Case Studies
Engagement is a cornerstone of our responsible investment approach. Through active dialogue, we address sustainability risks and opportunities and communicate investor expectations. We promote sustainable business practices and support companies in their sustainability transformation. We are convinced that constructive collaboration is a powerful tool for change and that companies that operate sustainably are more successful in the long term. With this approach, we strive not only to optimize financial returns but also to make a positive contribution to the sustainable development of our society and environment, in keeping with our mission: Investments for a Better World.
We have independently initiated engagements on pressing issues such as deforestation, water security, and workers’ rights, and we specifically engage with companies involved in sustainability controversies. Our independent approach allows us to maintain the flexibility and freedom to develop tailored strategies, advance our own sustainability priorities, and articulate our values throughout the engagement.
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Deforestation
Global deforestation, particularly the loss of tropical primary forests, is one of the most pressing environmental problems of our time. In 2024 alone, approximately 6.7 million hectares of such forests were lost worldwide—equivalent to about 18 soccer fields per minute. Despite international commitments to halt deforestation, the trend remains negative, with an increase of nearly 100 % compared to the previous year.
The consequences of this forest loss are far-reaching: massive losses of biodiversity, the acceleration of climate change through the release of stored greenhouse gases, soil loss and erosion, disruptions to the water cycle, an increase in zoonotic diseases, and human rights violations such as displacement caused by land grabbing. All of these impacts demonstrate that deforestation poses not only an ecological risk, but also a social and economic one.
This poses significant risks for investors: ranging from reputational and supply chain issues to regulatory sanctions. At the same time, engagement offers the opportunity to encourage companies to adopt more sustainable practices.
Based on a comprehensive position paper and portfolio reviews, we identified companies with an elevated risk of deforestation—for example, due to their use of critical raw materials such as beef, palm oil, or cocoa. We assessed their policies, processes, and goals related to deforestation.
To that end, we engaged in dialogue with five companies. The goal was to identify shortcomings, initiate concrete improvements, and promote transparency. The following case studies illustrate how differently companies respond to this initiative—and where progress has been made or limitations encountered.
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Water Safety
Water is an essential but increasingly scarce resource. Less than 1 % of the world’s water is available as freshwater—and this resource is increasingly threatened by climate change, environmental pollution, and overuse. According to UN projections, there is a risk of a 40 % global water shortage by 2030.
Water scarcity affects not only health, agriculture, and ecosystems, but also entire economic sectors. For companies, this means production risks, regulatory pressure, and reputational damage. Studies show that more than two-thirds of publicly traded companies view water-related risks as relevant to their business.
As responsible investors, we are committed to sustainable water management. Our goal is to reduce risks and encourage companies to use water more responsibly. Based on a comprehensive risk analysis, we have identified companies that either operate particularly water-intensive business models or are active in water-stressed regions.
The analysis focused on:
- Policies & Governance (e.g., Commitments, Supply Chain, Incentive Systems)
- Strategy & Processes (e.g., risk management, certifications)
- Goals & Metrics (e.g., quantifiable reduction targets, reporting)
In July 2024, we engaged in dialogue with five companies to initiate improvement measures. The following case studies illustrate how differently these companies responded to our efforts—ranging from clear progress to a lack of response.
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Living Wages
Worldwide, about one billion workers earn less than what is necessary for a decent standard of living—that is about one-third of all workers. In 82% of countries, the statutory minimum wage falls below a living wage. The gap between actual wages and a living wage particularly affects workers in global supply chains—especially in industries with low unionization rates and high cost pressures.
A living wage covers the costs of housing, food, clothing, health care, education, transportation, and a small emergency fund—without requiring excessive working hours or incurring debt. It varies by region and must be calculated locally. For companies, the lack of living wages poses not only a human rights risk but also concrete economic disadvantages: lower productivity, higher employee turnover, and reputational damage. A study by the Living Wage Foundation shows that 93% of companies that pay living wages benefit from doing so. Closing the global wage gap could also generate an additional $4.56 trillion in economic output each year.
As responsible investors, we are committed to ensuring that living wages are paid throughout global value chains. Based on a comprehensive analysis, we identify companies with elevated risk—fewer than 4% of the 2,000 most influential companies currently pay a living wage.
Through our commitment to living wages, we are pursuing three main goals:
- Commitment & Timeline (e.g., a binding commitment to pay a living wage to all employees, with a specific timeline for closing the wage gap)
- Methodology & Calculation (e.g., transparent determination of a living wage for all regions in which the company operates, based on recognized benchmarks such as those of the Global Living Wage Coalition)
- Supply Chain & Business Relationships (e.g., commitment to paying living wages among suppliers and in business relationships, fair purchase prices, and long-term supplier relationships)
Fair wages are not only an ethical obligation; they also increase the resilience of supply chains, improve job satisfaction, and create growing markets—a clear competitive advantage for forward-thinking companies.
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Migrant labor
Around 168 million people worldwide leave their homes to work in another country. They are the unsung architects of our prosperity—and yet they are often left without a voice, without rights, and without recognition. Driven by poverty and lured by higher wages, many end up in situations marked by long working hours, a lack of social security, and debt resulting from recruitment and travel costs.
The vast majority—68 percent—of migrant workers are employed in the service sector, where the proportion of women is above average—largely due to the high demand for caregiving and domestic work, as well as the aging population in many destination countries. Other affected sectors include agriculture, healthcare, and construction. The kafala system is particularly problematic in countries such as Saudi Arabia, where passport confiscation, withheld wages, and a lack of job security create dependencies that amount to modern-day slavery.
As responsible investors, we demand that companies adopt a zero-tolerance policy toward forced and child labor, ensure transparency in their supply chains, and incorporate international standards such as the ILO’s core labor standards. Based on our analysis, we identify companies with elevated risk and actively seek dialogue with them.
Our efforts focus on:
- Transparency & Supply Chains (e.g., disclosure of working conditions, compliance with due diligence obligations)
- Standards & Governance (e.g., ILO Core Labor Standards, zero tolerance for forced labor, incentive systems)
- Consequences & Escalation (e.g., exclusion and divestment in the event of serious violations; reinvestment only after demonstrable rectification)
Together with networks such as “Shareholders for Change,” we are working to ensure that safeguards for migrant workers are put in place—because fair working conditions are not only an ethical obligation, but also create economic stability
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Circular Economy
The global waste problem has reached alarming proportions: Approximately 225 million metric tons of plastic waste are generated each year, about one-third of which ends up in the environment uncontrolled. In the EU, an average of 186.5 kilograms of packaging waste per person was generated in 2022. An estimated 1.15 to 2.41 million metric tons of plastic end up in the oceans each year—with devastating consequences for ecosystems and human health.
To overcome this crisis, a shift is needed from a linear economy—extracting, using, and disposing of raw materials—to a circular economy. Recycling is the key element here: It reduces the need for new raw materials, significantly lowers energy consumption—by up to 96 percent for aluminum—and closes material loops. This requires that products be designed to be recyclable from the outset. For companies, this leads to reduced dependence on raw materials and new business models. Starting in February 2025, the EU Packaging Regulation (PPWR) will set strict requirements in this area.
As responsible investors, we prioritize waste prevention and reduction. Based on a comprehensive analysis, we identify companies with business models that rely heavily on packaging or that face regulatory risks.
Our efforts focus on:
- Recyclable product design (e.g., single-material products, avoiding composite materials)
- Recycling Rates & Use of Recycled Materials (e.g., mandatory use of secondary raw materials, closing material loops)
- Transparency & Regulation (e.g., compliance with the PPWR, disclosure of packaging volumes and recycling routes)
Companies that invest early in recycling-based circular economy solutions secure long-term competitive advantages—while those that lag behind must expect rising compliance costs and reputational risks.