Our investment process

An ongoing development process

The creation of sustainable structures is subject to an ongoing development process. Raiffeisen Capital Management also considers this fact for the issuers in which it invests. A black and white view of things is not particularly useful – with the exception of clearly defined exclusion criteria – if one wishes to promote sustainability. Raiffeisen Capital Management therefore applies an integrated sustainability approach that is based on the following three levels: 1) Avoid, 2) Support, and 3) Influence.

In general, sustainable structures cannot be created from one day to the next, but are the result of a development process.

A holistic concept

In the investment process, sustainability is achieved by thoroughly integrating the ESG dimensions. This means that in addition to economic factors, environmental and social aspects as well as (sound) corporate governance are integrated into the investment processes.

E for Environmental

The environmental criteria concern climate protection and climate change, water and marine resources, waste prevention and recycling, and biodiversity.

S for Social

The social aspect takes into consideration equality, employment conditions, and investments in people and communities.

G for Governance

Governance covers private as well as public institutions: management structures, remuneration policies, employee relations, etc.

Integration of sustainability

Avoid, support, and especially influence: The interaction of these three elements forms the basis for the responsible, active management of sustainable funds.

Avoid, support, influence

Here, the one aim is to avoid investments in certain business fields or practices and to thus accept responsibility. Furthermore, we see it as our task to promote and to support sustainability and follow a clear best-in-class approach to this end. Raiffeisen Capital Management also succeeds in exerting influence in terms of sustainability through our ongoing communication with companies and through shareholder engagement. The combination of all these levels is a dynamic process and contributes towards the sustainability quality of the involved products.

1. Negativ criteria: avoidance and show responsibility

Avoiding controversial business areas and practices is based on the ethical premise of avoiding participation in bad things and is a starting point on the path towards sustainable investment policies. The focus is on an initial ethical positioning, and on avoiding reputational risks. The main instrument is excluding controversial areas of business, and companies and countries (regional entities) which violate certain pre-defined criteria.

2. Best in class: support and empower sustainability

The next and rather significant level of development can be described as “collaborating for good” and focuses more on integrating ESG research into enterprise analysis and thus into the selection of securities. This approach is also applied accordingly for countries (regional entities) as issuers of debt securities. This thorough integration of ESG research into the investment process (ESG scores) leads to a higher ESG quality and improves the risk profile of the relevant portfolio.

3. Engagement: influence and have impact

The third step of an integrated sustainability concept is engagement: exercising influence on the behaviour of companies, organisations, and consumers. The focus is on corporate dialogue and, in particular, on exercising voting rights. These impacts can fall outside the immediate sphere of return or risk targets for a portfolio, but they should not violate these. The vision of the desired “double dividend” can only really be pursued in a credible manner through engagement.

Numerous certifications for good performance

Raiffeisen Capital Management (Raiffeisen KAG) is constantly working to improve sustainable investment processes, both internally and with the help of external partners. One visible result of these efforts is the rising number of national and international certifications.

Current awards

Reports und Policies

Engagementreport

Overview of all activities conducted by Raiffeisen KAG in implementation of its engagement policy

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Assessment of the sustainability of companies

How does one assess the sustainability of companies?

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