What we stand for

About ethics, sustainability and Environmental, Social and Governance (ESG)

Back in 1982, ethics and sustainability were largely unknown in the financial sector. At the time, a sustainable investment was an investment that would generate the highest possible return over a long period of time, if at all.

A clear set of values

Dr. Elisabeth Höller adopted a different stance. As an independent asset manager, neither did she approve of the Swiss pension funds’ practice to invest monies pertaining to their beneficiaries in companies that benefit from wars as arms manufacturers nor did she believe in buying bonds from companies whose business models were based on the overexploitation of nature, on child labour or climate-damaging refrigerants. Rather, Dr. Höller was interested in morally justifiable investments for her customers, i.e. in companies that were socially and ecologically sustainable and ethically responsible. Her biggest challenge was to track down stocks and bonds meeting these criteria because no research focused on ethics and sustainability was available. This is why she developed her own research approach and became a pioneer.

Dr. Elisabeth Höller

Dr. Elisabeth Höller

Dr. Elisabeth Höller is one of the best-known forerunners in promoting ethical investments. Having studied Law, Business Management and Economics, she founded a highly successful asset management company in Zurich in 1982 named after herself, which she managed until she sold it in 2005. She started the ethical funds “Prime Value” and “Prime Growth” as well as the Invera sustainability fund “Excellent Global Mix” (today “Excellent ESG Global Bond”). In 2005, she founded Invera and continued to rely on her proven research approach until her retirement in 2018.

Times have changed

The majority of the population nowadays disapproves of companies enriching themselves at the expense of the environment or using sweatshops. Many companies have underestimated or ignored this change in public opinion and come to regret it bitterly later on as information about unethical and unecological behaviour is spreading instantly over social media. The general public reacts with indignation to such offenders, which may ruin their reputation and business and significantly send down their stock market prices in no time at all.

Since sustainability is not just limited to the environment, companies are increasingly aware of the ESG criteria these days (environmental, social and governance factors, focussing on the environment, society and corporate governance). Anyone who violates these rules will be punished from all sides, i.e. by their customers, by their investors, on the job market and in the media. Not least due to said pressure from their stakeholders, more and more companies are complying with the ESG guidelines. This opens up fresh investment opportunities for private and institutional investors.

Sustainability pays off in many ways

An investment that only benefits the investor cannot be sustainable. This is because the benefits of sustainable investments extend to the remaining stakeholders as well. Say you buy shares in a (fictitious) company that develops innovative technologies for CO₂ filtering, then this investment would not only be advantageous for you, but also for the environment. You would thus make a positive environmental impact. Moreover, if this company behaves in an exemplary fashion in terms of equality and corporate governance, you will achieve a social and an ethical return on top of a financial and ecological one.

Creation of transparency

The complex global supply chains pose an enormous challenge to companies as well as sustainability research. How can you ensure that no cheating is going on among the countless subcontractors in the Far East? Are the specifications given by the customer adhered to by everybody? Is there any proof that none of the organic soybeans imported from Brazil grew in a field created by slash-and-burn practices? Creating transparency down to the last point in the supply chain is difficult and time-consuming, but of utmost importance. When evaluating investments in a particular company, we therefore do not solely rely on the ESG criteria, but also our own, even stricter guidelines.

Our selection method:
Exclusion before inclusion

Our research focuses on over one hundred criteria. ESG criteria alone are not sufficient for us when suggesting investments in a company or of a particular issuer. We also apply our own, even stricter standards. We first deploy negative screening and then apply positive screening. Initially, we eliminate all companies and issuers that we do not wish to have anything to do with because they violate one of our zero tolerance criteria. This leaves us with companies and issuers which we do not fundamentally object to.

Thereafter, we go for excellence, i.e. select investments that match our positive criteria as much as possible.

Exclusion criteria: avoid whatever is bad

In order to create transparency, we are happy to publish the final lists of our exclusion criteria for companies and countries. While we have no tolerance for certain aspects, we set a tolerance limit for others relative to the total turnover of the company. Alternatively, we rely on the scores derived from the ESG analyses made by Inrate.

Our exclusion criteria for companies are as follows:

  • Consumption of human embryos (zero tolerance)
  • «Red genetic engineering» - genetic modification of animals and humans (zero tolerance)
  • Pornography (zero tolerance)
  • Gambling (suppliers: zero tolerance; equipment / software / plant manufacturers: > 10% of total turnover)
  • Military equipment (production / sale: > 5% of total turnover)
  • Alcohol (production / sale: > 10% of total turnover)
  • Tobacco products (production / sale: > 10% of total turnover)
  • Nuclear energy (production / trading and sale of electricity: > 5% of total turnover; supplier of product / services: > 5%; uranium mining: > 5% of total turnover)
  • Coal mining; coal-fired power and equipment (production / trading and sale: > 5% of total turnover)
  • Oil/gas production; oil/gas products and petroleum- or gas-based power generation (production / trading and sale: > 5% of total turnover)
  • «Green genetic engineering» - Genetically manipulated organisms (cultivation / marketing: > 5% of total turnover)
  • Working conditions (Score > 0.5)
  • Society (Score > 0.5)
  • Environment (Score > 0.5)
  • Business ethics (Score > 0.5)
  • Governance (Score > 0.5)
  • Products (Score > 0.5)

Our exclusion criteria for states are as follows:

We have no tolerance for states

  • which systematically, persistently and significantly violate fundamental rights relating to democracy and human rights (e.g. according to the Freedom House Index).
  • which apply the death penalty,
  • which use torture,
  • having a military budget in excess of 4% of their GDP,
  • that have not signed the Paris Agreement and the UN Biodiversity Convention, and
  • pursuing an expansive nuclear power strategy (power plants in operation without a nuclear power phase-out, power plants under construction or planned).

Positive criteria: go for excellence

At the same time, we are actively looking for companies and issuers that

  • behave in an ethical manner,
  • strive to deploy and implement real transparency,
  • think and act innovatively, and
  • make a sustainable contribution to progress that benefits all stakeholders.

Stakeholder analysis: holistic thinking

The key aspect of our sustainability analysis is the relationship of corporations with their most important stakeholders of a company, whereby we focus on the six most important stakeholder groups, taking a holistic approach and weighting all groups equally. The more balanced the valuation of stocks or bonds, the higher the likelihood of their inclusion in our investment universe.

Stakeholder analysis

Stakeholder analysis