Responsible investment: an element of portfolio optimization
In addition to assessing purely financial criteria, Metzler Asset Management GmbH aims to determine whether and in what way companies consider environmental, social and governance aspects. A broader database aims to improve company stock picking and thus the risk-return profile of the portfolio.
ESG in the investment process
ESG is short for “Environment, Social and Governance.” The sustainability aspects that we at Metzler Asset Management GmbH include in our investment process are exclusionary screening, ESG integration and engagement, as well as ESG controlling and reporting.
For all equity and corporate-bond investments, exclusionary screening is applied based on 120 international norms and conventions. The data stems mostly from MSCI ESG Research. In cases of “very severe controversies,” i.e. serious infringements of these standards, companies are excluded from our investment universe. Upon client request, we also take other aspects into account in the investment process, such as conclusions drawn from data provided by ISS-oekom.
Goal: better risk/return profile
The aim of ESG integration is to improve the risk/return profile by integrating sustainability aspects into the traditional investment analysis process.
For example, we evaluate the economic impact of the following aspects on a company’s business success:
- ESG scores issued by MSCI ESG Research
- Sector-specific key performance indicators (KPIs)
- ESG aspects of company business models.
Metzler Asset Management GmbH has entered into a cooperation agreement with Bank of Montreal Global Asset Management (BMO GAM). BMO and the portfolio managers themselves discuss business-relevant ESG challenges in their talks with companies. BMO also exercises voting rights. BMO's reports on voting rights and engagement milestones are partially included in the ESG reporting for our clients.
Information on proxy voting:
- Guidelines for Exercising Voting Rights at Annual General Meetings by Metzler Asset Management GmbH
- Global Corporate Governance Guidelines (BMO)
- Responsible Ownership Policy (BMO)
- Proxy Voting Results 2017 - I
- Proxy Voting Results 2017 - II
- Proxy Voting Results 2017 - III
- Conflict of Interest Policy - Proxy Voting 2018
ESG controlling and reporting of Metzler Asset Management's portfolios
Through ESG controlling, we continuously improve ESG integration. For Master KVG (capital management companies), special alternative investment funds (“Spezialfonds”) and retail mutual funds, Metzler Asset Management also provides evaluation of ESG issues such as greenhouse gas emissions.
The team at Metzler Asset Management GmbH consults regularly on ESG issues with other members of the BVI’s ESG Working Group. This includes integrating the guidelines for responsible investing into the BVI Rules of Good Conduct.
As of 1 August 2018, Metzler Asset Management GmbH is a full member of CRIC e.V. The association's main areas of activity include engagement, research and the creation of awareness for responsible investments in society, politics and business.
Since 2002, Metzler has been a member of Forum Nachhaltige Geldanlagen (FNG), an industry association promoting sustainable investment. This association aims to raise awareness of sustainable solutions in investing and applying them to make a positive impact on the direction of social and environmental change.
Metzler Asset Management GmbH works with ISS-oekom to develop ethical and/or sustainable exclusionary screening for individual clients and/or “best-in-class” approaches to the management of institutional funds.
The Accelerating Sustainable Finance initiative was launched on 23 May 2017. It was established by Deutsche Börse Group along with major stakeholders from the Frankfurt/Main financial centre. On 5th February 2018, Emmerich Müller, personally liable partner of Metzler Bank, signed the "Frankfurt declaration" on behalf of Bankhaus Metzler. The Frankfurt declaration is a general letter of intent about the creation of sustainable infrastructures in the financial sector. It demonstrates the signatories’ intention to define the framework conditions for sustainable finance and to put concrete initiatives in place in the Frankfurt financial centre. These are directed towards the identification of innovative business areas and the responsible handling of risks, among other things.
In 2012, Metzler Asset Management GmbH was one of the first German asset managers to sign the Principles for Responsible Investment (PRI), a voluntary commitment by signatories established in 2005 on the initiative of the United Nations. More than 1,400 members from 50 countries, representing over USD 59 trillion in invested capital, have now joined this initiative. For more information, please click here.