As an asset management company, we believe we have two reasons to be committed to sustainability. The first is social in nature, since capital has the greatest power when it comes to initiating and implementing change processes within a company and correcting them where necessary. This is why we favour ecologically sound bond investments such as green bonds and focus our equity investments on socially relevant themes while facing up to our responsibility as a sustainable shareholder. We therefore invest primarily in companies that operate ethically and sustainably in their respective fields.
ESG integration supports superior long-term returns: A company’s ability to assess business risks related to climate change have become essential for its competitive position and long-term stock price appreciation. By taking sustainability criteria into account, the risk-return profile of portfolios can be improved in the long term.
Sustainable investment is thus integral to Bantleon’s approach: environmental, social and governance (ESG) criteria are taken into account in investment decisions. In addition to excluding stocks through conventional sustainability screening, the integration of ESG information adds value to the traditional investment process. The aim is to gauge risks more effectively as well as to generate more sustainable and ultimately higher returns.
Our sustainability process comprises four steps:
1. Thematic focus
Within the framework of a multi-thematic investment approach, preference is given to investing in the megatrends digital change, demographic change and energy transition. These themes directly address the most urgent social challenges that will accompany societies and investors over several decades. When investing, Bantleon pays particular attention to choose companies that make a positive contribution to achieving the UN sustainability goals.
2. Excluding stocks from the investment universe
Both the Ottawa Treaty banning anti-personnel mines and the Oslo Convention on Cluster Munitions are supported. In addition, Bantleon does not invest in food products directly or via derivatives and thus does not speculate on food shortages. We support business models with a positive social influence and exclude socially harmful sectors from the investment universe.
3. Defining relevant, non-financial data specific to each theme
A range of non-financial criteria can influence the success of business models in different sectors. To begin with, therefore, specific criteria are defined and weighted at industry level. A detailed analysis of how the funds raised are used is essential for fixed-income investments, especially green bonds.
4. Incorporating non-financial data into the selection process
Relevant, non-financial data that have a direct impact on a company’s core business flow into Bantleon’s fundamental analysis of individual stocks, guiding their evaluation and weighting. A theme-specific framework is then used to evaluate the companies associated with a theme individually and compare them against their competitors to identify the best-in-class investments. ESG analysis systematically informs the final investment decision. Ongoing risk analysis also keeps track of the latest developments in sustainability and ESG rating changes. Influencing sustainable business practices is a key aspect of regular dialogue with companies and also a guiding principle when it comes to exercising voting rights.
Bantleon supports the Principles for Responsible Investment
Convinced of the benefits of investing sustainably, we signed up to the Principles for Responsible Investment (PRI) initiative in 2013. Bantleon is thus committed to upholding the initiative’s six principles in its own investment processes. The PRI is an international network of investors in partnership with the United Nations Environment Programme Finance Initiative (UNEP FI) and the UN Global Compact. It works to understand the impact of sustainable investment and to support investors in incorporating it into their investment processes.