ESG Glossary

Investors exercise their shareholder voting rights and engage in active dialog with company management on sustainability issues. There are two forms of active shareholder policy:

Exercising voting rights: shareholder rights are exercised at the Annual General Meeting to positively influence company policy on sustainability criteria.

Engagement: Investors enter into an active and long-term dialog with companies with the aim of improving their conduct with regard to ESG criteria.

The schweizerische Pensionskassenverband ASIP is the umbrella organization for pension funds. It has developed ESG reporting standards for pension funds. These aim to ensure that ESG criteria are taken into account in the investment process of pension funds. Reporting on ESG implementation is also being sought, which would improve benchmarking. In the future, pension funds should increasingly explain how they manage their portfolios and integrate ESG criteria in order to promote transparency and avoid greenwashing.

Exclusion of selected investment objects from the investment universe, e.g. companies that violate certain criteria. Exclusion criteria can be standards-based or value-based:

• Standards-based: Investments are checked for compliance with international standards and norms, such as the UN Global Compact or ILO core labor standards.

• Value-based: Investments are checked for compliance with subjective values, personal preferences or ethical ideals and excluded if necessary. Examples of this could be the exclusion of weapons or gambling.

Selection of the best companies in an industry, sector or industry based on ESG criteria.

CO2, also known as carbon dioxide, is a colorless and odorless gas that is produced by the combustion of carbon and the respiration of living organisms. It occurs naturally in the earth's atmosphere and is a greenhouse gas (like methane, for example). CO2 emissions in specific terms refer to the emissions resulting from the combustion of fossil fuels and the production of cement. Such CO2 emissions can become problematic if they cause the CO2 concentration in the atmosphere to rise too high and increase the natural greenhouse effect. This leads to a rise in the earth's temperature, which in turn results in climate change (see Paris Climate Agreement / net zero).

In addition to CO2, there are other greenhouse gases such as methane and nitrous oxide, which contribute to the greenhouse effect to varying degrees and remain in the atmosphere for different lengths of time. A CO2 equivalent is the amount of CO2 emissions required to cause the same climate impact as a certain amount of another greenhouse gas. CO2 equivalents are referred to by the abbreviation “CO2e”.

The carbon footprint refers to the amount of CO2 emissions emitted in relation to the company's value. This indicator is used to assess the environmental impact of a company or sector in relation to climate change. Different sectors naturally have different CO2 emission profiles. Therefore, direct comparisons can be misleading (see ESG score).

CO2 intensity refers to the amount of CO2 emissions emitted in relation to sales. This indicator is used to assess the environmental impact of a company or sector in relation to climate change. Different sectors naturally have different CO2 emission profiles. Therefore, direct comparisons can be misleading (see ESG score).

Refers to the ecological aspects and impact of a company's business activities on the natural environment. For example, if a company reduces its carbon footprint, the company's rating in the “Environment” dimension improves.

ESG stands for Environment, Social and Governance. ESG refers to non-financial factors and criteria that are taken into account during the investment process and can have a significant impact on the financial performance of portfolios.

ESG criteria are explicitly included as an essential component of the investment process and the fundamental financial analysis of investment properties.

The ESG rating (often incorrectly equated with ESG score) indicates the ESG performance of a company on a letter scale (analogous to credit ratings). Methodological differences between the rating platforms make it difficult to compare the ratings of different platforms.

An ESG score is a quantified assessment of a company's performance with regard to various sustainability indicators (see E, S, G). ESG scores are produced by various rating platforms, each using different methodologies, weightings and criteria for the assessment of environmental, social and governance factors. Leading providers are MSCI ESG Research and Sustainalytics. These methodological differences between the rating platforms make comparisons between the scores of different platforms difficult.

On the one hand, an ESG or sustainability strategy can define a company's approach to dealing with relevant sustainability issues. The ESG strategy comprises the three pillars of environment, social affairs and governance. The aim is to address the sustainability factors to be taken into account in the context of current and future business activities. On the other hand, ESG strategies can also be pursued in the investment business. Investors make their decisions in accordance with the ESG strategy. There are a large number of possible ESG strategies. These include exclusions (negative selection), positive selection, best-in-class, ESG integration, thematic investing, impact investing, active shareholder policy and climate strategies.

Generally refers to the procedures and mechanisms that determine how a company is managed. Aspects such as transparency are important here, for example when a company focuses on transparency in its reporting and integrates ethical principles into its business strategies.

Investments that aim to achieve a measurable positive ecological or social impact in addition to financial goals.

Sustainable investment strategies are designed to help control financial climate risks or promote a positive climate impact.

The term “net zero” means that all greenhouse gases that enter the atmosphere are balanced out by their removal from the atmosphere. This means that the concentration of greenhouse gases in the atmosphere remains stable.

Typically, investors' climate targets are based on the requirements of the United Nations' Paris Climate Agreement. According to this agreement, global warming caused by human activity is to be limited to well below 2 degrees Celsius and as close as possible to 1.5 degrees Celsius compared to pre-industrial levels by 2050.

Selection of investments that fulfill ESG criteria particularly well or that achieve an ESG rating above a certain threshold.

Includes a company's relationships with its employees, suppliers, customers and the wider community in which it operates. The assessment takes into account aspects such as working conditions, compliance with human rights and social standards in the supply chain. For example, if a company is committed to improving occupational safety, this leads to a better rating in the “Social” dimension.

The Science Based Targets Initiative (SBTi) defines a framework that can be used by companies to set science-based emission reduction targets. With SBTi-compliant climate targets, companies signal a credible strategy for reducing greenhouse gas emissions in accordance with the Paris Climate Agreement.

There are three different categories in which companies or organizations emit greenhouse gases. These categories are known as “scopes”.

Scope 1: Umfasst Emissionen, die sich aus der unmittelbaren Tätigkeit des Unternehmens oder der Organisation ergeben. So würde beispielsweise die Verbrennung von Diesel in firmeneigenen Lastwagen zu den Scope 1-Emissionen eines Unternehmens zählen.

• Scope 2: Umfasst sämtliche Emissionen, die das Unternehmen durch den Erwerb von Strom, durch Heizung oder Kühlung verursacht und ausserhalb des Unternehmens anfallen. Sie stellen eine Form von indirekten Emissionen dar.

• Scope 3: Umfasst Emissionen, die zwar aus den Aktivitäten des Unternehmens resultieren, aber von externen Quellen ausserhalb der direkten Kontrolle des Unternehmens stammen. Diese indirekten Emissionen entstehen entlang der gesamten vor- und nachgelagerten Wertschöpfungsketten. So zählen beispielsweise die Herstellung der vom Unternehmen eingekauften Waren oder die bei der Gewinnung der vom Unternehmen verwendeten Rohstoffen verursachten Emissionen zu den Scope 3 Emissionen.

Asset Manager werden durch die europäische Offenlegungsrichtlinie (EU Sustainable Finance Disclosure Regulation) verpflichtet, ihre Produkte gemässe ihrem Nachhaltigkeitsprofil transparent zu qualifizieren. Dafür gibt es drei verschiedene Kategorien (genannt Artikel):

Artikel 6: Zu dieser Kategorie zählen Produkte ohne ESG-Ambitionen.

Artikel 8: Fonds mit dieser Klassifizierung werben damit, umweltbewusst oder sozialverträglich zu investieren und entsprechende Merkmale im Investitionsprozess zu berückichtigen.

Artikel 9: Fonds mit der höchsten Klassifizierung verfolgen ein explizites Nachhaltigkeitsziel und müssen klar darlegen, wie diese Ziele erreicht werden sollen.

Stranded Assets sind Vermögenswerte von Unternehmungen, die sich aufgrund langfristiger sozio-ökologischer oder technologischer Transformationsprozesse in Zukunft entweder als wertlos oder sogar als risikoreiche finanzielle Verpflichtung erweisen könnten. Ein Beispiel dafür sind fossile Energieträger.

Die Swiss Climate Scores sind das Resultat einer Zusammenarbeit diverser NGOs, der Schweizerischen Bankiervereinigung und anderen Branchenexperten. Sie haben zum Ziel, die Klimaverträglichkeit von Investitionen transparent zu machen. Dabei weisen die Scores aus, inwieweit Finanzanlagen mit internationalen Klimazielen übereinstimmen (z.B. Pariser Klimaabkommen). Dazu verwenden die Scores diverse Indikatoren, u.a. die Treibhausgasemissionen oder die Exposition gegenüber fossilen Brennstoffen.

TCFD steht für «Task Force on Climate-related Financial Disclosures». Dies ist eine Arbeitsgruppe vom Financial Stability Board (FSB) die darauf abzielt, die Transparenz in Bezug auf klimabezogene Finanzinformationen zu erhöhen. Ziel ist es, dass Investoren diese Informationen effektiver in ihre Entscheidungsprozesse einbeziehen können. Die verbesserte Berichterstattung soll dazu beitragen, dass Finanzentscheidungen gefällt werden, die zu einer nachhaltigeren globalen Wirtschaft beitragen.

Investitionen in Unternehmen, die von den Geschäftsaktivitäten einen Nachhaltigkeitsbezug haben. Beispielsweise sind dies Firmen mit Geschäftsmodellen zum Klimaschutz oder zur Gesundheitsförderung.

UNPRI (United Nations-supported Principles for Responsible Investment) ist eine Initiative, die von der UNEP Finance Initiative und dem UN Global Compact unterstützt wird. Sie fördert die Einbeziehung von ESG-Kriterien in die Investitionsentscheidungen von Anlegerinnen und Anlegern. Ziel ist es, durch verantwortungsbewusste Investitionspraktiken zu einer nachhaltigen globalen Wirtschaft beizutragen und langfristige Wertschöpfung zu fördern. Unterzeichnende Institutionen verpflichten sich zur Einhaltung von sechs Prinzipien, die sich um ESG drehen.

Investors exercise their shareholder voting rights and engage in active dialog with company management on sustainability issues. There are two forms of active shareholder policy:

Exercising voting rights: shareholder rights are exercised at the Annual General Meeting to positively influence company policy on sustainability criteria.

Engagement: Investors enter into an active and long-term dialog with companies with the aim of improving their conduct with regard to ESG criteria.

The schweizerische Pensionskassenverband ASIP is the umbrella organization for pension funds. It has developed ESG reporting standards for pension funds. These aim to ensure that ESG criteria are taken into account in the investment process of pension funds. Reporting on ESG implementation is also being sought, which would improve benchmarking. In the future, pension funds should increasingly explain how they manage their portfolios and integrate ESG criteria in order to promote transparency and avoid greenwashing.

Exclusion of selected investment objects from the investment universe, e.g. companies that violate certain criteria. Exclusion criteria can be standards-based or value-based:

• Standards-based: Investments are checked for compliance with international standards and norms, such as the UN Global Compact or ILO core labor standards.

• Value-based: Investments are checked for compliance with subjective values, personal preferences or ethical ideals and excluded if necessary. Examples of this could be the exclusion of weapons or gambling.

Selection of the best companies in an industry, sector or industry based on ESG criteria.

CO2, also known as carbon dioxide, is a colorless and odorless gas that is produced by the combustion of carbon and the respiration of living organisms. It occurs naturally in the earth's atmosphere and is a greenhouse gas (like methane, for example). CO2 emissions in specific terms refer to the emissions resulting from the combustion of fossil fuels and the production of cement. Such CO2 emissions can become problematic if they cause the CO2 concentration in the atmosphere to rise too high and increase the natural greenhouse effect. This leads to a rise in the earth's temperature, which in turn results in climate change (see Paris Climate Agreement / net zero).

In addition to CO2, there are other greenhouse gases such as methane and nitrous oxide, which contribute to the greenhouse effect to varying degrees and remain in the atmosphere for different lengths of time. A CO2 equivalent is the amount of CO2 emissions required to cause the same climate impact as a certain amount of another greenhouse gas. CO2 equivalents are referred to by the abbreviation “CO2e”.

The carbon footprint refers to the amount of CO2 emissions emitted in relation to the company's value. This indicator is used to assess the environmental impact of a company or sector in relation to climate change. Different sectors naturally have different CO2 emission profiles. Therefore, direct comparisons can be misleading (see ESG score).

CO2 intensity refers to the amount of CO2 emissions emitted in relation to sales. This indicator is used to assess the environmental impact of a company or sector in relation to climate change. Different sectors naturally have different CO2 emission profiles. Therefore, direct comparisons can be misleading (see ESG score).

Refers to the ecological aspects and impact of a company's business activities on the natural environment. For example, if a company reduces its carbon footprint, the company's rating in the “Environment” dimension improves.

ESG stands for Environment, Social and Governance. ESG refers to non-financial factors and criteria that are taken into account during the investment process and can have a significant impact on the financial performance of portfolios.

ESG-Kriterien werden explizit und als essentieller Bestandteil in den Anlageprozess und die finanzielle Fundamentalanalyse von Anlageobjekten einbezogen.

Beim ESG-Rating (fälschlicherweise oft mit ESG-Score gleichgesetzt) wird die ESG-Performance eines Unternehmens auf einer Buchstabenskala angegeben (analog zu Kreditratings). Hier erschweren methodologische Unterschiede bei den Bewertungsplattformen Vergleiche zwischen den Ratings verschiedener Plattformen.

Ein ESG-Score ist eine quantifizierte Bewertung der Leistung eines Unternehmens im Hinblick auf verschiedene Nachhaltigkeitskennzahlen (siehe E, S, G). ESG-Bewertungen werden von diversen Bewertungsplattformen erstellt, wobei jeweils unterschiedliche Methodiken, Gewichtungen und Kriterien für die Bewertung von Umwelt-, Sozial- und Governance-Faktoren anwendet werden. Führende Anbieter sind MSCI ESG Research und Sustainalytics. Diese methodologischen Unterschiede bei den Bewertungsplattformen erschweren Vergleiche zwischen den Scores verschiedener Plattformen.

Eine ESG- oder Nachhaltigkeitsstrategie kann einerseits den Ansatz eines Unternehmens im Umgang mit relevanten Nachhaltigkeitsthemen definiert. Dabei umfasst die ESG-Strategie die drei Säulen Umwelt, Soziales und Governance. Das Ziel ist, die im Rahmen der aktuellen und auch künftigen Geschäftstätigkeit zu berücksichtigenden Nachhaltigkeitsfaktoren, zu adressieren. Andererseits können auch im Anlagegeschäft ESG-Strategien verfolgt werden. Dabei treffen Investorinnen und Investoren ihre Entscheidungen gemäss der ESG-Strategie. Es gibt dabei eine Vielzahl von möglichen ESG-Strategien. Namentlich sind dies, Ausschlüsse (Negativselektion), Positivselektion, Best-in-Class, ESG-Integration, thematisches Investieren, Impact Investing, aktive Aktionärspolitik und Klimastrategien.

Bezieht sich im Allgemeinen auf die Verfahren und Mechanismen, die bestimmen, wie ein Unternehmen geführt wird. Wichtig sind dabei Aspekte wie Transparenz, so zum Beispiel, wenn ein Unternehmen auf Transparenz in seiner Berichterstattung setzt und ethische Grundsätze in seine Geschäftsstrategien integriert.

Anlagen, die neben finanziellen Zielen auch eine messbare positive ökologische oder soziale Wirkung anstreben.

Nachhaltige Anlagestrategien werden so ausgerichtet, dass sie dazu beitragen, finanzielle Klimarisiken zu kontrollieren oder eine positive Klimawirkung zu fördern.

Unter dem Begriff «Netto-Null» versteht man, dass sämtliche Treibhausgase, die in die Atmosphäre gelangen durch die Entfernung aus der Atmosphäre ausgeglichen werden. Somit bleibt die Konzentration von Treibhausgasen in der Atmosphäre stabil.

Typischerweise orientieren sich die Klimaziele von Investoren an den Vorgaben des Pariser Klimabkommens der Vereinigten Nationen. Demnach soll die durch den Menschen verursachte globale Erderwärmung bis 2050 auf deutlich unter 2 Grad Celsius und möglichst nahe an 1.5 Grad Celsius gegenüber dem vorindustriellen Niveau begrenzt werden.

Auswahl von Investments, die ESG-Kriterien besonders gut erfüllen oder die ein ESG-Rating über einem bestimmten Schwellenwert erreichen.

Umfasst die Beziehungen eines Unternehmens zu seinen Mitarbeitern, Lieferanten, Kunden und der breiteren Gemeinschaft, in der es tätig ist. Bei der Bewertung werden unter anderem Aspekte wie Arbeitsbedingungen, die Einhaltung von Menschenrechten oder soziale Standards in der Lieferkette berücksichtigt. Wenn sich ein Unternehmen beispielsweise für Verbesserungen der Arbeitssicherheit einsetzt, so führt dies zu einer besseren Bewertung in der Dimension «Social».

Die Science Based Targets Initiative (SBTi) definiert ein Rahmenwerk, das von Unternehmen zur Festlegung von wissenschaftsbasierten Emissionsreduktionszielen verwendet werden kann. Mit SBTi-konformen Klimazielen signalisieren Unternehmen, eine glaubwürdige Strategie zur Verringerung von Treibhausgasemissionen gemäss dem Pariser Klimaabkommen.

Es existieren drei verschiedene Kategorien, in denen Firmen oder Organisationen Treibhausgase ausstossen. Diese Kategorien sind als „Scopes“ bekannt.

• Scope 1: Includes emissions resulting from the direct activities of the company or organization. For example, the combustion of diesel in company-owned trucks would count as a company's Scope 1 emissions.

• Scope 2: Includes all emissions caused by the company through the purchase of electricity, heating or cooling that occur outside the company. They represent a form of indirect emissions.

• Scope 3: Includes emissions that result from the company's activities but originate from external sources outside the company's direct control. These indirect emissions occur along the entire upstream and downstream value chains. For example, Scope 3 emissions include the production of goods purchased by the company or the emissions caused by the extraction of raw materials used by the company.

Asset managers are obliged by the European Disclosure Directive (EU Sustainable Finance Disclosure Regulation) to transparently qualify their products in accordance with their sustainability profile. There are three different categories (called articles) for this:

Article 6: This category includes products without ESG ambitions.

Article 8: Funds with this classification advertise that they invest in an environmentally conscious or socially responsible manner and that corresponding characteristics are taken into account in the investment process.

Article 9: Funds with the highest classification have an explicit sustainability objective and must clearly explain how these objectives are to be achieved.

Stranded assets are assets of companies that could prove to be either worthless or even a high-risk financial obligation in the future due to long-term socio-environmental or technological transformation processes. One example of this is fossil fuels.

The Swiss Climate Scores are the result of a collaboration between various NGOs, the Swiss Bankers Association and other industry experts.They aim to make the climate compatibility of investments transparent. The scores show the extent to which financial investments are in line with international climate goals (e.g. the Paris Climate Agreement). To do this, the scores use various indicators, including greenhouse gas emissions or exposure to fossil fuels.

TCFD stands for "Task Force on Climate-related Financial Disclosures". This is a working group from the Financial Stability Board (FSB) that aims to increase transparency regarding climate-related financial information. The goal is for investors to be able to incorporate this information more effectively into their decision-making processes. The improved reporting is intended to help ensure that financial decisions are made that contribute to a more sustainable global economy.

Investments in companies that have a sustainability connection from the business activities. For example, these are companies with business models for climate protection or health promotion.

UNPRI (United Nations-supported Principles for Responsible Investment) is an initiative supported by the UNEP Finance Initiative and the UN Global Compact. It promotes the integration of ESG criteria into investors' investment decisions. The aim is to contribute to a sustainable global economy through responsible investment practices and to promote long-term value creation. Signatory institutions commit to adhering to six principles that revolve around ESG.