Responsible investments

As the leading bank in the Zug economic region, we are aware of our responsibilities. We are future-oriented in the way we think and act. We integrate ecological and social aspects into our ambitious business goals. This helps us create lasting added value – for our stakeholders and for the environment.

Strong arguments in favour of responsible investments

Whereas with traditional investments only the metrics of classic financial analysis are applied, responsible investments offer the added possibility of steering portfolios in a constructive direction. By incorporating ESG criteria into investment decisions, you can reduce the ESG risks in your portfolio and make use of the ESG opportunities.

Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.

Brundtland Report, 1987

Some years back, investors still had considerable reservations with regard to the performance of responsible investments. The situation is very different now. According to Swiss Sustainable Finance, 40% of investors are motivated primarily by the possibility of a better risk/return profile with responsible investments, while 60% are motivated by further-reaching goals. There is thus a growing awareness of the potential impact ESG aspects can have on investing. Companies that incorporate ESG factors can demonstrate a better corporate quality over the long term and react better to ESG risks and opportunities. A negative stance towards ESG aspects can impair the value of a company, creating risks for investors at the same time. Responsible investors attempt to avoid these risks by exiting their investments in companies with poor practices and instead seeking out alternatives with exemplary ESG profiles.

How we understand ESG

“ESG”, which stands for Environment, Social and Governance, has become an established term in investing in particular. ESG investing means that decisions to invest or not factor in the opportunities and risks in these three areas.

Environment

relates to environmental topics such as climate change, energy efficiency, the promotion of renewable energies and biodiversity, as well as the reduction of pollution.

Social

relates to how a company manages working conditions, such as prohibitions on child and forced labour, workplace security and health, as well as the promotion of education and gender equality.

Governance

covers measures aimed at preventing corruption and bribery, fair remuneration for corporate bodies, diversity in management and the independence of audit and control bodies.

Our investment approach

Our business policy is reflected in responsible investing. We advise our clients holistically and transparently.

ZugerKB Asset management ZugerKB Investment advisory services

Our responsible investment universe is the result of a two-step selection process. In the first step, we filter using predefined exclusion criteria and, in the second, use a positive screening approach. With this as a basis, we use classic financial analysis instruments to create a responsible portfolio underpinned by a mix of both responsible and classic factors of financial analysis.

Exclusion criteria

The use of various ESG exclusion criteria provides us with a targeted way of reducing the risks that could arise as a result of controversial business practices. Given a positive screening – based on the ESG rating – we additionally focus on companies with greater resilience to long-term ESG risks of relevance to the sector.

Taking our convictions as a basis, we have developed a set of exclusion criteria that are authoritative for Zuger Kantonalbank. These criteria are broken down into various categories that are important to investors and, accordingly, well accepted. The criteria are supplemented by a filter that eliminates ESG laggards from the universe.

Exclusion criteria for direct investments (PDF/89KB) Exclusion criteria for investment funds (PDF/89KB)

ESG rating

The MSCI ESG rating measures how resilient a specific security or investment fund is to relevant long-term ESG risks and in respect of ESG opportunities. There are seven different ratings:

MSCI ESG ratings (PDF/76KB)

AAA

AA

Leader

A company leading its industry in managing the most significant ESG risks and opportunities.

A

BBB

BB

Average

A company with a mixed or unexceptional track record of managing the most significant ESG risks and opportunities relative to industry peers.

B

CCC

Laggard

A company lagging its industry based on its high exposure and failure to manage significant ESG risks.

Publications

SSF Market Study 2022 (PDF/2.9MB) ESG philosophy in the investment business (PDF/90KB) ESG glossary (PDF/3.6MB)

Partnerships

In unity there is strength. As the leading bank in the Zug economic region, we are aware of our responsibilities. We are therefore a signatory to/member of the following organisations that are chiefly active in the area of sustainability (among other things):

PRI is the world’s leading initiative for responsible investments. It is committed to promoting an understanding of the impact of ESG factors on investments and to supporting its international network of signatories with the incorporation of these factors in investment and ownership decisions.

Swiss Sustainable Finance is an association for the promotion of sustainability in the Swiss financial centre. The Swiss financial centre is a leading player in the area of sustainable finance and advocates the transition to a sustainable and prosperous economy.

The Asset Management Association Switzerland is an organisation that represents the Swiss asset management industry. One of its strategic priorities is strengthening Switzerland as a centre of sustainable asset management and actively promoting it.

The Swiss Climate Foundation is a voluntary initiative by business for business. Thanks to its partner companies, it is able to make annual contributions of between one and three million Swiss francs. Its aim is to benefit both climate protection and Switzerland as a location for business.

In addition to the approximately 700 associations and charitable institutions that we support in our region, we join with other partners in protecting the environment and promoting innovative technologies.

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