68 Of the funds managed directly by Raiffeisen KAG (€ 22.3 billion), the three exclusion categories – controversial weapons, agricultural commodities and coal – are taken into consideration in over 80 percent of the managed volume, in other words, in all retail investment funds and nearly all special funds. Restrictions apply only in the case of umbrella funds containing third-party funds. The goal of continually enhancing sustainability in the core business is ensured by a dedicated “Sustainable Investments” team together with a group of specialists within the Fund Management department. Close coordination between this department and other areas of Asset Management ensures ongoing expansion and dissemination of sustainability know-how within Raiffeisen KAG. This is reflected not least in our active commitment in the sense of exercising our right to vote or actively communicating with listed companies on ESG issues. In 2016 – similar to the previous year – 196 active engagements with companies we are invested in took place and 78 votes were cast either directly at Annual General Meetings or via specific platforms. Another result of the intensive involvement with ESG topics is the publication of newsletters – in 2016, there were five – addressing specific questions of sustainable investment, most recently the topics of coal, regionality and urbanization, for example. Furthermore, Raiffeisen KAG has been an active member of the Sustainable Investment Forum, the professional association for sustainable investment in Germany, Austria, Liechtenstein and Switzerland since 2009 and, since 2007, a member of the Raiffeisen Climate Protection Initiative. This was the beginning of a growing involvement with an overall integration of sustainability into the asset management business. The UN PRI was signed in 2013, while, at the same time, the management competence and capacity was expanded as a significant step toward the integration of sustainability elements into the total investment, initially on the basis of KAG publicly offered funds (retail funds). Additional information systems were also purchased and integrated for the increased integration of ESG research. Other memberships include the “CDP” or “CDP Water” (Carbon Disclosure Project, a non-profit organization with initiatives in the area of climate-damaging greenhouse gas emissions and water consumption) and in the Green Bond-related initiatives “Investor Statement re: Green Bonds & Climate Bonds” as well as “Green Infrastructure Investment Coalition”. Membership in these initiatives is a very active one. Raiffeisen KAG regularly takes the impulses and information it receives there on board, while, at the same time, it shares its own experiences in the day-to-day sustainability investment business. These initiatives also usually include the (further) development of standards which improves the comparability and the impact of sustainable investing. Sustainability philosophy and investment processes Raiffeisen KAG’s sustainability philosophy, as it is implemented in the sustainability funds, consists of three main elements: The first is the expanded information base that comes from the consideration of sustainability. Taking into account extrafinancial information – in addition to traditional financial criteria – leads to a larger data set for the analysis of companies and issuers compared with traditional investments. The second point that follows this is the broader basis for selection decisions and risk reduction. Sustainable analyses can improve the risk profile of the portfolio. In general, the responsibility and future viability of the investment is the central focus. Ecological, stakeholder-relevant and governance risks are considered in the investment process and improve the risk profile of the portfolio. Thirdly, the positive influence on yield that comes with sustainability needs to be mentioned. Investing in the best companies and issuers in terms of sustainability leads to stable yields that are at least comparable with those of traditional investments.
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