Stewardship is an integral part of First AM: we are committed to acting as responsible representatives for the assets we manage.
By integrating sustainable factors, we pursue social and environmental justice and have mechanisms and tools in place to avoid greenwashing. Our mission is also to align our sustainability approach with the investment needs of our clients to build a solid foundation for the future.
Our adherence to international best practice principles
Our Stewardship Principles provide us with a framework to ensure that our investment strategy is consistent with our sustainability approach.
As a signatory to the UN Principles of Responsible Investing (PRI), we are committed to the highest level of transparency and disclosure in our reporting and to acting in accordance with the SDGs (Sustainable Development Goals) and the UN Global Compact.
Erste AM also strictly adheres to global stewardship codes such as International Corporate Governance Network (ICGN) and Responsible Business Conduct for institutional investor (based on OECD guidelines).
In line with these principles, we use our in-house tools to integrate ESG factors into our investment decision-making process. All of our mutual funds are subject to a minimum set of ethical standards, and we use our expertise to regularly review the ESG profiles of our holdings and ensure the highest possible level of accountability for our funds and portfolios.
Since 2016, our adherence to the PRI Montreal Pledge has also required us to measure and publish the carbon footprint of our equity and bond funds.
Supporting responsible corporate action
As asset managers, it is not only our responsibility to ensure the sustainability of our own activities, but also, on the basis of “active ownership,” of the companies in which we are invested.
Engagement – i.e. direct dialogue with companies – and the exercise of voting rights (in all our mutual equity funds) is our most effective tool for promoting social responsibility, environmental protection and transparency.
By establishing a constructive dialogue with companies, we find it easier to assess their alignment with our sustainability criteria and to influence the integration of ESG factors into their management decisions.
Because we are stronger together, Erste AM is also an active member of investor associations and works closely with partners to increase clout on an international basis. Together with others, we thus work against climate change and for the transformation to a green economy.
We are currently actively leading engagement projects with Austrian giant OMV (as part of the Climate Action 100+ project) and have been successfully working with them since 2014 to achieve defined emission reduction targets.
We are also currently involved in several initiatives to intervene in human rights controversies (child labor in the cocoa sector, human rights violations in Xinjiang).
Stewardship: a powerful tool in the fight against greenwashing
Despite growing efforts by the EU (i.e. the EU regulation on sustainable financial reporting) to bring down greenwashing, there are limits to what laws can do against this phenomenon. Therefore, it is important that we take our share of responsibility and join the movement.
Our stewardship approach not only provides us with the tools to embed sustainability at the heart of all our investment processes, but also allows us to better understand the intentions of our invested companies in order to truly act responsibly. In other words, it allows us to ensure the highest possible ethical standards, minimize risk, and drive the kind of change that reflects our values.
Prognoses are no reliable indicator for future performance.
Stewardship vs. greenwashing – Erste Asset Management is written by Orlane Millet for blog.en.erste-am.com