Erste AM guidelines
The Principles of Responsible Investing (PRI) as laid down by the United Nations are the basis of our sustainable investment approach. As signatory of the PRI, Erste Asset Management is committed to the following principles in its investment policy:
- We will take into account environmental, social, and governance topics (ESG) in our investment analysis and decision-making processes.
- We will be an active owner and integrate ESG topics into our ownership policy and practice.
- We will require appropriate reporting of ESG topics from the companies we invest in.
- We will promote the acceptance and implementation of the PRI in the investment industry.
- We will co-operate with partners so as to increase the effectiveness of the implementation of the PRI.
- We will report on our activities and progress in the implementation of the PRI.
We also require our external partners to have either signed the PRI or to follow them
to the greatest extent possible.
Guidelines on minimum ethical standards
These are minimum ethical standards for all mutual funds (bonds, equities) of Erste Asset Management:
Exclusion of controversial weapons
- Since 2012 Erste Asset Management has committed to refraining from investments in companies that are involved in the production or trade of controversial weapons. Among them are:
- Biological and chemical weapons
- Submunition, including possible launch and ejection systems
- Anti-personnel mines, mine-planting systems, and other mine systems
- Nuclear weapons
- Depleted uranium weapons
No speculation on food
In line with the social responsibility of the entire Erste Group, Erste Asset Management committed in 2013 to refraining across all the investment funds and client portfolios it manages from investments that bet on an increase in food prices. In particular, for our multi-asset mandates – both umbrella funds and asset management solutions - we will not invest in third-party funds or derivatives that speculate on food prices.
No investment in coal
In 2016, Erste Asset Management was one of the first investment fund companies in Austria and Europe to commit to the exclusion of investments in coal across all mutual funds on the basis of individual securities (equities and bonds). All companies that generate more than 30% of sales from coalmining are excluded. Any and all investments in the portfolios were sold by 1 November 2016.
Exclusion Criteria for the Responsible Funds
Minimum Requirements (affects all mutual funds of Erste AM) |
ERSTE RESPONSIBLE RESERVE
ERSTE RESPONSIBLE BOND
ERSTE RESPONSIBLE BOND EURO CORPORATE
ERSTE RESPONSIBLE BOND GLOBAL IMPACT
ERSTE RESPONSIBLE STOCK AMERICA
ERSTE RESPONSIBLE STOCK EUROPE
ERSTE RESPONSIBLE STOCK GLOBAL
ERSTE RESPONSIBLE STOCK DIVIDEND |
ERSTE RESPONSIBLE BOND EM CORPORATE | ERSTE WWF STOCK ENVIRONMENT | ||
ABORTION |
Producers of abortion drugs as well as operation of abortion clinics | max. 5% of revenues | zero tolerance | ||
| ANIMAL TESTING | Unless required by law | zero tolerance | zero tolerance | ||
| ARMS/WEAPONS | Producers and traders of weapons, weapon systems, controversial weapons, i.e., nuclear, biological, and chemical weapons, cluster munitions, anti-personnel mines, uranium ammunition |
exclusion controversial weapons |
zero tolerance | zero tolerance | zero tolerance |
| Top 100 arms-producing & military services companies in the world (SIPRI) | zero tolerance | max. 5% of revenues | |||
| BANKS AND FINANCIAL SERVICES | Systematic violations of accepted business practices | zero tolerance | zero tolerance | ||
| BUSINESS MALPRACTICE | Accounting fraud and corruption: non-compliance with legal requirements | zero tolerance | zero tolerance | zero tolerance | |
| CHILD LABOUR | Child labour in massive violation of the fundamental principles of the ILO Declaration |
zero tolerance | no relevance |
zero tolerance | |
| COAL MINING | Coal mining and liquefaction to fuels | max. 5% of revenues | max. 5% of revenues | zero tolerance | |
| Producers of coal power | max. 5% of revenues | zero tolerance | |||
EMBRYONIC RESEARCH |
Specialized companies | zero tolerance | zero tolerance | zero tolerance | |
| FRAUD AND CORRUPTION | Disregard of legal regulations | zero tolerance | zero tolerance | zero tolerance | |
| GAMBLING | Operators and specialized manufacturers | max. 5% of revenues |
max. 5% of revenues |
zero tolerance | |
| GMO | Producers of manipulated seeds | zero tolerance | zero tolerance | zero tolerance | |
| Use of manipulated seed | zero tolerance | zero tolerance | |||
| NUCLEAR POWER | Producers of nuclear power, key components for nuclear power stations as well as producers and traders of uranium |
zero tolerance | zero tolerance | zero tolerance | |
Traders of key components for nuclear power stations |
max. 5% of revenues |
zero tolerance | zero tolerance | ||
PREGNANCY TERMINATION |
Commercial abortion clinics and pharmaceuticals | max. 5% of revenues | zero tolerance | no relevance | |
| PORNOGRAPHY | Producers of pornography | zero tolerance | zero tolerance | zero tolerance | |
| Trader of pornography | max. 10% of revenues | max. 10% of revenues | zero tolerance | ||
TOBACCO |
Producers of end products | zero tolerance | max. 5% of revenues | zero tolerance | |
| Producers and Processors - Production of crude oil and natural gas by conventional and non-conventional methods (fracking, oil sands) | max. 5% of revenues | zero tolerance | |||
| Refining of crude oil | max. 5% of revenues | zero tolerance | |||
| High share of non-conventional reserves in total reserves | max. 20% of total reserves | zero tolerance | |||
| Power generation from crude oil | max. 5% of revenues | zero tolerance | |||
UN GLOBAL COMPACT |
Companies that fail to comply with the United Nations Global Compact principles | zero tolerance | zero tolerance | ||
Violation of HUMAN RIGHTS |
Disregard of generally accepted norms, principles and standards for the protection of human rights, e.g., the International Bill of Human Rights, UN Guiding Principles on Business and Human Rights | zero tolerance | zero tolerance | zero tolerance | |
Violation of LABOUR RIGHTS |
Disregard of generally accepted norms, principles and standards for the protection of workers, e.g., the core principles of the ILO, i.e., freedom of association and the right to collective bargaining, forced labour, discrimination, and other aspects for companies and suppliers/sub-contractors | zero tolerance | zero tolerance | zero tolerance |
C O U N T R I E S |
AUTHORITARIAN REGIME | Classification by „Freedom House“ not free | zero tolerance | no relevance |
no relevance |
| CHILD LABOUR | Countries with widespread use of child labor |
zero tolerance | no relevance | no relevance | |
| CLIMATE PROTECTION | Non-ratification of the Kyoto Protocol | zero tolerance | no relevance | no relevance | |
| Non-ratification of the paris convention | zero tolerance | no relevance | no relevance | ||
| CORRUPTION | countries scoring lower than 50 points in Transparency International’s Corruption Perception Index (CPI) | ||||
DEATH PENALTY |
Death penalty not completely abolished |
zero tolerance | no relevance | no relevance | |
| FREEDOM OF ASSOCIATION | countries with severe restrictions regarding the possibility of free assembly and of trade union organisation | no relevance | no relevance | ||
| HUMAN RIGHTS | Countries with massive restrictions | zero tolerance | no relevance | no relevance | |
| LABOUR RIGHTS | Countries with particularly low standards | zero tolerance | no relevance | no relevance | |
NUCLEAR WEAPONS |
countries that possess nuclear weapons according to the Stockholm International Peace Research Institute (SIPRI) or countries that have not signed the Treaty on the Non-Proliferation of Nuclear Weapons | zero tolerance | |||
| NUCLEAR ENERGY | Share of primary energy production (3-year average) |
from 40 % * | no relevance |
no relevance |
|
| MILITARY EXPENSES | Military expenditure/BIP | from 3% * |
no relevance |
no relevance |
D I V |
Since 2013, Erste Asset Management has committed itself to refrain from investing in food in all the investment funds it manages and from investing in derivatives. |
Please note the warnings at the bottom of the page.
Active Ownership
By active ownership we mean our responsibility to not only take into account sustainability issues when selecting the securities for our portfolios as investors, but also to actively push for measures towards social responsibility, environmental protection, or stronger transparency from companies that we invest in.
In doing so, we distinguish between engagement, i.e. the formal or informal dialogue with the company, and voting, i.e. the exercise of voting rights at Annual General Meetings (AGMs). Both activities pursue the goal of strengthening the voice that our clients have given us by investing in our sustainable funds and submitting it to the companies.
Engagement
As engaged investor, we want to achieve an active dialogue with the invested companies and states within the framework of our sustainability process. This way, we can point out weaknesses in environmental, social, or governance areas and subsequently try to jointly find a solution for improvement. Our engagement is not only a question of responsibility but also contributes to the minimisation of risk and can thus improve the long-term investment success of our clients. We engage with companies in which the funds of the ERSTE RESPONSIBLE line invest. In individual cases we may also contact companies that we are not invested in; after all, we also want to achieve change at companies that are not investable to us due to their shortcomings in the area of sustainability. We may exclude companies from our investment universe that refuse to engage in dialogue. In our engagement process, we use four strategies:
| Austria engagement | Advancement of the integration of ESG criteria in management decisions of Austrian companies via investor meetings / one-on-one talks. |
| Theme engagement | Bundling of ESG interests with other investors so as to have a bigger potential impact on (and elicit interest from) especially international groups. In doing so, we rely on international sustainability networks such as PRI, CRIC, and the engagement service of Sustainalytics. |
| Collaborative engagement | ESG research on topics of particular social relevance. The findings are provided to the fund management team and may result in divestment. We may also increase investor pressure by preparing a focused ESG letter and/or press releases. |
| ESG dialogue | Advancement of the integration of ESG criteria in management decisions of international companies through talks with top management. |
Voting
Voting is the second central pillar of the active ownership approach of Erste AM. We have exercised the voting rights associated with the shares in our ERSTE RESPONSIBLE funds at Annual General Meetings since 2012. This way, we actively project the voice of our clients as indirect owners of the invested companies.
In order to ensure the transparency and consistency of our voting, we have compiled a detailed guideline and regularly and publicly report on our voting behaviour on our voting portal. This guideline does not only apply to our sustainable equity funds, but also to our traditionally managed equity funds.
„Due to the present Covid-19-crisis it might happen in exceptional cases, that voting rights are not executed”
Sustainability handbook
Sustainability means being aware of one's actions and their consequences and designing them in such a way that they do not harm anyone if possible. In other words, actions and deeds of the present generation should not restrict the ability of future generations to act. Sustainable action means behaving like a farmer who cares for a tree in the best possible way and harvests its fruit without cutting it down. In this way, one can expect a sustainable high harvest without endangering the livelihood of tomorrow.
Publications of Erste AM
Sustainable footprint
| ERSTE ETHIK AKTIEN GLOBAL | PDF (151 KB) |
| ERSTE RESPONSIBLE STOCK AMERICA | PDF (149 KB) |
| ERSTE RESPONSIBLE STOCK DIVIDEND | PDF (149 KB) |
| ERSTE RESPONSIBLE STOCK EUROPE | PDF (151 KB) |
| ERSTE RESPONSIBLE STOCK GLOBAL | PDF (150 KB) |
Sustainability profiles
| ERSTE ETHIK AKTIEN GLOBAL | PDF (991 KB) |
| ERSTE RESPONSIBLE BOND EMERGING CORPORATE | PDF (948 KB) |
| ERSTE RESPONSIBLE BOND GLOBAL IMPACT | PDF (1 MB) |
| ERSTE RESPONSIBLE BOND | PDF (977 KB) |
| ERSTE RESPONSIBLE BOND EURO CORPORATE | PDF (990 KB) |
| ERSTE RESPONSIBLE RESERVE | PDF (966 KB) |
| ERSTE RESPONSIBLE STOCK AMERICA | PDF (943 KB) |
| ERSTE RESPONSIBLE STOCK DIVIDEND | PDF (939 KB) |
| ERSTE RESPONSIBLE STOCK EUROPE | PDF (976 KB) |
| ERSTE RESPONSIBLE STOCK GLOBAL | PDF (910 KB) |
| ERSTE WWF STOCK ENVIRONMENT | PDF (1 MB) |
Other documents
Erste Ethics Advisory Board
The Erste Ethik Advisory Board supports Erste Asset Management in all matters related to the ESG approach and investment process. It currently comprises five experts from the fields of management accounting, taxes, political science, ethical and sustainable investment and moral theology.
More topics
Disclaimer and legal notes
Disclaimer
This document is an advertisement. All data is sourced from Erste Asset Management GmbH, unless indicated otherwise. Our languages of communication are German and English.
The prospectus for UCITS (including any amendments) is published in Amtsblatt zur Wiener Zeitung in accordance with the provisions of the InvFG 2011 in the currently amended version. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH, pursuant to the provisions of the AIFMG in connection with the InvFG 2011.
The fund prospectus, Information for Investors pursuant to § 21 AIFMG, and the key investor document/KID can be viewed in their latest versions at the web site www.erste-am.com or obtained in their latest versions free of charge from the domicile of the management company and the domicile of the custodian bank. The exact date of the most recent publication of the fund prospectus, the languages in which the key investor document is available, and any additional locations where the documents can be obtained can be viewed on the web site www.erste-am.com.
This document serves as additional information for our investors and is based on the knowledge of the staff responsible for preparing it at the time of preparation. Our analyses and conclusions are general in nature and do not take into account the individual needs of our investors in terms of earnings, taxation, and risk appetite. Past performance is not a reliable indicator of the future performance of a fund. Please note that investments in securities entail risks in addition to the opportunities presented here. The value of shares and their earnings can rise and fall. Changes in exchange rates can also have a positive or negative effect on the value of an investment. For this reason, you may receive less than your originally invested amount when you redeem your shares. Persons who are interested in purchasing shares in investment funds are advised to read the current fund prospectus(es) and the Information for Investors pursuant to § 21 AIFMG, especially the risk notices they contain, before making an investment decision.
Please consult the corresponding information in the fund prospectus and the Information for Investors pursuant to § 21 AIFMG for restrictions on the sale of fund shares to American citizens. Misprints and errors excepted.
