Sustainability in the investment process Sustainability guidelines for the selection of the investment universe

For a stock to find its way into the OLZ portfolio at all, it must comply with our sustainability guidelines. There are various ESG exclusion criteria to consider.

What are some examples of ESG exclusion criteria?

Companies with an MSCI ESG rating of «CCC».

MSCI rates companies on sustainability with an ESG score between 0 (very low) and 10 (very high). The database includes: Macro data, company data, government databases, newspapers, academic publications and news. The metrics are standardized within industries (best-in-class approach). From the scoring, the MSCI ESG rating is derived as follows in the example of «Wells Fargo»:

Source: MSCI ESG Database, 27.11.20 - Valuation as of: 15.11.2020

Companies with an MSCI «Controversy Red Flag»

Exclusion of companies that are involved in at least one significant controversy in the areas of environment, customers, human rights, labor rights and supply chains, and corporate governance. In the «Walmart» example, the result is as follows:

Source: MSCI ESG Database, 27.11.20 - Valuation as of: 15.11.2020

Companies with «fail» regarding UN Global Compact principles

The UN Global Compact list is a cooperation of companies with the United Nations with the purpose of making globalization more ecological and social. The pact was launched on January 31, 1999 by UN Secretary General Kofi Annan at the WEF in Davos. To date, over 9,200 companies worldwide have signed the UNGC principles. The UNGC follows 10 basic principles:

  • Respect and promote human rights

  • Ensuring that human rights are not violated

  • Acceptance of trade union involvement and collective bargaining   

  • Renunciation of all forms of forced labor

  • Participation in the abolition of child labor

  • No discrimination with regard to employment and occupation

  • Active prevention of environmental hazards

  • Promoting greater environmental awareness

  • Promoting the development and diffusion of environmentally friendly technologies

  • Combating corruption (incl. extortion and bribery) 

In the «Volkswagen» example, the result is as follows:

Source: MSCI ESG Database, 27.11.20 - Valuation as of: 24.11.2020

Companies on the SVVK-ASIR exclusion list

The Swiss Association for Responsible Investment (SVVK - ASIR) was founded in December 2015 by major institutional investors. The purpose of the association is to provide services to its members so that they can take a holistic approach to their responsibility towards the environment, society and the economy as part of their investment decisions. The following table provides an overview.

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