Sustainable asset management
As independent asset manager, we define sustainability as a broad catalogue of criteria that always flow into our investment philosophy. This means that we examine all the companies in which we invest in terms of various aspects:
- Sustainability of business operations in ecological terms: We do not want to invest in companies that unnecessarily burden the environment.
- Sustainability of the products: We do not want to invest in products that unintentionally harm third parties (e.g. exclusion of producers of banned guns).
- Sustainability in success: Companies should be fair to all their stakeholders in the long-term; only companies that are economically successful on the long run can be beneficial to the people they employ and to the environment.
- Sustainability in balance sheet management: A healthy equity ratio must be guaranteed to ensure long-term survival.
- Sustainability in terms of ethical principles: Companies must not subject the pursuit of profit to the maintenance of ethical principles or even repeatedly violate legal regulations.
- Sustainability with regard to social behaviour: Dealings with employees, customers and competitors must be fair.
We have developed our own value system in collaboration with Professor Nils Oermann, who teaches ethics at the University of St. Gallen and Oxford. We check the stock selection by ensuring that the companies are firstly among the better ones according to S&P Global' ESG score calculation and that secondly they are included in the relevant MSCI indices.
Investing in a sustainable way poses a dilemma: important values beyond the economy can only be defined individually, but the investor wants to improve the economic system for everyone. Who defines the balance between competing values? This dilemma has not a straightforward, yet universally valid, solution. From an ethical point of view, the hard line on ESG should be drawn on companies which violate the law, for example in environmental regulations or corruption. Then the boundaries become softer, more diffuse, more individual, because non-economic values are subjective. Investors must therefore decide for themselves which values are more important to them: All sheep are gray. Which one is bright enough to still be enjoyed?