Raiffeisen Capital Management is one of only a few fund companies in Europe to hold an AAA rating from the renowned rating agency Scope. At the centre of this rating was the implementation of sustainability in the fund management. What led to this success?
Dieter Aigner: We have had a range of funds for around ten years, that invests according to ESG criteria. A few years ago, we recognised that supporting the transformation towards climate neutrality is the key point when it comes to responsible investing. We have therefore identified seven areas that are very strongly affected by this:
The expertise that we gain as an active asset manager through this "deep dive" into companies and countries is an integral part of our investment process. It therefore also flows directly as a qualitative, discretionary assessment in the decision as to whether we should invest in a company or a country, and thus significantly supports the transformation. This was recognised accordingly by Scope*.
You chair these teams and lead the infrastructure working group yourself. What exactly are these "Future Transformation Topics" about?
Stefan Grünwald: Ultimately, the seven topics address the areas of activity of companies throughout the economy. We discuss and evaluate global trends and developments and their impact on individual companies. It's about investment decisions, but also about forming an in-depth opinion on certain topics in order to be able to make well-founded, value-based decisions.
How are these opinions developed?
Grünwald:We collate scientific findings and opinions, filter and evaluate them according to defined criteria. The focus is on assessing the current ESG impact and the contribution to sustainable business and ESG transformation. In addition, the positively or negatively affected SDGs* are taken into account. We work with very complex cross-cutting issues in almost all areas. No topic can be assessed in isolation. The seven teams therefore cooperate very closely with each other in order to achieve joint results, which then form the basis for the investment process.
Aigner: This networked thinking is a great opportunity and the main difference to other investment companies, but also a major challenge, as there are hardly any companies that only produce a single product. Wind power is a good example. It clearly has a positive connotation, but many energy companies also have other sectors in their portfolio in addition to wind power. All of this has to be taken into account. For example, we also look at where the raw materials for a wind turbine come from. The very complex issue of supply chains also plays a major role in the assessment. It's about finding a way that benefits the transformation more than it harms it.
Grünwald: We deliberately focus on topics where changes are taking place, not only because this is where investment opportunities arise, but also because this is where the key ESG issues arise. It is a core part of our work to constantly keep our finger on the pulse and to accompany the transformation by engaging with companies.
Does this make external research obsolete?
Grünwald: No, we naturally continue to use external data sources and do not claim to be the “better university”. But we also check the plausibility of the data provided by rating agencies. We see this as the most fundamental task of an active asset manager. We also bring external experts into the working groups to gain an additional out-of-the-box view of our investment themes.
Is this intensive examination of the "Future Transformation Topics" and their impact on sustainability and transformation also viewed positively by your investors?
Aigner: Yes, absolutely. We are not doing this as an end in itself, but primarily with the aim of reducing risks for our investors and utilising meaningful financial opportunities. We are in constant dialogue, especially with our institutional investors. Here, too, we act as an active asset manager by viewing and supporting this special target group as strategic partners whose specific requirements and extremely high demands on investment topics are constantly evolving. They value our high level of credibility in this area and also our transparency. On our communication platform Investment-Zukunft, they - and everyone else - can access all the information they need on our "Future Transformation Topics". There, we make our entire investment process tangible and comprehensible and show how long-term, responsible investing on the capital market can work.
*) The Raiffeisen Kapitalanlage-Gesellschaft m.b.H. continually analyses companies and countries with the help of internal and external research providers. Together with an overall ESG assessment including an ESG risk assessment, the results of the sustainability research are converted into the so-called Raiffeisen ESG Indicator, which is based on a scale of 0 to 100. The assessment is made in consideration of the company’s respective branch of business.
*) Scope has awarded Raiffeisen Capital Management's fund management an AAA rating for excellent quality and expertise in the management of sustainable fund strategies.The detailed Scope report on the ESG Capability Rating can be found at rcm-international.com/en
*) Sustainable Development Goals (SDGs) are the 17 sustainable development goals set out in the United Nations (UN) Agenda 2030, to which Austria is also committed.