAL]