Our responsibility

Social responsibility is part of the philosophy of Erste Asset Management. Therefore we do not only see ourselves as responsible employer, but we attach great importance to the responsibility of our products and services. We, as company, dedicate ourselves to socially and environmentally responsible behaviour. Since 2001, we have included investment strategies in our range of products that comply with Environmental, Social, and Corporate Governance (ESG) criteria. With assets under management of EUR 5.22bn, we hold the biggest range and volume of responsible-ethical investments in Austria (12/31/2018). In order to ensure that our solutions meet the high standards of our clients, we have set ourselves strict guidelines and cooperate with a number of well-renowned partners.

The Montréal Carbon Pledge

As the first investment company in Austria, Erste Asset Management has decided to sign the agreement and will therefore measure and publish the carbon footprint of their portfolio on an annual basis.

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:

  • We will incorporate ESG issues into investment analysis and decision-making processes.
  • We will be active owners and incorporate ESG issues into our ownership policies and practices.
  • We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  • We will promote acceptance and implementation of the Principles within the investment industry.
  • We will work together to enhance our effectiveness in implementing the Principles.
  • We will 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.

 

ERSTE RESPONSIBLE RETURN - The ESG Letter

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

 

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 refrain from engaging in derivatives on food in all our investment funds and client portfolios. For our funds of 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 sustainable funds. All stocks have been sold by the end of the year 2015. Thereby, Erste Asset Management further contributes to managing climate change.

Exclusion Criteria for the Responsible Funds

       

Minimum Requirements

(affects all mutual funds of Erste AM)

ERSTE RESPONSIBLE RESERVE

ERSTE RESPONSIBLE BOND

ERSTE RESPONSIBLE BOND EURO CORPORATE

ERSTE RESPONSIBLE BOND GLOBAL IMPACT

ERSTE RESPONSIBLE STOCK AMERICA

ERSTE RESPONSIBLE STOCK EUROPE

ERSTE RESPONSIBLE STOCK GLOBAL

ERSTE RESPONSIBLE STOCK DIVIDEND

ERSTE RESPONSIBLE BOND EMERGING CORPORATE

ERSTE WWF STOCK ENVIRONMENT
   

NUCLEAR ENERGY

Producers and feeding into the grid

 

zero tolerance

max. 5% of sales

zero tolerance

Producers of nuclear reactor core components

 

 

max. 5% of sales

zero tolerance

zero tolerance

Distributors of nuclear reactor core components

 

 

max. 5% of sales

zero tolerance

max. 5% of sales

  BANKS AND FINANCIAL SERVICES

 

Systematic violations of accepted business practices

 

zero tolerance

 

zero tolerance

  FRAUD AND CORRUPTION

 

Disregard of legal regulations

 

zero tolerance

zero tolerance

zero tolerance

 

EMBRYONIC RESEARCH

Specialized companies

 

zero tolerance

zero tolerance

zero tolerance

 

GAMBLING

Operators and specialized manufacturers

 

max. 5% of sales

max. 5% of sales

zero tolerance

 

GMO

Producers of manipulated seeds

 

zero tolerance

zero tolerance

zero tolerance

Use of manipulated seed

 

 

zero tolerance

zero tolerance

 

CHILD LABOUR

Conscious use of child labor

 

zero tolerance

zero tolerance

zero tolerance

 

COAL MINING

Coal mining and liquefaction to fuels

max. 30% of sales

max. 5% of sales

max. 5% of sales

zero tolerance

Share of energy production from coal

 

max. 20% of production

max. 20% of production

zero tolerance

 

PORNOGRAPHY

Producers of pornography

 

zero tolerance

zero tolerance

zero tolerance

Merchant of pronography

 

max. 10% of sales

max. 10% of sales

zero tolerance

  PREGNANCY TERMINATION Commercial abortion clinics and pharmaceuticals   zero tolerance zero tolerance zero tolerance
 

ARMS/WEAPONS

Producers and distributors of weapons systems, outlaw weapons, ABC weapons

exclusion

Outlaw weapons

zero tolerance

zero tolerance

zero tolerance

Producers of other armaments

 

max. 5% of sales

max. 5% of sales

zero tolerance

 

TABACCO

Producers of end products

 

zero tolerance

max. 5% of sales

zero tolerance

 

ANIMAL TESTING

Unless required by law

 

zero tolerance

 

zero tolerance

 

UNCONVENTIONAL OIL/GAS

High proportion of fracking, tar and oil sands reserves

 

max. 20%-share of unconventional reserves

 

zero tolerance

 

Violation of HUMAN RIGHTS

Violation of internationally recognized principles

 

zero tolerance

zero tolerance

zero tolerance

 

Violation of LABOUR RIGHTS

Massive violation of the ILO

 

zero tolerance

zero tolerance

zero tolerance

C

O

U

N

T

R

I

E

S

  LABOUR RIGHTS

 

Countries with particularly low standards

 

zero tolerance*

no relevance

no relevance

 

NUCLEAR ENERGY

Share of primary energy production
(3-year average)

 

from 40 % *

no relevance

no relevance

 

AUTHORITARIAN REGIME

Classification by. „Freedom House“ not freei

 

zero tolerance*

no relevance

no relevance

 

CHILD LABOUR

Countries with widespread use of child labor

 

zero tolerance*

no relevance

no relevance

  CLIMATE PROTECTION

 

Non-ratification of the kyoto protocol

 

zero tolerance*

no relevance

no relevance

Non-ratification of the paris convention

 

HUMAN RIGHTS

Countries with massive restrictions

 

zero tolerance*

no relevance

no relevance

 

MILITARY EXPENSES

Military expenditure/BIP

 

from 3% *

no relevance

no relevance

 

DEATH PENALTY

Death penalty not completely abolished

 

zero tolerance*

no relevance

no relevance

 

FREEDOM OF ASSOCIATION

Countries with massive restrictions

 

zero tolerance*

no relevance

no relevance

          *Only relevant for investments in government bonds    

D

I

V

  Since 2013, ERSTE ASSET MANAGEMENT pledges to refrain from investing in derivatives on food in all of its managed funds and customer portfolios:

Please note the warnings at the bottom of the page.

Engagement

As committed investor we try to engage in an active dialogue with the invested companies and governments within the framework of our responsibility process. We point at weak spots in the area of environmental, social, and governance criteria and then try to find a solution to improve on the status quo together with the company. Our engagement is not only a question of responsibility, but also contributes to minimising risks and can thus improve the long-term investment success of our clients. We engage with companies that the funds of the ERSTE-RESPONSIBLE family of funds invest in. In some cases we also contact companies that we are not invested in – after all, we also want to effect changes in companies that are not investable to us due to their shortcomings in the area of responsibility. We may exclude companies from our investment universe that persistently refuse to enter into a dialogue with us.

In our engagement process we follow four strategies:

  • Thematical engagement: we address ESG-relevant topics at regular intervals and report publicly on them. This way we not only ensure that our engagement remains focused, but we also increase the willingness of companies to enter into a dialogue with us. We frequently report on our topical engagement in our investment magazine ERSTE RESPONSIBLE RETURN - The ESG Letter
  • Austria engagement: as market leader in Austria we feel obliged to put a specific focus on domestic engagement activities. This is where we leverage our strong market position and reputation.
  • Engagement cooperation: we bundle our influence with other engaged investors in order to facilitate change. In doing so we often act as leader in responsibility networks such as PRI.
  • External engagement partners: we cooperate with a specialised partner, GES (Global Engagement Service). The agency bundles the capital of numerous investors who participate in order to be accepted as equal partner by the contacted company. GES is globally active and supports Erste Asset Management especially in developing countries.

Once a year we issue a detailed report on our engagement activities, together with GES.

Erste AM Engagement guideline

Erste AM Engagement & Voting Reports

Mediate Engagement via GES (Global Engagement Services)

Voting

Part of our engagement as investor is the concept of “active ownership”, i.e. the active exercising of our voting rights at the general annual meetings of companies that we are invested in. In order to ensure transparency and consistency of our voting, we have compiled a detailed guideline and frequently and publicly report on our voting behaviour on our voting portal.

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.

Stay up to date.

In the Erste AM blog our experts share their thoughts on current trends and developments in the field of responsibility.

Cooperation and memberships

In order to ensure the high quality of our responsible investment process and to expand our market leadership, we cooperate closely with a range of partners that specialise in responsibility. We complement our internal research with external perspectives, thus gaining objectivity and increasing the effect of our engagement. To us, responsibility is a process that has to be developed on an ongoing basis. Therefore we are also members of a number of forums and associations that promote research on responsibility.

Memberships

Our quality seals and awards

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.

Dr. Anna Durnová, Ph.D.

Chair, Advisory Board expert for technology and medicine

Dr Durnová is a researcher at the Vienna University with a focus on political science and healthcare politics. She is also the author of numerous publications. She has held the Hertha Firnberg Scholarship since 2012 and is member of the research platform “Life-Science-Governance”.

Günter Benischek

Günter Benischek

Advisory Board expert for social affairs / NGOs

As board member of Zweite Sparkasse and Head of Social Banking of Erste Bank Österreich, Günter Benischek contributes in-depth know-how and experience in economic and social action.

Ing. Mag. Klaus Bergsmann

Ing. Mag. Klaus Bergsmann

Advisory Board expert for environmental questions

The long-term successful banker has been Head of Group Environmental Management of Erste Group Bank AG since 2011. He is active member of a working group on the financial and insure sector. This group deals with ways of introducing ecological aspects into the financial sector.

Dr. Anna Durnová, Ph.D.

Dr. Klaus Gabriel

Advisory Board expert for religion/ethics

Dr Gabriel has worked in investment advisory for more than 30 years and has been Director of the Corporate Responsibility Interface Center (CRIC) since 2010. He holds research and teaching positions at numerous German-speaking universities and is an expert in business ethics.

Univ.-Prof. Dr. Gyöngyi Lóránth

Univ.-Prof. Dr. Gyöngyi Lóránth

Advisory Board expert for governance

Dr Lóránth is an expert in governance as well as financial and corporate strategy. She holds a PhD in economics from the University of Brussels and from the University of Barcelona. She is also a university lector and teaches, among other places, at the universities of Oxford and Cambridge.