ESG

Our ESG approach

We pursue an integrative ESG approach taking into account sustainability risks, which is based on the principle of responsible investing and the three pillars of "Exclusion", "Integration" and "Engagement". We believe that analyzing ESG topics is important to fully understand the risks we take in our investments and is crucial in meeting corporate objectives. Consequently, ESG is incorporated in our research process. ESG considerations have a meaningful impact on the fundamental investment analysis of the companies that are relevant to the strategies we manage.

Integration & Engagement

ESG integration is a basic component of our fundamental credit analysis process to identify additional opportunities and risks. Our analysts employ qualitative analysis using various ESG data and third-party research in order to identify ESG risks and opportunities. We incorporate this information into our decision process in terms of whether to invest as well as weighting as we consider risks and opportunities as part of the relative value process.

In our ESG assessments we use a proprietary materiality map as a tool to provide guidance on the most material ESG topics across all sectors. For each sector, criteria within the E, S and G themes are identified that are classified as material and relevant to the market, for example with regards to climate change we look at GHG emissions. These criteria are cat-egorised into three levels – high, medium and low or having no relevance to credit quality. This results in a materiality overview that shows which ESG themes are meaningful for assessing credit quality. The assessment reflects our own opinion and guides the analyst which criteria are to be analysed the most closely for an optimal ESG risk assessment. Based on the ESG risk assessment we classify the issuer as “low risk”, “medium risk”, “elevated risk” or “high risk”.

In the event of heightened ESG risk which is important for our investment decision, we seek dialogue with the company. Fisch engages with the company with the intention of improving the company’s ESG guidelines, in order to reduce investment risk. We monitor and document whether the company has undertaken the necessary steps to address the issues that have been raised. Major environmental ESG topics cover climate change, water stress, raw material sourcing, and energy efficiency. Major social ESG topics include prod-uct safety, labour management/diversity, data security, and supply chain management. Major governance topics encompass independence of board structure, ownership share-holder rights, corruption, and business ethics.