Our investment approach

Responsible yield

Within the investment department of Erste Asset Management, a team of several experts focuses exclusively on the question of sustainable investments. The investment process of Erste Asset Management is a so-called “integrative” approach that includes positive and exclusion criteria, engagement, and the best-in-class method. The core of this process is the ESG analysis, which refers to environmental, social, and (corporate) governance aspects.

Our selection process

Companies that we invest in have to meet a number of criteria. Nuclear power and arms production and trade constitute the most important exclusion criteria. Companies are also immediately divested from the fund in proven cases of corruption or child labour.

Companies that were admitted into the investment universe are managed according to a clearly structured approach and in cooperation with numerous internal and external specialists. An ethics advisory board, specifically set up for this purpose, appraises whether investments do in fact comply with sustainable criteria.

 

Active ownership: engagement and voting

Our sustainable activities go beyond the scope of investments in responsible companies. The active protection of owner interests is an integral part of our investment approach. We engage in dialogue with companies that we invest in or that qualify for investments. We request information via letters, conference calls, and company visits, and frequently demand improvements. These activities are called engagement. We also attend general shareholder meetings, where we vote. This approach aims at motivating companies that we invest in to engage in more sustainable business practices.

Carbon footprint of the equity portfolio

Erste Asset Management was the first investment company in Austria to commit to publishing the carbon footprint of its equity fund in September 2015. That was an important step towards transparency. The CO2 intensity is calculated annually and is published on the website of Erste Asset Management.

Our guidelines

Taking into account Environmental, Social, and Corporate Governance (ESG) standards

The Principles for Responsible Investing (PRI) of the United Nations form the basis of responsible investment at Erste Asset Management. As signatory of said PRI, Erste Asset Management undertakes to take into account the following six principles in its investment policy:

  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the Principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the Principles.
  6. We will publish each report on our activities and progress towards implementing the Principles.

When selecting our cooperation partners we also make sure they have signed the PRI or at least follow them as much as possible.

No banned weapons

Erste Asset Management refrains from investment in companies that operate in the area of banned weapons. Among those are:

  • Biological and chemical weapons
  • Cluster bombs, including possible launch and ejection systems
  • Anti-personnel mines, mine-planting systems, and other mine systems
  • Nuclear weapons
  • Uranium weapons

In addition, we monitor the development of new controversial weapons in cooperation with our external partners in order to potentially include them into our catalogue of criteria. Along with companies, we also exclude governments that have been sanctioned by the UN Security Council for infringement with international treaties on banned weapons.

No speculation on food

We have committed to refraining from trade in derivatives on food for all our investment funds and client portfolios. In our umbrella funds and multi-assets mandates, we will not invest in third-party funds that speculate in food.

Guideline on coal divestment

Erste Asset Management was the first investment company in Austria to commit to refrain from investments in coal mining in all actively and discretionarily managed mutual funds and portfolios. All stocks have been sold by the end of the year 2015. Thereby, Erste Asset Management further contributes to managing climate change. Even stricter rules apply to sustainable funds, please refer to the Coal Divestment Policy below.

Handbook for Responsible Investing

Sustainability, or responsibility, means being aware of one‘s actions and their consequences and approaching them in such a way as to avoid damage to others. Or, in other words, the decisions of today’s generation should not tie the hands of future generations. Or – to use yet another metaphor – behaving sustainably means acting like a farmer who takes best possible care of a tree and harvests its fruits without felling it. Th is way, we can expect a sustainably high harvest without endangering tomorrow‘s livelihood.

Erste Responsible Advisory Board

 

The Erste Responsible Advisory Board supports Erste Asset Management both in its ESG approach and its investment process. The Board consists of internationally renowned experts who contribute know-how from their respective area to facilitate an optimal decision-making process.

 

Members

Dr. Anna Durnová, Ph.D. - Chair, Advisory Board expert for technology and medicine

Günter Benischek - Advisory Board expert for social affairs / NGOs

Ing. Mag. Klaus Bergsmann - Advisory Board expert for environment

Dr. Klaus Gabriel - Advisory Board expert for religion/ethics

Univ.-Prof. Dr. Gyöngyi Lóránth - Advisory Board expert for governance

 

ERSTE RESPONSIBLE RETURN - The ESGenius Letter

Our responsibility magazine ERSTE RESPONSIBLE RETURN - The ESGenius Letter discusses topics that are both controversial and up-to-date and informs about our responsible funds.

 

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Disclaimer

This material is an advertisement and serves only to provide additional information about the mutual funds managed by Erste Asset Management GmbH ("Erste AM").

Basic documents about the mutual funds are Fund rules ("Statut") and the Key Investor Information. Statutes of the Funds are submitted to the Czech National Bank in accordance with Czech law and their current versions are available at the registered office of Erste AM or on the website www.erste-am.cz.

The analyses and conclusions published in this material are of a general nature and do not take into account the personal needs of individual investors in terms of income, financial situation or risk tolerance. They are in no way investment recommendations. Any use of this information should therefore be preceded by consultation with a professional investment adviser to ensure that the planned investment is in line with the investor's needs and priorities and to inform the investor of the potential risks of the particular investment.

Where any return is mentioned in the information material, it should always be based on the principle that past returns are no guarantee of future returns. Any investment involves the risk of volatility in value and changes in exchange rates and the return on the original investment and the amount of any profit is in no way guaranteed. Past performance figures include the effect of fees, commissions and taxes associated with the management of the Fund. Only entry and exit fees related to the distribution of units, if any, are not included.

Erste AM and the managed investment funds registered in the Czech Republic are subject to the supervision of the Czech National Bank.