Sustainable investment products - our idea, our methodology

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From sustainable investment solutions to community involvement and environmental sustainability: corporate responsibility has a long tradition at Vontobel. It is perceived in all its complexity - and regularly receives awards.

Sustainability, including the responsible use of natural resources and the protection of universal human rights, affects many areas of life. An increasing number of investors would like to see sustainable aspects taken into account in their financial investments.

Certificates and structured notes (hereinafter "products") are, in our view, important components of a diversified financial investment. By offering products with sustainability features, we give the protection of natural resources and universal human rights a central position in our business activities. In the European region, this applies in particular to the realisation of the goals of the Sustainable Finance Agenda of the European Union, which we would like to support and promote with such products.

Our classification of products with sustainability features is based on industry standards and reads as follows:

  • Non-ESG:Products without sustainability features are classified as "non-sustainable".
  • Environmental: In the case of products with the designation "environmental" within the meaning of Art. 2 No. 7 lit. a) of Delegated Regulation (EU) 2017/565, a certain percentage of the use of proceeds is used to finance environmentally related economic activities, such as solar or wind power plants. The respective percentage value is determined according to the specifications of the Taxonomy Regulation. This information generally refers to the level of the issuer or the group to which it belongs.
  • Sustainable: In the case of products with the designation "sustainable" within the meaning of Art. 2 No. 7 lit. b) of Delegated Regulation (EU) 2017/565, a certain percentage of the use of proceeds is used to finance sustainable economic activities. The respective percentage value is determined according to the requirements of the Sustainable Finance Disclosure Regulation. This information generally refers to the level of the issuer or the group to which it belongs.
  • PAI: In the case of products with the designation "PAI" (ESG strategy with consideration of environmental and social issues) within the meaning of Art. 2 No. 7 lit. c) of Delegated Regulation (EU) 2017/565, an attempt is made to reduce adverse impacts on the most important sustainability factors (so-called Principal Adverse Impacts). This consideration is generally carried out at the level of the issuer or the group to which the issuer belongs. At the level of the underlying, consideration is given within the framework of the ESG strategy by means of exclusion criteria.

In connection with the specific sustainability characteristics of a product, two levels are generally considered: On the one hand, the level of the issuer or the group to which the issuer belongs, and on the other hand the level of the underlying. The focus is on the issuer or the group to which it belongs.

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Classification of products

The Issuer

From sustainable investment solutions and a commitment to the community to environmental sustainability: corporate responsibility has a long tradition at Vontobel and appreciates all its complexity.

Vontobel is committed to the principles and goals of sustainable development. For example, Vontobel signed the UN Principles for Responsible Investment (UN PRI) in 2010 and joined the UN Global Compact in 2017.

From leading ESG research and rating agencies Vontobel receives above-average ratings:

  • The ISS Group has awarded Vontobel "Prime Status" within the ISS ESG Corporate Rating. Prime status is awarded to companies that exceed the defined sustainability requirements (prime threshold) of ISS ESG for a specific industry within the ISS ESG Corporate Rating.
  • Another leading ESG research and rating agency, Sustainalytics, has also given Vontobel Holding AG an ESG risk rating of 17.9 (low risk). This puts the company in 105th place out of a total of 920 within the "Diversified Financials" industry group.
  • Finally, MSCI ESG has also rated Vontobel above average. On a scale from CCC to AAA, MSCI ESG rates Vontobel A.

Vontobel is also a member of further various organisations and a co-signatory of various investor initiatives. In this way, Vontobel is committed to the sustainable development of the environment and society. Further information on Vontobel's corporate responsibility is available on the website.

In connection with the issuance and classification of products with sustainability features, Vontobel observes the Product and Transparency Standard for Sustainable Structured Securities of the German Structured Products Association (BSW) (hereinafter "Sustainability Code"). The Sustainability Code is available here

The Underlying

In relation to the underlying, we ensure that the company that issued the underlying (for example, the shares or bonds of a company) has not committed any serious violations of the UN Global Compact and that the selection of the underlying is made in accordance with a dedicated ESG strategy.

The underlying is selected on the basis of a selection procedure that takes into account, for example, minimum exclusions, a best-in-class approach or a thematic selection.

In doing so, we undertake - in accordance with the Sustainability Code - not to identify any products with a sustainability impact whose underlying or reference debtors are companies that generate sales (production and/or distribution) from the following sources:

  • Military hardware > 10 % (banned weapons > 0 %)
  • Tobacco production > 5 %
  • Coal > 30 %

In addition, further exclusion criteria apply.

Within the framework of the ESG strategy, the results of the respective Vontobel competence center within the Client Unit “Asset Management” and its boutiques as well as external data providers (such as the MSCI ESG Rating and Refinitiv) serve as data sources.

Further information and the complete "ESG Product and Transparency Standard of Vontobel"can be found here.

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