1. Summary of the Sustainable Investment Handbook

1. Summary of the Sustainable Investment

Handbook

Part 1: Sustainable Investments in Context

Chapter 3. Sustainable Investments and Institutional Investors in Switzerland—Overview of Current Status and Developments

• Sustainable investments are increasingly important for Swiss institutional investors. • Some cantonal pension funds have regulations that require sustainability criteria to be taken into consideration when investing. • The Swiss market for sustainable investments is growing faster than the overall market. This includes internally managed sustainable assets of institutional investors.

Chapter 4. The Performance of Sustainable Investments—An Overview of Academic Studies

• Financial markets fail to take full account of the risks and benefits associated with a company’s ESG performance. This creates potential opportunities for investors. • This finding has been confirmed by numerous scientific studies that analyse the impact of various ESG aspects on a company’s performance. • For sustainability funds, the results are mixed. However, many studies show that sustainable investments do not adversely affect financial performance.

Chapter 5. Development of the Regulatory and Legislative Environment for Sustainable Investment

• France, the Netherlands, and the United Kingdom have the most highly developed regulation concerning sustainable investment compared with the rest of Europe. • Swiss pension funds have a legal obligation as equity shareholders to actively vote.

The integration of sustainability themes in the investment process is consistent with the fiduciary duties of institutional investors, if not a requirement.

Part 2: Different Approaches to Sustainable Investment and Specific Asset Classes

Chapter 6. Introduction to Different Approaches to Sustainable Investment

Chapter 7. Exclusions

• Exclusion criteria are an established approach to sustainable investment, intended to reflect the investors’ values within their investments. • Any detrimental impact on performance can be compensated by modifying the exclusion criteria, optimising the portfolio, or combining the approach with other ESG strategies.

Case Study: Velux Foundation

A foundation increases its impact through sustainable investment.

Chapter 8. Best-in-Class Approach

The best-in-class approach is a method for selecting businesses with a convincing record of implementing ESG measures. It allows the construction of diversified securities portfolios that are financially attractive and at the same time support sustainable long-term growth.

Case Study: Eltaver AG

A family office invests in line with family values.

Chapter 9. ESG Integration Approach

ESG integration is the explicit inclusion of ESG opportunities and risks in traditional financial analysis and investment decisions of asset managers. Sustainability factors can be an indicator of a company’s competitive advantage and influence the longer-term assumptions of financial analysts.