Our strategies for dealing with sustainability risks
Transparency in sustainability risk management strategies (Article 3 of REGULATION (EU) 2019/2088 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 November 2019 on sustainability-related disclosures in the financial services sector - Disclosure Regulation)
As a company, we want to contribute to a more sustainable, resource-efficient economy with the aim of reducing the risks and effects of climate change in particular.
According to Art. 2 No. 22 of the Disclosure Regulation, sustainability risks are events or conditions in the environmental, social or governance areas whose occurrence could have an actual or potential material adverse effect on the value of an investment.
As part of our activities, we generally take sustainability risks into account. We are also a signatory to the UN Principles for Responsible Investment (PRI).
The consideration of sustainability risks relates to the above-mentioned areas of environment (E), social standards (S) and governance (G).
The areas typically cover the following (non-exhaustive list):
Environment:
- Climate protection
- Adaptation to climate change
- Protection of biodiversity
- Sustainable use and protection of water and marine resources
- Transition to a circular economy, waste prevention and recycling
- Prevention and reduction of environmental pollution
- Protection of healthy ecosystems
Social:
- Ensuring occupational safety and health protection
- Appropriate remuneration, good working conditions, diversity and training and development opportunities
- Freedom of association and collective bargaining
- Ensuring adequate product safety, including health protection
- Applying the same standards to companies in the supply chain
- Inclusive projects and consideration of the interests of communities and social minorities
- Tax honesty
Governance:
- Measures to prevent corruption
- Sustainability management by the Executive Board and Supervisory Board
- Executive Board compensation linked to sustainability
- Enabling whistle-blowing
- Guaranteeing labour rights
- Ensuring data protection
- Disclosure of information
Environmental conditions, social upheaval and/or poor corporate governance can have a negative impact on the value of investments and assets in a number of ways. This means that these so-called sustainability risks can have a direct impact on the financial, earnings, and reputational position of an investment. Because such risks cannot be completely ruled out, we have developed specific strategies to identify and limit sustainability risks in the financial services we offer.
● We consider sustainability risks by identifying relevant issues during our business activities, for example, through ongoing monitoring and analysis of public news sources that may indicate potential sustainability-related risks, and acting accordingly.
● Furthermore, through the Sauren Responsibility Scoring process, which is an integral part of our fund manager analysis, we aim to have a positive influence in limiting sustainability risks. Before an investment in a Sauren fund-of-funds is made, all potential target funds are evaluated using the Sauren Responsibility Scoring. This process assesses the extent to which each target fund manager incorporates environmental aspects, social factors, and good corporate governance into their investment decisions.
Although our fund selection process still allows for investments in target funds that may not yet fully integrate environmental, social, or governance (ESG) aspects, the Sauren Responsibility Scoring can contribute to greater responsibility by encouraging fund managers to reflect on and be more aware of ESG-related topics through dialogue. This includes checking whether specific exclusion criteria for the target investments of certain Sauren funds are applied.
In this context, we are in a position to align investment decisions and recommendations with environmental, social, and governance values and to manage associated sustainability risks.
● Furthermore, our entire Sauren Research & Portfolio Management team is highly qualified with regard to topics relating to the inclusion of environmental aspects, social aspects or aspects of good corporate governance in fund manager analysis. Thanks to the close dialogue with fund managers, which characterises the unique Sauren investment philosophy, our Research and Portfolio Management team is always up to date. Regular participation in specialist events rounds off the professional training and development programme.