Good for the environment. Good for society. Good for the performance. Everybody is talking about sustainability, even in an institutional investment capacity. Universal-Investment helps investors to analyse their portfolio by applying sustainability criteria using ESG-Reporting (environmental, social and governance).
ESG-Reporting is currently based on MSCI ESG research. The sustainability is measured using a scoring model on a scale of 0 to 10. A client portfolio’s ESG score is compared in the evaluation with the ESG scores of a sustainability benchmark, as well as of a conventional market benchmark. Further analyses show what individual positions have particularly positive or negative sustainability scores. In addition, a top-10 overview identifies the best and worst portfolio positions on the basis of the ESG criteria. Individual evaluations based on the so-called business involvement or impact monitor state which controversial industries, countries or practices have a particularly high representation in a portfolio.
Our ESG-Reporting, which is based on the MSCI ESG research, offers a quick overview of a portfolio’s ESG properties and its individual positions. Investors can therefore quickly identify at which points their portfolio is sustainable and where it is not.
In addition to an ESG analysis, the portfolio's CO2 footprint can also be shown. The CO2 emissions of the individual positions are calculated, stranded assets reported and efficiency, risk exposure and positive allocation analysed in relation to clean technology.
MSCI® is a registered trademark of MSCI Inc.
the selected client portfolio relative to two benchmarks: a market-capitalised benchmark (MSCI ACWI) and the sustainability benchmark (MSCI ACWI ESG).
In this example, the client portfolio has a total score of 5.19, which is marginally better than the market-capitalised benchmark (5.15). However, the portfolio valuation is significantly lower than the sustainability benchmark (5.19 vs. 6.13).
The environment, social and governance criteria then paint an even more differentiated picture:
Based on environmental criteria, the portfolio is in a markedly worse position compared with the two benchmarks. The social and governance criteria demonstrate quite positive differences relative to the general market-capitalised approach. Compared with the sustainability benchmark, however, the portfolio in these two area still underperforms the sustainability benchmark (social: -8.43%). Thanks to the marginal deviation only, governance (-0.24%) is the only criterion that can be considered almost compliant with the ESG benchmark.
The detailed ESG-Reporting offers a direct, simple graphic presentation of the areas to be focused on in order to achieve an improved sustainability score through further optimisation.