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

covers themes such as climate change and energy efficiency, the promotion of renewable energies and biodiversity, and the reduction of environmental pollution.

Social

relates to working conditions such as the prohibition of child and forced labour, workplace safety and health, and 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.

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Exclusion criteria are defined as a first step in a two-part selection process and then applied in the creation of a responsible investment universe. With this as a basis, classic financial analysis instruments are used to create a responsible portfolio that combines both responsible and classic factors of financial analysis (ESG integration).

Exclusion criteria

The application of various ESG exclusion criteria enables us to proactively mitigaterisks that may arise from controversial business activities. We thus 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. We distinguish between standards-based exclusions (exclusion of companies that violate internationally recognised norms and standards), value-based exclusions (exclusion of companies whose business activities are deemed inadmissible for an investor) and country-based exclusions (countries that systematically breach international standards).

Exclusion criteria in the investment area (PDF/180KB)

ESG rating

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

MSCI ESG Rating (PDF/190KB)

Publications

SSF Market Study 2023 (PDF/4.7MB) ESG philosophy in the investment business (PDF/236KB) ESG reporting in fund factsheets (PDF/179KB) Implied temperature rise (PDF/195KB) ESG glossary (PDF/3.6MB) Factsheet ESG risks (PDF/103KB)

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.