Building a sustainable future 

The Covid-19 pandemic has led to a further significant increase in the importance of megatrends such as sustainability and digitalisation. The world is undergoing a fundamental change. Sustainability is, with all its facets, a key driver here. How can we actively shape this change for the benefit of our clients?   

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One thing is certain: We must strengthen the connection between sustainability and economic considerations in the future. But meeting this challenge will be a complex, long-term project, not only for the real economy but for the financial sector as well. As the centre of expertise for asset management in the Genossenschaftliche FinanzGruppe cooperative network, we regard this necessary change as an opportunity to increase our clients’ capital while at the same time ensuring that resources are conserved for future generations. We are committed to achieving this balance and are addressing the issue of sustainability from many angles. 

Why is sustainable transformation important for us as an asset manager?

Dr Henrik Pontzen, Head of ESG in Portfolio Management 

Sustainable investing pursues two goals: returns and impact. But we will achieve neither if we invest exclusively in “green” businesses. This is because sustainability requires that “brown” businesses become greener. That's why we invest both in companies that already have excellent sustainability metrics and in businesses that are working to change in a credible way. As an active investor, it is important to find and support these businesses in good time, before the market has discovered their potential. 

What does sustainability mean for retail banking?

Anja Bauermeister, Head of Retail Funds 

Sustainability is becoming increasingly important for investors and advisors, and therefore for us as a product supplier as well. More than half of all net funds entrusted to us by private investors in 2020 went into sustainable products – a rising trend. We view sustainability as a strategic, long-term investment issue. It can contribute to achieving the primary goal of investing, namely to increase wealth. With this in mind, we are gradually expanding our product range in line with demand. 

 

Why is sustainability important for institutional investors?  

Nico Freyer, International Head of Major German and International Clients 

Sustainability has increasingly become a standard requirement of institutional clients, both at home and abroad. The question of what is sustainable and what is not varies from client to client in many cases. Differing requirements call for a very high level of expertise on our part in devising solutions. And we see ourselves as leaders in this area. Measurement and reporting are becoming increasingly important for many clients. Since we professionalised this topic at an early stage and are constantly developing it further, we are well positioned in the market.  

What does the implementation of sustainable transformation mean in concrete terms for the investment process?  

Vera Diehl, Portfolio Manager 

More detail, because in the future we will be taking a very close look at all the data on sustainable transformation using ESG targets and key performance indicators (KPIs). This will afford us an even more comprehensive view of businesses and greater awareness, even for what isn’t available in black and white, but rather has to be inferred.  

This could shrink the investment universe because we will no longer consider businesses that are not sustainable or are not taking steps to become sustainable for investment. However, the goal remains to achieve a positive correlation between sustainable transformation and returns. 

What is the importance of dialogue with companies?

Janne Werning, Head of ESG Capital Markets & Stewardship 

By engaging directly with a business’s management, we can sound it out and play an active role in shaping the company’s fortunes. In the best case scenario, this constructive dialogue enables us to advise and support a business on its path to transformation toward greater sustainability and a future-ready business model. To this end, we hold over 4,000 meetings with businesses every year. 

How do we achieve our goal of making our real estate portfolio carbon neutral by 2050?

Jan von Mallinckrodt, Head of Sustainability in Real Estate 

The Manage to Green strategy, which includes a broad package of measures, was introduced in 2018 for this purpose. ESG criteria are checked as early as the purchasing stage. We analyse and compare energy consumption and emissions in existing buildings. We use ImmoSustain to analyse the complex data. This is a software program developed specially for us which enables us to derive efficiency measures from the data. The common areas of all German properties and the first real estate properties elsewhere in Europe have been converted to green energy. We also install photovoltaic systems on the roofs of our real estate properties wherever possible. 

Why is the G in ESG an important part of the sustainable transformation? 

Vanda Rothacker, ESG-Analyst

Effective corporate governance lays the foundation for the sustainable management and monitoring of a business. The G in ESG refers to the legal and factual framework of responsible corporate governance. Our requirements include the integration of sustainability criteria in the remuneration of the Executive Board and compliance with competency and diversity criteria in appointing members of committees. Only in this way can a company minimise risks and undergo credible and sustainable transformation over the long term. 

 

Why does Union Investment need an in-house sustainability research system? 

Florian Sommer, Head of ESG Strategy in Portfolio Management 

Active selection and sound sustainability analysis are required to help shape the change to a sustainable financial system. With the Sustainable Investment Research Information System (SIRIS), Union Investment combines extensive ESG data streams with its own research. The IT platform is like a magnifying glass that our portfolio management team uses to examine how sustainable businesses and countries already are or whether they are on the path to sustainability. With SIRIS, we can accurately manage and measure sustainability in the investment process.  

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