By Michal Kustra, RCM |
Michal Kustra, Member of the Management Board of Raiffeisen Capital Management and responsible for Sales in Italy and CEE as well as for the Center of Competence CEE, shares with us his four main factors how to make an impact by responsible banking.
- Sustainable investment is the fastest growing segment in asset management. Within the last five years, ESG investments have developed from an ethical niche topic to a comprehensive investment philosophy. Sustainable products are part of the standard range of at least those investment companies that want to succeed in the market. But the term “sustainable” is still too freely interpretable. Investors are therefore very often faced with the dilemma of having too little insight into the subject matter to be able to assess for themselves whether the product in which they (want to) invest also delivers what it promises: namely to be a lever that makes companies and states act more responsibly, socially and climate-friendly.
- Certifications and labels provide orientation for sustainable investors. Since it is often difficult for investors to see through which of the funds designated as “sustainable” are managed according to sustainable criteria in terms of social, ecological and ethical aspects, certifications and seals of approval are particularly meaningful in this segment. A closer look at any sustainability seals can be worthwhile. The FNG seal of the Forum “Nachhaltige Geldanlagen” (Forum for Sustainable Investments) and the Austrian Eco-Label for financial products prove, among other things, the sustainable investment quality of Raiffeisen Capital Management’s funds.
- A very important aspect of sustainable investing is achieving impact. This requires a very active investment style and means going beyond negative and positive screening and actively engaging with companies or exercising the voting rights associated with shares. This requires a good knowledge of the companies and questioning the role social responsibility and sustainability play in the strategy of the respective company. As a rule, corporate dialogues and the exercise of voting rights as a means of exerting influence are more successful the higher the stake in the company, i.e. the more shares it holds. Very often companies are induced to more transparency within the framework of corporate dialogue, sometimes also to change their strategy. For this reason, the formation of coalitions among responsible investors is also very sensible and necessary in corporate dialogues and the exercise of voting rights. Raiffeisen Capital Management is making great efforts in this area.
- Sustainability doesn’t come at the expense of earnings. Sustainable investing is not only about “doing good”, but also about generating returns, i.e. performance. Many sustainable investors have experienced for themselves in recent years that sustainability does not come at the expense of performance. Often the opposite can be the case. At first glance, better environmental and social standards may appear to increase the costs of companies and governments and erode profitability, but sustainable structures and the efficient use of resources pay back into overall performance. Risks are often identified and avoided more quickly. Good working conditions lead to fewer strikes, corruption and fraudulent acts. Employees stay with the company longer, which has a positive effect on productivity. At the end of the day, this contributes to better and sustainable business development, which has a corresponding impact on performance. Naturally, sustainably managed funds are also subject to the fluctuations of the capital markets, so that capital losses are also possible here.
Investments in funds are associated with higher risks, including capital losses.
The published prospectuses and the information for investors in accordance with § 21 AIFMG as well as the customer information documents (key investor information) of the sustainability funds of Raiffeisen Kapitalanlage-Gesellschaft m.b.H. are available in German at www.rcm.at (for some funds the customer information documents are also available in English) or, in the case of sales of units abroad, at www.rcm-international.com in English (possibly in German) or in your national language.
This is a marketing communication from Raiffeisen Kapitalanlage GmbH, Mooslackengasse 12, 1190 Vienna. The contents of this document constitute neither an offer, a recommendation to buy or sell nor an investment analysis.
Status: August 2020