Why sustainable investments?
Sustainability is an increasingly prominent slogan. There is a growing need among investors for investments which fulfill environmental standards as well as social criteria. However, for Impact Asset Management sustainability means much more than just satisfying a momentary trend. For us, sustainability means handling the resources entrusted to us so as to ensure that they meet the needs of today’s generation without encroaching upon those of future generations.
Some years ago, Impact Asset Management already established its Vision Microfinance brand which is operative in the field of microfinance. Microfinance offers people in emerging markets and developing countries the chance to bring about a long-term improvement in their own circumstances and thus also in the opportunities for future generations.
Impact's ESG funds are the second key area of focus for sustainable investment opportunities. As well as financial indicators, they also consider non-financial factors (ESG criteria).
What does ESG stand for?
ESG stands for environment (E), social criteria (S) and governance (G). Companies are analyzed on the basis of these three aspects, providing potential investors with a detailed picture of a specific company and its commitment to operating in a responsible manner.
ESG thus encompasses much more than just financing of environmentally-friendly technologies. A company which is guided by ESG criteria undertakes to operate ethically and sustainably.
Companies with high ESG scores have a proven track record of superior long-term performance by comparison with their competitors with lower ratings. ESG funds support responsible activities, generate non-financial returns and also offer the opportunity for long-term above-average yields.
Engagement
Engagement is an active dialogue between investors and companies with the aim of identifying any ESG weaknesses and encouraging the company for improved sustainability performance. Our engagement activities are organised into collaborative engagement within the UN-PRI Engagement Network and through our ESG research provider, and individual engagement. Collaborations focus on both thematic and norm-based issues, while individual engagements can take place either on an ad-hoc basis or through incentives (in the course of bringing about a sustainable change in values with the aim of getting the companies concerned to adapt to the I-AM minimum standards).
Active Voting
Shareholders are owners of the companies and can exercise their voting rights at general meetings to enforce sustainability concerns. An effective voting policy can lead to possible changes via a complete analysis and lead to better investment decisions. Customer benefits can be increased and indirect benefits for the economy and the environment can be provided. Voting rights are exercised via a proxy (so-called "proxy voting"). This ensures that our ESG guidelines are incorporated into the general meetings.
For more details on our dialog strategies, see I-AM Dialogue Strategies
Current projects:
Investor Statement „Facial Recognition“
Access to Medicine Foundation
Open letter to the European Commission - Exclusion of nuclear energy, within the EU Taxonomy Regulation, from sustainable economic activities
2024 Investor statement on Ethical AI | World Benchmarking Alliance
I-AM Engagements 2023
Proxy Voting Summary 2023
ESG Investment Process
Our ESG product family consists of UCITS-compliant single securities funds, portfolio funds and special mandates, which are managed according to a discretionary and a quantitative approach, taking into account the respective product specifications.
The discretionary approach of our single funds can be summed up in the terms quality - sustainability - active risk management. Quality refers to the fundamental characteristics of the companies invested in, sustainability refers to the full ESG integration of the strategy, active risk management we see as a cornerstone of our investments. High-quality companies are usually long-term oriented and thus also financially sustainable.
With regard to the ESG portfolio funds, in addition to a quantitative and qualitative analysis of the target funds, ESG criteria are integrated as part of the investment process.
The aim is to offer a stable portfolio of high-quality companies or target funds with strong ESG standards. ESG integration is complementary and can help positively influence overall performance through risk reduction. Active risk management is designed to help align and optimise risk and return.
For us, the principle of sustainability is therefore more than just the pure ESG consideration, but aims overall at the long-term stable development of the company's activities. If, for example, the careful use of resources or the responsible treatment of employees is emphasised, then these concepts overlap with the goal of long-term return on equity and thus the principle of quality.
ESG-Key-Performance-Indicators
ESG-Key-Performance-Indicators are sustainability indicators that are particularly important for the performance and risk assessment of companies.
We measure and report on the social and environmental impact of ESG fund investments in the following categories, among others: overall ESG score (and aggregated E, S and G scores), comparison with the MSCI Fund Rating Universe, distribution of ESG ratings, breakdown of ESG ratings by sector, ESG rating sector breakdown, ESG controversy score distribution, carbon footprint, weighted average carbon intensity and an exclusion list by sector, business activity and global standards.
Current ESG-Report of the I-AM GreenStars Opportunities
Current ESG-Report of the I-AM GreenStars European Equities
Current ESG-Report of the I-AM GreenStars Moderate (Change of name as of 05/13/2024, formerly I-AM GreenStars Absolute Return)
Current ESG-Report of the I-AM GreenStars Global Equities
Current ESG-Report of the I-AM GreenStars Balanced
Further ESG Reports are available on request.
Directive on Controversial Weapons
Impact Asset Management is committed to prohibiting direct investment in the purchase of outlawed armaments. By outlawed armaments, we mean the following categories: Landmines and cluster munitions, biological and chemical weapons (including white phosphorus), uranium and incendiary weapons, and any links to nuclear weapons, inside and outside the Nuclear Non-Proliferation Treaty.
For all single stock funds managed and advised by Impact Asset Management GmbH, the exclusion of companies with any links to controversial arms applies. This affects direct producers of relevant weapons systems as well as manufacturers and suppliers of purpose-built components.
For all funds of funds managed by Impact Asset Management GmbH, the exclusion applies to target funds with direct investments in connection with landmines and cluster munitions, biological and chemical weapons (incl. white phosphorus), uranium and incendiary munitions.
Furthermore, target funds with investments in companies producing nuclear warheads and/or whole nuclear missiles, companies producing components designed or significantly modified for exclusive use in nuclear weapons (warheads and missiles) and companies involved in the production and/or storage of fissile material used in/for nuclear weapons are excluded.
The review of the above exclusions is done in close cooperation with our ESG rating providers and is based on current data availability. Further details can be found in our currently valid investment processes.
When Impact Asset Management GmbH manages and advises special funds/mandates, this obligation is complied with to the best possible extent, taking into account any agreements concluded with the client.
The European SRI Transparency logo signifies that Impact Asset Management commits to provide accurate, adequate and timely information to enable stakeholders, in particular consumers, to understand the Socially Responsible Investment (SRI) policies and practices relating to the fund. Detailed information about the European SRI Transparency Guidelines can be found on www.eurosif.org. The Transparency Guidelines are managed by Eurosif, an independent organisation. The European SRI Transparency Logo reflects the fund manager’s commitment as detailed above and should not be taken as an endorsement of any particular company, organisation or individual.
Speculative deals with food commodities
Impact Asset Management excludes the direct use of derivatives that may enable or support speculative deals with food commodities for all investment funds it manages or mandates it advises. Specifically, derivative instruments in the agricultural sector are affected by the exclusion.
Sustainability Advisory Board
The Sustainability Advisory Board of Impact Asset Management GmbH is composed of the CIO, Head of Fund Management and the heads of the Microfinance and ESG divisions of Impact Asset Management GmbH. It reviews and scrutinizes the sustainability performance of the ESG single-issue funds. For example, with regard to the sustainability concept and the selection of the corresponding positive and negative criteria. It also takes on an advisory role when it comes to discretionary single stock checks of companies that are on the so-called Watch List with regard to the UN Global Compact (UN GC), which means that a violation of the UN GC does not necessarily have to have taken place but is possible. The findings process is preceded by a detailed qualitative and quantitative review based on external data.
New scientific and social findings are also discussed by the Advisory Board, which may possibly lead to a change in strategy. In addition to these tasks, the Advisory Board formulates a corporate social responsibility (CSR) policy, setting improvement targets that are subsequently to be implemented by the individual fund managers or the company as a whole. The implementation of the targets and the sustainability policy are regularly reviewed and recorded in writing.
Other tasks of the Sustainability Advisory Board:
The Sustainability Advisory Board can define new exclusion criteria and regularly reviews the effectiveness and meaningfulness of the existing criteria.
The Advisory Board is responsible for the design and maintenance of the ESG best-in-class indices created by Impact Asset Management.
