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Insight 17.04.2018

Value creation through responsible investment

Value creation through responsible investment

UBP continues on its way to enhanced ESG investment standards


Key Points

It is our strongly held conviction that businesses must continuously enhance their environmental, social and corporate governance (ESG) practices to be able to deal with the world’s current and future challenges.

  • We believe that responsible investing can help to achieve more sustainable returns and mitigate risks over the longer term.
  • As a signatory to the UN principles for responsible investment since 2012, UBP is committed to integrating ESG factors into its asset management activities. The number of UN PRI signatories now stands at almost double that of 2012 and represents over USD 60 trillion in AuM. Responsible investing can no longer be treated as a niche.
  • In order to tackle the world’s biggest challenges, governments, the corporate world and the financial sector must work together, hence our collaboration with the Cambridge Institute for Sustainability Leadership. In 2018, we became a member of their ‘Investment Leaders Group’, a select network of pension funds, insurers and asset managers committed to advancing the practise of responsible investment. This year we also joined Sustainable Finance Geneva, an association based in Geneva that brings together and mobilises individuals and organisations to promote innovation in sustainable finance.
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Innovation & Dedication to ESG Practices

  • Our strength is our flexibility and adaptability to market requirements. It is important to us that our business-driven decisions take into account sustainable and responsible investing considerations.
  • Besides the fact that we apply our  Responsible Investment Policy to all of our funds, we offer a selection of products integrating further ESG criteria into their processes and a range of innovative, dedicated sustainable funds.
  • Our latest product launch offers access to sustainable emerging market (EM) corporate bonds, an asset class often overlooked by ESG-conscious investors. In fact, the number of EM corporate issuers with responsible and sustainable business practices has been growing in recent years and now constitutes a sizeable and well diversified investment universe. To create this product we have combine our expertise in managing EM corporate debt strategies with negative and positive ESG screening, which allows us to construct a portfolio of ESG-mindful companies, compliant with the UN Global Compact and with limited or no exposure to weapons, tobacco and coal.
  • This niche product provides access to the enhanced return potential of sustainable EM corporate bonds offering attractive yields, low credit risk and diversification. We believe that such portfolios can offer superior, more sustainable risk-adjusted returns compared to traditional fixed income portfolios over time.

UBP’s Responsible Investment Approach

Across our asset base, we use a combination of  screening, engagement and proxy voting to provide a platform for achieving attractive, stable long-term returns for our clients. For all our open-ended funds we apply:

Screening

- Exclusion list:
A list of companies that deal in controversial weapons, or derive ≥ 5% of their revenues from nuclear weapons, or ≥ 20% of their revenues from thermal coal extraction, to be avoided.

- Inclusion list:
A recommendation list of “ESG Champions” or of companies that contribute to the achievement of the 17 UN Sustainable Development Goals.

- Watch list:
A list of companies involved in severe controversies. Our Portfolio Managers are encouraged to engage with those companies and/or reassess their investment thesis.

Engagement

Entering into dialogue with companies, either in conjunction with other investors or directly, with the support of leading engagement service provider GES.

Proxy voting

Voting in order to fulfil obligations as responsible shareholders, directly or with the support of Institutional Shareholder Services (ISS).

UBP Responsible Investment

Expertise

Responsible Investment

Responsible Investment is now at the forefront of many of our clients’ minds

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Sustainable EM corporate debt

A new asset class for responsible investors

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