The topic of “sustainability” is becoming increasingly important – also for the capital investment
Our understanding of sustainability risks includes events or conditions in the areas of environment, social or corporate governance (ESG – Environmental, Social, Governance), the occurrence of which could have a material adverse effect on the assets, profitability or reputation of Fondsdepot Bank GmbH.
Examples of ESG risks include climate change, the loss of biodiversity, violations of recognized labor standards and corruption.
The principle of “sustainability” states that no more should be consumed than can be regenerated or made available again in the future. Ecological, economic and social goals are to be kept in balance.
Growing social inequality, resource waste, rising green house gas emissions and advancing global warming have created a new awareness of sustainable investment. The financial sector, in particular sustainable investment and the consideration of ESG factors, has a special role to play here. The so-called ESG factors (environmental, social and good governance) consider non-financial aspects of a financial investment.
Inclusion of sustainability risks in the bank’s risk management system
The bank is mainly exposed to operational risks, counterparty risks, market price risks and liquidity risks that affect its net assets (including capital resources), results of operations or liquidity position. In relation to the bank’s current business model, ESG criteria are mainly relevant to the bank’s reputation. The bank counters these risks with a comprehensive risk management system.
The bank has established a sustainability forum in which regular measures and actions are managed and monitored from a sustainability perspective that offer added value from a sustainability point of view both for the organization itself and for the region. To protect the bank’s reputation, both employees and contractual partners must commit to compliance with the Code of Conduct formulated by the bank. Potential contractual partners are also screened for ESG criteria.
Inclusion of sustainability risks in investment advice provided by Fondsdepot Bank GmbH and its contractually bound intermediaries
We include sustainability risks in the investment advice we provide through our contractually bound intermediaries via the selection of financial instruments that we recommend as suitable. To this end, we cooperate closely with our product partners.
For sustainable financial instruments that we recommend to our customers with a preference for sustainable investments, we incorporate sustainability risks as follows:
We are guided by the specifications of our product providers. Product providers are generally required by regulatory requirements or industry standards to take sustainability aspects into account as part of their investment decisions (in the case of investment funds). On the other hand, certain sustainable financial instruments (so-called ESG strategy products) consider so-called minimum exclusions based on a recognized industry standard. This means that these investment funds do not invest in certain companies that pose particularly high sustainability risks. Alternatively, we also select financial instruments for investment advice that achieve a positive impact on one or more of the sustainability goals formulated in the Sustainable Development Goals (SDGs) of the United Nations (so-called impact products).
In the case of investment funds, which we recommend in particular to our customers without a sustainability preference, the capital management companies are obliged by regulatory requirements to take sustainability risks into account as part of their investment decisions.
Inclusion of sustainability risks in the context of asset management by Fondsdepot Bank GmbH
Bei der Umsetzung der Anlagestrategien berücksichtigt die Fondsdepot Bank GmbH als Vermögensverwalter im When implementing investment strategies, Fondsdepot Bank GmbH, as asset manager, takes into account all relevant financial risks, including all relevant sustainability risks that could have a negative impact on the return of an investment, as part of its selection processes and investment decisions. Also considered are the main adverse effects that could have a negative impact on the sustainability factors in the investment decision.
These risks and adverse effects are monitored on an ongoing basis and the assessment is taken into account in the decision-making processes.
For example, by signing the UN Principles for Sustainable Investment (UN PRI), our asset managers have committed themselves to responsible investment practices and consider the so-called ESG criteria. These relate to environmental and social criteria, as well as to sustainable corporate governance.
One of the aims of sustainable investment is to minimize sustainability risks in investments, as these could reduce the value of an investment. Our asset managers therefore try to minimize or avoid such risks and deal in depth with sustainability issues. This includes, among other things, exchanges with the companies invested in and their values, including reducing their carbon footprint, increasing their efficiency and becoming a greener company.
