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CSSP - Center for Social and Sustainable Products 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.

CSSP is an independent consulting and research house with a focus on ESG (Environmental, Social and Governance) and Carbon risk and its impact on investments. We help our clients to assess and better understand the ESG and climate related risks and opportunities in their investments providing comprehensive reporting and advisory services to our clients. Aiming to provide clients with independent strategy and investment concept development, implementation and market assessments as well as knowledge transfer and employee training. CSSP is your partner of choice to identify the potential risk and value impact of ESG factors, and their effect on an investment profile.

At the "heart" of CSSP is our self-developed software/platform, yourSRI.com. With our online platform yourSRI.com, we help asset managers and asset owners worldwide to adequately manage risks related to ESG and Carbon issues. yourSRI offers you an independent and comprehensive ‘all-in-one’ solution, by partnering with a global network of service and data providers such as MSCI and ISS-Ethix.

 

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

Public availability

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

01.5. Additional information [OPTIONAL]

In addition to the gender equality project, we started to include annual performanc incentives that are based on social and governance factors; it is being seen as a trial and due the small company size it's certainly more difficult to implement in a meaningful way, but the system is evaluated in 2019.


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]

The Sustainable Development Goals have been added as a best practice polidy to initiate a new product offering.


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
Tailored
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.

As an ESG-focused consultant and reporting provider, clients come to us specifically for considering ESG-factors, etc. So either because the use yourSRI.com for their fund and portfolio reporting or because they need advise in how to implement a dedicated ESG-policy. On the policy side, simple negative screening factor and more comprehensive integration strategies are the majority of implementations.

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

Reporting

How you include ESG/RI factors

Please see yourSRI.com for our standardized reporting solutions: yourSRI’s ‘ESG Fund & Portfolio Screening’ tool – an individual and cost efficient solution to measure and benchmark the ESG performance of investments and to reveal hidden ESG-related investment risks. It is a unique solution to assess and benchmark the ESG characteristics of investments and to reveal hidden ESG-related risks. Smart and simple to use reports providing an objective and standardized framework for under standing portfolio ESG risk and for tracking ESG performance over time.

A full ESG report includes the

  • Quick Facts,
  • Executive Summary,
  • Rating Breakdown,
  • Controversies & UNGC,
  • Business Involvement as well as the
  • Impact Assessment.

Please use the following link for a sample report: https://yoursri.com/media/msci-fund-sample-report.pdf

Investment Consultancy

How you include ESG/RI factors

It depends on the clients, it can range from a combination of all factors for ESG-integration to simple negative screening or assessments of business involvements for foundations.

In general, we provide clients with independent strategy and investment concept development, implementation and market assessments as well as knowledge transfer and employee training. In addition, CSSP offers comprehensive monitoring and controlling of responsible and impact investment portfolios.

Research and Data Provision

How you include ESG/RI factors

Data provisioning: specific ESG-data is being provided to clients, e.g. non UNGC-compliant companiy list, etc.

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
Board
Directors
Chief Executive Officer (CEO), Chief Financial Officer (CFO)
Chief Operating Officer (COO), Chief Information Officer (CIO)
Other chief-level staff
Other heads of department
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.

04.6. Describe how you ensure that your employees incorporate ESG/RI into services through other mechanisms than ESG/RI linked incentives.

As all services of us are related to ESG factors (reporting as well as monitoring or drafting investment guidelines), this is automatically included in the incentives.

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.

06.2. Describe the main components of your training/educational services on ESG/RI and any variations depending on the group you provide training/education to.

In partnership with the University of Zurich, the two-days executive education course «Sustainable Investing» and the one-day executive education course «Current Trends in SI» is designed for practitioners in the financial sector who want to understand the economic, social and environmental dimensions of sustainability and their implications for investment decisions and asset management approaches.

Participants become familiar with the concepts of sustainability and the diversity of technical terms in the modern world of "sustainable investing". After the basic course you will have a deeper understanding of the SI market and its players and will be able to identify different SI investor profiles and analyse their investments and decision-making processes. Participants have extensive SI knowledge of product and investment strategies and understand SI-based asset management in terms of product analysis and selection. You will gain an insight into SI risk analysis and its performance measurement.

The course thus imparts specialist knowledge for strengthening SI consulting and decision-making competence.  The additional module "Current Trends in SI" offers a foundation in special topics and value chains of non-listed SI, such as sustainable infrastructure investments, bonds and engagement.

06.3. Describe whether these training/educational services include any commercial elements.

          The course is open to students of the Master Programme; external people can participate with a fee of CHF 900.-
        

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.

First of all, we promote PRI as the best practice standards in the industry and also refer to the Case Studies and Workbooks.
In discussions with clients we do advise them that it's recommended to join the PRI and also engage with them in case they are hesistant due to the reporting requirements.

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


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.

8.2. Additional information. [OPTIONAL]

see yourSRI.com, our media archive on our homepage as well as the lecturing activity of members of our staff.


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.

First of all on the carbon-reporting service: stranded assets has gained in importance and more and more clients would like to know more about  their exposure.

Then on the ESG-reporting service: climate change is a risk factor that could influences the long-term profitability of companies; the weighting of this has been adapted over the years.


SG 10. Interaction with asset owners

10.1. Indicate whether you interact with asset owner clients.

10.2. Indicate the typical frequency and type of interactions with your asset owner clients.

Type of interaction

Frequency

Frequency

Frequency

Frequency

10.3. Additional information. [OPTIONAL]


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.

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.

We do engange with the client and demonstrate that a robust ESG integration is the way to go forward. We have a special service feature called "The Sustainability Expert Group": in there are members of our team as well as academic partners. Clients who are sceptical can take advantage of the knowledge of this group and get a complimentary two hour lessons specifically suited to the requirements and/or issues of the client.

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.

Feedback is used to enhance the reporting services further and add new product lines. All existing clients of yourSRI.com are actively encouraged to provide feedback so that any adaptions are always with the client in mind.


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.

A conflict of interest is defined as any circumstance that creates a risk that the professional judgement, decisions or actions of employees with regard to a primary interest (e.g. customer interest) will be unduly influenced by a secondary interest (e.g. interest of CSS, interest of employees, etc.). The following measures are in place: Measures to avoid and manage conflicts of interest

a.    Identification and monitoring
The EMF or its employees are obliged to identify potential conflicts of interest arising in the course of their activities or the provision of their services at the earliest possible opportunity. In this context, all activities and services shall be continuously monitored to determine whether any potential conflicts of interest may arise in the course of their performance. To this end, the sources of conflicts of interest must be identified and precautions, i.e. suitable and appropriate procedures or effective organisational and personnel measures, taken to prevent, control, avoid or manage them. This may also include physical and electronic information barriers. Any unavoidable conflicts of interest must be disclosed to the clients concerned. Identified conflicts of interest must be reported immediately to management.

b.    Handling conflicts of interest
Identified conflicts of interest are to be dealt with if a client experiences an impairment or threat of disadvantage as a result. However, the existence of a conflict of interest should not be automatically concluded on the basis of a profit, an advantage or the avoidance of a disadvantage (for CSSP). The management of conflicts of interest is supervised by the management.

c.    Measures
In order to avoid that our services for our customers and investors are influenced by interests that are not related to the subject, CSSP has structured the structural and procedural organisation and made a separation of functions. Active sales is completely separated from strategy (e.g. coordination with the various fund stakeholders such as fund managers, asset managers, custodians, etc.) and reporting. The tasks are allocated accordingly and the work contents are comprehensibly recorded.

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.

Please see above.

14.4. Additional information. [OPTIONAL]


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