ESG Portfolio Management engages with the companies it is investing in to improve the sustainability and to support the transition towards a climate-neutral economy
We are guided by the United Nations Sustainable Development Goals (SDGs). In addition to our funds, our entire organisation focuses on sustainability. Our actions are always an expression of our values. Consistency in achieving the sustainability goals is central to this. Our investments focus on the goals “zero hunger” (#2), “good health and well-being” (#3), “quality education” (#4), “affordable and clean energy” (#7), “responsible consumption and production” (#12) and “climate action” (#13).
As we understand climate change as a serious risk and threat with high likelihood and impact, we support the adoption of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). It is a key priority of ESG Portfolio Management to measure, understand and report climate related risk of all funds and portfolios. Currently, we publish the carbon intensity of the funds on a monthly basis in our standard report. We are working intensively to further reduce carbon emissions. On the one hand, we engage with companies to achieve this goal. On the other hand, we do not invest in companies with very high emissions or in companies that show no commitment to reduce emissions. We overweight technology leaders which have a competitive advantage in reducing carbon emissions and successfully perform adaption and mitigation.
ESG Portfolio Management performs climate scenario analysis to assess future climate-related risks and opportunities. The company recently calculated again that the holdings in both funds cause on average global warming of less than 1.75°C. We received the highest assessment of five leaves by Climetrics for both funds. Only 5% of 19.000 analysed funds receive this assessment.
We want to achieve the triple win:
- We believe that sustainable products and services have better market opportunities. This provides competitive advantages.
- The shares and bonds of these companies are expected to offer more opportunities with lower risks in the long term.
- Sustainable products and services, climate protection and waste reduction have a positive impact on many people worldwide.
ESG Portfolio Management has received several awards
In 2020, the firm received the Sustainable Investment Award Multi-asset manager of the year and achieved the highest result in the TELOS ESG check. The organisation Principles for Responsible Investment (PRI) included ESG PM in its Leaders’ Group. In 2021 ESG PM won the ESG Investing Awards in the categories Multi Asset and Fixed Income. Both funds repeatedly received the FNG label with three stars (highest rating).
About the author:
Christoph M. Klein, CFA, is founder and manager at ESG Portfolio Management, an award- winning boutique for sustainable investments. He currently serves as a member of the CFA ESG Technical Committee and the DVFA Sustainable Investing Commission.