Erste Asset Management (Erste AM) has expanded in the area of ethics and environmental issues. It issued the first sustainable mutual fund as early as in 2001, and since 2006, the fund has been co-managed by WWF. With a total of 15 sustainable mutual funds and numerous special funds with assets under management of €6.6bn, the company is taking the next step by making sustainable criteria an integral part of a large number of its investment decisions. This will raise the assets under management that explicitly take into account ESG criteria to €13.4bn (as of 31 January 2020).
"It is our task to manage the capital we have been entrusted with to the best of our abilities. We know that by taking into account sustainable criteria, we can provide our clients with a better risk-adjusted performance in the long run. Of course, this does not change the basic structuring of the funds," as Heinz Bednar, CEO of Erste AM, pointed out.
Erste AM has already implemented certain minimum criteria that the individual securities of its actively managed mutual funds have to fulfil. For example, Erste AM excludes investment in companies that operate in the field of banned weapons. This also applies to investments in derivatives instruments on food and to investments in companies where coal accounts for more than 30% of total sales.
As the first investment company in Austria, Erste AM also decided in 2015 to sign the Montréal Carbon Pledge. This means the company agreed to measure and publish the carbon footprint of its portfolios. In addition, it operates as sustainable investor by exercising the voting rights held by its investment funds to support ESG shareholder petitions.
In addition to the fundamental criteria taken into account so far (e.g. ROE, P/E ratio etc.), our fund managers will be considering environmental, social, and governance (ESG) aspects for parts of our product range. This means that in the future these criteria will not only be relevant across a few designated, sustainable funds, but they will be part of the investment process across the majority of our mutual funds.
For its clients, nothing else will change; the underlying structuring of the various funds will of course remain the same.
On top of more stringent criteria, Erste AM will also integrate sustainability more within the company and make it part of the corporate mission statement. In doing so, we calculate the carbon footprint of Erste AM and try to establish with external partners how EAM can optimise its resource input (e.g. stationary) and support its employees in improving their behaviour in terms of environmental friendliness (e.g. transport). Also, the company has invested its equity capital sustainably since 2016.