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.
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.
Engagement via dialog and voting rights
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)
- Conflict of Interest Policy - Proxy Voting 2020
- Proxy Voting Results 2019
- Metzler Asset Management: Engagement Summary 2019
Controlling and reporting
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.