Our sustainability approach

WIW concept

As a leading sustainable asset manager, we are convinced that sustainable investing not only makes ethical sense, but also financial sense:

With this in mind, we have used our many years of experience to develop the WIW concept, which combines three dimensions: values, integration and impact (Werte, Integration, Wirkung). Our values form the foundation of our actions and guide us in identifying sustainable investments. By integrating sustainability opportunities and risks into the financial analysis, we can make a more holistic assessment of potential investments. We also aim to achieve a positive environmental and social impact with our stewardship approach, consisting of company dialogs and the exercise of voting rights.

• Values

  Our values, which are expressed through the EB Group’s sustainability filter, form the foundation of our investment process. This filter combines the ethically-sustainable criteria of the guidelines for ethically-sustainable investments of the Evangelical Church in Germany (EKD guidelines for short) with our own focal points, such as the impact of companies on the Sustainable Development Goals (SDG). This systematically supplements traditional exclusion criteria, which include controversial business practices (e.g. production of controversial weapons) and activities (e.g. serious violations of the UN Global Compact). By using the filter in our mutual funds, we not only ensure that the investments correspond to our values, but also minimize sustainability-related financial risks.

  • • Test criterion of the EB filter (Responsible)
    • Exclusions for …
  • • Conventional weapons (production)
    • 5 %
  • • Outlawed weapons (production)
    • 0 %
  • • Nuclear weapons (production)
    • 0 %
  • • Spirits (from 20 percent by volume)
    • 5 %
  • • Tobacco products
    • 5 %
  • • Gambling (controversial forms)
    • 5 %
  • • Pornography (production / distribution)
    • 0 % / 5 %
  • • Genetically modified seeds
    • 5 %
  • • Embryonic stem cell research
    • 0 %
  • • Coal (extraction / power generation)
    • 5 % / 5 %
  • • Share of global coal production
    • 1 % subsidy share
  • • Conventional oil and gas production (unless there is a decarbonization pathway aimed at limiting the global temperature increase to well below 2°C)
    • 5 %
  • • Electricity generation from oil and gas (unless there is a decarbonization pathway aimed at limiting the global temperature rise to well below 2°C)
    • 5 %
  • • Unconventional gas and oil production (oil sands, oil shale, shale gas and Arctic oil and gas production)
    • 5 %
  • • Nuclear energy
    • 5 %
  • • ILO core labor standards
    • Very serious violations
  • • UN Global Compact
    • Very serious violations
  • • OECD Guidelines for Multinational Enterprises
    • Very serious violations
  • • UN Guiding Principles on Business and Human Rights
    • Very serious violations
  • • ESG Rating
    • CCC
  • • Combination criterion ESG Rating & SDG Scores 1-17
    • ESG rating below BBB and negative impact (“misaligned”) on at least one of the 17 SDGs

  • • Test criterion of the EB filter (Responsible)*
    • Exclusions for …
  • • ESG Score
    • CCC
  • • Peace status
    • Very low
  • • Death penalty
    • Application of the death penalty
  • • Freedom status (according to Freedom House)
    • Not free
  • • Civil liberties and political rights (according to Freedom House)
    • Score over 5
  • • Stability of the state (according to Worldwide Governance Indicators)
    • Score below 0
  • • Corruption (according to the Corruption Perception Index)
    • Score below 40
  • • Money laundering (according to the AML Index of the Basel Institute)
    • Yes
  • • Child labor
    • More than 1% of all children in a country
  • • Convention on Biological Diversity (CBD)
    • No contracting party
  • • Paris Agreement (incl. associated obligations)
    • Non-ratification or insufficient compliance
  • • Financing of weapons of mass destruction (according to Financial Action Taskforce)
    • “High risk” and “Increased monitoring”
  • • Terrorist financing (in accordance with the Financial Action Taskforce)
    • “High risk” and “Increased monitoring”
  • • Tax evasion/avoidance (according to EU list of non-cooperative jurisdictions for tax purposes)
    • Yes

• Integration

  Sustainability indicators reveal long-term risks and opportunities that can have a financial impact. For example, more sustainable companies are often less affected by regulatory changes, are less frequently involved in environmental disasters, have a higher public profile and are more innovative. This is backed up by our scientific studies, which is why we consistently integrate sustainability criteria into our financial company analysis.

  In order to analyze sustainability risks and opportunities in the best possible way, we have developed our own EB ESG score developed. This proprietary score combines the comprehensive, fundamental sustainability assessment of traditional ESG ratings with a news-based sustainability indicator. The fundamental and news-based sustainability factors complement each other ideally, which is why the EB ESG Score enables an even more precise company evaluation.

  Scientific studies on the effect of sustainability on the financial risk of companies:
  The effect of environmental sustainability on credit risk | Journal of Asset Management (springer.com)
  Corporate Carbon-Risk and Credit-Risk: The Impact of Carbon-Risk Exposure and Management on Credit Spreads in Different Regulatory Environments – ScienceDirect
  ESG criteria and the credit risk of corporate bond portfolios | Journal of Asset Management (springer.com)

• Effect

  Every investment has an impact. That is why it is our goal to active contribution to the transformation towards a more sustainable economy. This is why we have supported a research collaboration with the universities of Kassel and Hamburg on the topic of impact investing and try to positively influence the sustainability of companies through our stewardship strategy, which is characterized by a targeted dialogue with companies and the use of voting rights at annual general meetings.

  We understand that every company and every situation is unique. That is why we rely on different forms and methods of corporate dialog, each of which has its own strengths. Our aim is to promote positive change and create long-term value.

  Thematic engagement
  We engage in proactive dialog on pressing issues such as deforestation, water security and workers’ rights. Using the SDGs as a frame of reference, we sensitize companies to key sustainability issues and promote sustainable business practices.

  Controversy-based engagement
  We specifically address companies that are involved in sustainability controversies. In this way, we want to encourage them to take concrete measures to mitigate the consequences of the controversy and reduce the likelihood of new controversies. Our focus here is on compliance with international standards such as the UN Global Compact and the OECD guidelines.

  Collaborative engagement
  Together with other investors, we pool our resources to drive sustainable change. We maximize our influence through investor groups and initiatives. In these engagements, we work together with the Arbeitskreis Kirchlicher Investoren (AKI), Institutional Shareholder Services (ISS ESG), CDP and Shareholders for Change.

  Self-initiated engagement
  With our independent approach, we retain the flexibility and freedom to develop customized strategies, promote our own sustainability issues and express our values during the engagement.

  Exercising voting rights
  The exercise of voting rights is a key tool for exerting direct influence on corporate decisions and promoting sustainable business practices. It makes it possible to actively shape corporate strategies and ensure that ESG objectives are taken into account in decision-making processes.