What is Fair - how do we define sustainability?
This part is the responsibility of ACATIS Fair Value Investment AG. It selects companies according to sustainable and ethical aspects, the ACATIS Fair Value sustainability criteria. It supplies the investable stock universe that it defines together with Hanover-based rating firm Imug/ Vigeo-EIRIS, and which it approves through an independent sustainability advisory board (the “conscience” for the funds).
The criteria were developed together with our clients. They are continuously monitored and reviewed. In summary: Those companies that meet and comply with high standards regarding business, social, ethical and ecological criteria are selected. In more detail: We filter and assess based on a points system.
- First, companies that breach our exclusion criteria are filtered out over several steps: Companies that e.g. breach the criteria for child labour (also in their supply chains), or companies involved in strategic armaments and weapons, embryonic stem cell research, green genetic engineering, corruption and financial fraud or companies that generate oil from tar sands and shale are removed. The criterion “companies excluded from the Norwegian sovereign wealth fund” has also been added.
- Also excluded are companies that generate more than 5% of their sales revenues from e.g. alcohol, nuclear energy, gambling, pornography, armaments, tobacco and weapons.
- Only companies with a positive ESG point score of more than 15 points for environment, social issues and governance remain in the sustainability process.
- Especially positive companies that generate their sales revenues with products or services that contribute to achieving the sustainable development goals (SDGs) are subsequently filtered out.
- The sustainability rating for countries, supranational organisations or local entities is also very refined. These issuers are assessed on the basis of the following criteria (among others): Possession of nuclear weapons, death penalty, share of nuclear energy over 15%. Countries that are deemed non-free states according to Freedom House, that have not ratified the UN biodiversity convention, that are rated low in the corruption perception index or that breach the Non-Proliferation Treaty are also excluded.
Corruption is spreading in more and more countries. Our filter excludes countries affected by corruption. At this time, 94 countries are subjected to the country rating, and only 31 comply with our ethics criteria.
The result - approximately 2,700 companies, 500 bond issuers and 31 countries that meet our ACATIS Fair Value criteria.
First we run the “Fair” evaluation, and only then the Value evaluation according to our value investing criteria.
In our new brochure "ACATIS FAIR VALUE FONDS - Sustainability and Value Investing" you can find out more about the sustainability criteria, our sustainability and investment process and our three sustainability funds.