Our responsible approach to ESG
What governs our investment decisions
Well-informed decisions and added value
We acknowledge ESG (Environmental, Social, Governance) issues as key non-financial parameters that may affect long-term returns on investments and investment portfolios.
Along with traditional financials, we take ESG factors into consideration during the investment process. This allows us to make a well-rounded assessment of investment sustainability, risks and opportunities.
Our approach to responsible investments integrates ESG factors not only at risk but also at opportunity level, leading to better-informed decisions and added value for our customers’ portfolios.
Our sustainability-related disclosures
Our activities comply with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (Sustainable Finance Disclosure Regulation – SFDR).
See all our sustainability-related disclosures.
A PRI initiative signatory
We are a signatory of the UN Principles for Responsible Investment (PRI) initiative. In this context, we honour our commitment to integrate ESG parameters in investment analysis, decision-making and active ownership practices.
We aim to contribute towards a more sustainable global financial system.
Our ESG Policy
Our Environment, Social and Governance (ESG) Policy details the procedures we implement to generate long-term value and contribute to society.
Our ESG Policy sets our guiding principles and ensures that sustainability-related risks and opportunities are appropriately integrated into the management of investment portfolios. The Policy focuses on:
Environmental issues – These include concerns about the quality and functioning of the natural environment, such as carbon emissions, biodiversity, environmental protection regulations, water resources, waste management, climate change risks, and resource efficiency.
Social issues – These include concerns about the rights, well-being and interests of people and communities, such as supply chain management, respect for human rights, labour standards, and employee health and safety.
Governance-related issues – These concern the governance of companies and other investee entities, including Board structure, remunerations and independence, transparency, shareholder rights and disclosure of information.
How we implement our ESG strategy
Identifying and assessing
While allocating funds across asset classes, we:
- Identify crucial, value-generating ESG issues.
- Assess and analyse ESG parameters.
Tailoring our approach
The extent to which we approach sustainable investments and the method applied to do so may differ depending on:
- Mutual fund category
- Geographical area.
- Security type.
We tailor our approach to sustainable investments as needed, based on the needs and features of each portfolio.
Applying 3 investment strategy filters
We implement an optimal combination of ESG strategies across the investment decision-making process.
Investment strategy filter 1 – We tailor our range of investments to our values and standards. This means that financial activities, companies or countries that do not meet our criteria, or violate international standards, are excluded from our range of permissible investments.
Investment strategy filter 2 – We screen for companies that focus on specific business activities and/or implement best business practices according to ESG criteria. We use an aggregate ESG score when conducting sector and peer analysis. Our aim is to select best ranked issuers and disregard those with poor performance.
Investment strategy filter 3 – We integrate ESG factors to improve fundamental research and analysis on issuers we invest in. We take company or country ESG characteristics into consideration to identify ESG risks and opportunities, and we update the forecasts on future financials and valuations accordingly.
Our investment process is supported by the ownership practices and policies we implement, as well as our status as a PRI signatory.
Managing sustainability risks
With strict and consistent risk management measures in place, we can protect our investors’ interests.
The Risk Management Unit operates within a specific framework to monitor sustainability risks for each UCITS portfolio, and communicates relevant results to the Board of Directors, senior executives and portfolio managers. The framework is intended for the assessment of sustainability risks and their integration into the risk profile of each UCITS portfolio.
The Unit also monitors compliance with any internal thresholds we may have set as part of our ESG Policy implementation.
Find out more about our risk management methods.
Monitoring our processes
We have established an ESG Investment Committee. In its capacity as the competent body for implementing the responsible investment policy, the Committee:
- Ensures ESG criteria are integrated into our investment policy.
- Ensures we meet our commitments as a signatory to the Principles for Responsible Investment (PRI).
- Assesses our progress as regards common practices and regulatory objectives.
We regularly reassess our ESG Policy and update our investment process with material ESG issues.
As a signatory of the global PRI initiative, we record any activities relevant to responsible investing in the annual Transparency Report we submit in the context of the PRI.
We have created products based on an ESG-targeted investment strategy that promote sustainability.
- Alpha (LUX) Global Defensive ESG FoF
- Alpha (LUX) Global Balanced ESG FoF
- Alpha (LUX) Global Themes ESG FoF
- Alpha Cosmos Stars Europe ESG Equity FoF
- Alpha Cosmos Stars USA ESG Equity FoF
These products apply certain ESG criteria in order to define an eligible universe of underlying funds that has leading ESG ratings and tilt the portfolio in favour of strong sustainability performers.