Sustainable investment approach
Within the Erste Asset Management Investment department, a team of experts focuses exclusively on the subject of sustainable investments. The investment process of Erste Asset Management is a so-called "integrative" approach, consisting of positive and exclusion criteria, enaggement and best-in-class method. The core of this process is the "ESG analysis", which refers to the Environment, Social and (corporate) Governance aspects.
Companies that we invest in have to meet a number of criteria. Nuclear power and arms production and trade constitute the most important exclusion criteria. Companies are also immediately divested from the fund in proven cases of corruption or child labour.
Companies that were admitted into the investment universe are managed according to a clearly structured approach and in cooperation with numerous internal and external specialists. An ethics advisory board, specifically set up for this purpose, appraises whether investments do in fact comply with sustainable criteria.

Sustainable footprint
In order to establish the sustainable footprint, we choose three criteria from the environmental, social, or governance field given that these can be easily measured across sectors and can thus be used for a weighted average of equity funds. We identify the CO2 emission and the independence of the Supervisory Board of the companies in the funds and calculate the value for the fund upon weighting the companies (the same applies to the entire investment universe of the fund). For human rights violations, we measure the number of companies with violations.
The rating of the fund is a weighted average of the companies in the fund. This means that every company in the fund has a sustainability rating that is based on our analysis and the analysis of our external research partners. This results in an aggregate rating across the holdings.

We can provide a more detailed overview about the sustainable footprint for the following funds:
ERSTE ETHIK AKTIEN GLOBAL | PDF (519 KB) |
ERSTE ETHIK ANLEIHEN | PDF (520 KB) |
ERSTE RESPONSIBLE BOND | PDF (521 KB) |
ERSTE RESPONSIBLE BOND EM CORPORATE | PDF (531 KB) |
ERSTE RESPONSIBLE BOND EURO CORPORATE | PDF (532 KB) |
ERSTE RESPONSIBLE BOND GLOBAL HIGH YIELD | PDF (531 KB) |
ERSTE RESPONSIBLE BOND GLOBAL IMPACT | PDF (521 KB) |
ERSTE RESPONSIBLE RESERVE | PDF (525 KB) |
ERSTE RESPONSIBLE STOCK AMERICA | PDF (531 KB) |
ERSTE RESPONSIBLE STOCK DIVIDEND | PDF (526 KB) |
ERSTE RESPONSIBLE STOCK EUROPE | PDF (537 KB) |
ERSTE RESPONSIBLE STOCK GLOBAL | PDF (527 KB) |
Impact measurement
Erste AM is one of the first asset managers to offer a global impact bond fund, i.e. ERSTE RESPONSIBLE BOND GLOBAL IMPACT. This fund guarantees that all invested bonds have a positive impact on the environment and/or society. To this end, the issuers have to report transparently on the use of their funds. This is subject to external auditing.
On this basis, Erste AM has calculated the impact of projects financed by the fund since 2017. This measure represents a special form of innovation, since impact models had previously been largely restricted to equity funds.
Impact achieved by the investments of ERSTE RESPONSIBLE BOND GLOBAL IMPACT:
CO2 risks in the Erste AM mutual funds
Erste Asset Management was the first investment company in Austria to sign the Montréal Carbon Pledge in 2015. This international investor initiative was created at the end of 2014 with the goal of contributing to a long-term reduction in greenhouse emissions by measuring and reporting the CO2 emissions of the companies held in equity funds. In the meantime, this initiative has grown to more than 120 investors managing more than USD 10,000bn worth of assets.
Since the first publication of the CO2 emissions associated with the mutual equity funds of Erste Asset Management in 2017, the CO2 risks have been cut continuously. This is on the one hand due company-wide integration of ESG information across the entire fund range. On the other hand, Erste Asset Management decided as early as 2016 not to invest in coal anymore as part of its coal policy.*
*Sources: Bloomberg, MSCI-ESG, Institutional Shareholder Services Germany AG, calculations by Erste Asset Management, water and sales data for FY 2021
Calculation of the CO2 risks in the mutual fixed income funds
For its holdings of end-of-2018, Erste Asset Management expanded the calculation of the CO2 risks across the entire range of mutual funds for the first time. This means that since then and beyond the specification of the Montréal Pledge, bond funds have been taken into account in the model.
The result is impressive both in relation to all mutual bond funds of Erste Asset Management (72% below the referential value) and to the sustainable bond funds alone (less than a quarter of the global fixed income average).
At the individual fund level, ERSTE ETHIK ANLEIHEN (3.2%), ERSTE RESPONSIBLE RESERVE (10.0%) and ERSTE RESPONSIBLE BOND (17.8%) performed particularly well.


As part of the Montréal Carbon Pledge, Erste Asset Management has reported the cumulative CO2 footprint of its mutual equity funds for five consecutive years. The result, which takes into account both sustainable funds and traditional funds, was yet again a convincing one in comparison with the global equity market: the CO2 intensity of the EAM equity funds in the sample was more than 8% below that of the global equity market.
Mutual equity funds, better than the global equity market
The most recent results for the mutual equity funds of Erste Asset Management, which have been published for five years and running, were again convincing. The CO2 intensity of the EAM equity funds is below that of the global equity market, and when taking into account only sustainable equity funds, 50% of global emissions.
The detailed analysis at individual fund level shows very good results for ERSTE RESPONSIBLE STOCK GLOBAL (37.6%), ERSTE ETHIK AKTIEN GLOBAL (45.8%) and ERSTE RESPONSIBLE STOCK AMERICA (45.9%).


What does CO2 intensity mean?
There are many different ways of calculating the CO2 footprint. EAM calculates the footprint of its funds on the basis of the weighted CO2 intensity of the companies held in the fund. To this end, at first our research partners establish the greenhouse emissions of the companies held by our funds. They may have been caused directly by the companies (scope 1 emissions) or indirectly by the way energy, heat or similar are used (scope 2 emissions). In order to facilitate comparison across companies of different sizes, the emission values are standardised on the basis of the respective company sales. On the level of individual companies, the CO2 intensity therefore indicates how many tonnes of CO2 were emitted per million currency units of sales. In a second step, the CO2 intensities of the individual companies are aggregated to a weighted average. On the level of funds, the weighted CO2 intensity shows how high the exposure to CO2-intensive companies is by comparison to other funds.
In establishing the footprint of EAM, we then calculated a weighted average across those mutual equity funds whose individual shares had sufficient CO2 data available.
What relevance do CO2 risks have for investors?
We have seen that the accelerating progress of climate warming entails more restrictive measures and regulatory frameworks in connection with greenhouse emissions. The taxation of such emissions will affect those companies in particular that have not sufficiently redesigned their production processes within their sector. Therefore, it would appear important to monitor their CO2 intensity also from an economic point of view.
Water footprint of ERSTE RESPONSIBLE equity funds
On the occasion of World Water Day on March 22, 2017, Erste Asset Management published the water footprint for its sustainable equity funds for the first time. This year, the water footprint of the sustainable bond funds will also be published for the first time. This is another important step in encouraging companies to publish water data. This year's publication saw data coverage of 72,9% of companies in the equity funds. Compared to previous years with data coverage of 46.8% (2017), 56% (2018), 53% (2019) and 64% (2020), coverage in 2021 has increased significantly. Coverage in the bond funds is 35,8%.*
*Sources: Bloomberg, MSCI-ESG, Institutional Shareholder Services Germany AG; calculations by Erste Asset Management; water and sales data for FYs 2015-2021.
Taking into account water risks in the investment decision
The selection of companies in the sustainable funds of Erste Asset Management that is geared towards the more responsible use of water is bearing fruit: our sustainable funds paint a more favourable picture than the global equity and bond market both from a holistic perspective and when focusing on the risk regions.
ANALYSIS WATER FOOTPRINT
global equity market vs. sustainable equity funds

Sources: Bloomberg, MSCI-ESG, Institutional Shareholder Services Germany AG; calculations by Erste Asset Management; water and sales data for FYs 2015-2021; index data as of December 2021
ANALYSIS WATER FOOTPRINT
global bond market vs. sustainable bond funds

Sources: Bloomberg, MSCI-ESG, Institutional Shareholder Services Germany AG; calculations by Erste Asset Management; water and sales data for FYs 2015-2021; index data as of December 2021
This is due to a comprehensive ESG analysis. In order to reduce water risks, the sustainability analysts of Erste AM take into account the management and regional distribution of water withdrawal in the valuation of the company. For the ESG rating, data on the degree to which a company is active in arid risk areas and depends on large volumes of water withdrawal there also enters the model, as does the question of what measures have been taken to improve the use of water towards a more sustainable process.
In establishing the average water intensity of the companies held by the funds, we use the water withdrawal as published by the respective companies as key ratio. Water intensity measures water consumption in cubic meters per thousand U.S. dollars of sales revenue.
Microfinance
There are investments that are aimed at making the world a better place. Microloans provide the chance of a better life and facilitate a stable yield for investors. The fund ERSTE RESPONSIBLE MICROFINANCE offers both: making the world a bit better through microloans while ensuring a nice return.
The goal of the fund is to finance entrepreneurs and micro enterprises in emerging markets. So far, microloans have provided some 50,000 people with a livelihood.
The focus on working capital credit creates high social yield.
- Creation of new sources of income
- Realisation of business ideas
- Job creation
- Long-term gain in prosperity
- Minimisation of consumer credit
A special focus is on women as entrepreneurs, as experience has shown that this tends to translate into a higher social benefit. The number of people reached and the composition of projects are continuously monitored by our fund management team so as to ensure compliance with this goal.
More topics
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 within the section mandatory publications 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. A summary of investor rights is available in German and English on the website www.erste-am.com/investor-rights as well as at the domicile of the management company.
The management company can decide to revoke the arrangements it has made for the distribution of unit certificates abroad, taking into account the regulatory requirements.
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. If the fund currency is a currency other than the investor's home currency, changes in the corresponding exchange rate may have a positive or negative impact on the value of his investment and the amount of the costs incurred in the fund - converted into his home currency.
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.