Sustainability is much more than just a »trend«

Bantleon was founded in 1991 with the commitment to capital preservation. Since then, our focus has always been on the social benefits of an investment and thus its durability in the economic evolution process.
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Management of sustainability risks

What are sustainability risks?

Sustainability risks are environmental, social or governance (ESG) events or conditions that, if they occur, could cause an actual or a potential material negative impact on the value of an investment. It can be a standalone risk or affect other risks and thus contribute to their materiality, e.g. credit/counterparty, market price, liquidity, operational, strategic or reputation risks.

Sustainability risks concerning ESG factors can arise, for example, in the following areas:

Environmental
Social
Governance

Environmental

 
  • Climate protection
  • Adaptation to climate change
  • Preservation of biodiversity
  • Sustainable use and protection of water and marine resources
  • Transition to a circular economy, avoidance of waste, recycling
  • Prevention and reduction of pollution
  • Protection of ecosystems
  • Sustainable use of land

Social

 
  • Compliance with recognised standards under employment law (no child or forced labour, no discrimination)
  • Health and safety in the workplace
  • Fair pay and working conditions, diversity, training and career development opportunities
  • Freedom to join a union and freedom of assembly
  • Sufficient product safety, including health protection
  • Equal treatment of companies in the supply chain
  • Inclusive projects that take account of communities’ and minorities’ concerns

Governance

 
  • Tax honesty
  • Measures to prevent corruption
  • Sustainability management at executive level
  • Sustainability-dependent executive management compensation
  • Empowerment of whistleblowers
  • Protection of employees’ rights
  • Data protection
  • Transparency

Sustainability risks relating to climate and environmental factors are divided into the categories of physical and transition risks.

Physical risks
Transition risks

Physical risks

Isolated extreme weather events

  • Heatwaves and droughts
  • Flooding
  • Storms
  • Hail
  • Forest fires
  • Avalanches

Long-term climate change

  • Changing frequency and volume of rainfall
  • Unpredictable weather
  • Rising sea levels
  • Declining snow volumes
  • Changing tides and air streams
  • Ocean acidification
  • Rising average temperatures with regional extremes

Transition risks

 
  • Bans and restrictions
  • Withdrawal from fossil fuel consumption
  • Other political measures relating to the transition to a low-carbon economy
  • Technological shifts relating to the transition to a low-carbon economy
  • Changing consumer preferences and behaviour
Consideration of adverse sustainability impacts
(Principal Adverse Impact PAI)

In view of its size, the nature and scope of its activities and the types of financial products it provides, manages or advises on, Bantleon Invest GmbH has established extensive processes for dealing with sustainability risks and for analysing and assessing principle adverse impacts of its investment decisions on sustainability factors. Please refer to the detailed process descriptions in the documents listed below. The underlying ESG criteria are regularly reviewed both before an investment decision is made as well as on an ongoing basis for existing investments in client portfolios.

The precautions and processes not only minimise risks, but also open up additional opportunities. After all, companies that operate sustainably not only have more stable business models, but also benefit from an increasing demand in the global development towards a resource-efficient economic order.

More information:
The standard ESG process at Bantleon
Sustainability in equity management
Sustainability in bond management