Exclusion criteria for our investment funds
We have defined framework conditions for environmentally and socially responsible investments for our investment solutions. Depending on the product line, different exclusion criteria apply in relation to controversial business practices.
Our exclusion criteria
We monitor new findings, social norms and trends, and adapt the criteria if necessary. In doing so, we rely on sources such as MSCI ESG, the World Bank or Freedom House. Depending on the sustainability approach, the exclusion criteria concern one or more of the following problem areas:
- Risk to society and health
- Climate change
- Decline in species diversity
Exclusion criteria based on SVVK-ASIR
In all of our fund assets under management – both active and passive – we apply exclusion criteria based on the Swiss Association for Responsible Investments (SVVK-ASIR). These exclusion criteria predominantly eliminate manufacturers of controversial weapons (such as anti-personnel mines, cluster munitions and nuclear weapons not permitted by the Nuclear Non-Proliferation Treaty). In addition, government bonds from states recommended for exclusion by SVVK-ASIR can also be excluded. We reserve the right to exclude or not to exclude additional companies at our own discretion.
Additional exclusion criteria
Responsible funds
Responsible funds
In the case of the Responsible funds, we supplement the exclusion criteria based on SVVK-ASIR with additional criteria and thereby exclude other companies with ESG-critical business models:
- Manufacturers of military technology, weapons and ammunition
- Producers of pornography
- Exploitative child labour
- The extraction of coal (> 5% of revenue; excluding metal production)
- Companies with coal reserves (excluding metal production).
In the case of the latter two exclusion criteria, investments may, by way of an exception, be made in green or sustainability bonds of the companies in question. The capital raised by these bonds is earmarked and will be used to finance the energy transition, to reduce or prevent environmental and climate losses, or more generally to achieve the United Nations’ development goals. In the event of potential violations by companies of the UN Global Compact Principles (United Nations standard on human and labour rights, environmental standards and anti-corruption) resulting from our screening, we seek dialogue as part of our engagement and urge companies to change their behaviour. If no change in behaviour occurs within a reasonable period of time, existing investments will be sold.
More detailed information on the application of exclusion criteria can be found in the brochure «Application of exclusion criteria».
Sustainable funds
Sustainable funds
With the Sustainable funds, we invest in companies with a sustainable business model. They must contribute to achieving at least one of the United Nations' 17 Sustainable Development Goals (UN SDGs), or otherwise score above average in terms of criteria for sustainable economic operations (ESG Leader). The exclusion criteria are significantly more comprehensive than those for the Responsible funds. The tolerance limits are strict and are typically zero percent of revenue (including subsidiaries).
In addition to the strict exclusion criteria for companies and countries, we support the necessary change and, above all, the transition to more climate-friendly technologies and financing tied to the protection of biodiversity by exceptionally overriding certain exclusion criteria with earmarked green and sustainable bonds.
Exclusion criteria affected by these exceptions can be found in the brochure «Application of exclusion criteria» linked below.
Additional exclusion criteria Sustainable:
- Manufacture of weapons and ammunition
- Production of military hardware
- UN Global Compact violations
- Exploitative child labour
- Production of pornography
- Operation of nuclear facilities
- Uranium extraction
- Manufacture of nuclear reactors
- Genetic engineering: human medicine
- Manufacture of tobacco and smokers' accessories
- Alcohol production (more than five percent of revenue)
- Gambling (more than five percent of revenue)
- Intensive livestock farming
- Coal extraction
- Coal reserves
- Operation of fossil power plants (more than five percent of revenue)
- Extraction of natural gas
- Oil extraction
- Conventional car manufacturers without a comprehensive transition strategy for using alternative, more climate-friendly drive systems
- Manufacture of aircraft
- Airlines
- Cruise ship operators
- Genetic engineering (release of GMOs)
- Unsustainable fisheries and aquaculture
- Unsustainable forestry
- Non-certified palm oil (RSPO < 50%)
Our exclusion criteria for states:
- Countries with socio-economic risks
- Countries with a low level of democracy and freedom
- Countries applying the death penalty
- Countries with high military budgets (more than four percent of GDP)
- Countries with a share of nuclear power of more than 50 percent of the electricity mix that plan to expand nuclear energy
- Countries that have not ratified the Paris Climate Agreement
- Countries that have not ratified the Convention on Biological Diversity (CBD)
- Corruption (corruption index < 35)
- States that have not signed the Non-Proliferation Treaty