Summary of responses to the PRI reporting and assessment tool 2008

Ethos – Swiss Foundation for Sustainable Development

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?1470
Please select currencySwiss franc (CHF)
1a. If 'Other' was selected, please specify the other currency hereNo Answer
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)41
Listed equity (developed market, passive)51
Listed equity (emerging market, active)0
Listed equity (emerging market, passive)0
Fixed income - developed markets8
Fixed income - emerging markets0
Real estate or property0
Private equity0
Hedge fund0
Infrastructure0
Currency0
Commodities0
Cash0
Other (Please specify): 0
5. Please indicate what percentage of your assets are managed internally and what percentage are managed externally (in %):
 
Internal
External
Listed equity (developed market, active)0100
Listed equity (developed market, passive)0100
Listed equity (emerging market, active)00
Listed equity (emerging market, passive)00
Fixed income - developed markets0100
Fixed income - emerging markets00
Real estate or property00
Private equity00
Hedge fund00
Infrastructure00
Currency00
Commodities00
Cash00
Other (Please specify): 00
6. Please provide the following contact details for your main PRI contact:
URL for webpage outlining the specific services and products your organisation has to assist signatories in fulfilling their commitments to the Principleshttp://www.ethosfund.ch/
Principle 1
8. Do you have a statement that makes specific reference to the integration of responsible investment (RI) or environmental, social and governance (ESG) issues within investment decision making and ownership practices?Yes, it is integrated into a broader statement
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?1997
10. Has your statement that makes specific reference to the integration of RI or ESG issues been disclosed publicly?Yes
11. Please indicate how this statement that makes specific reference to the integration of RI or ESG issues can be obtained (a URL would be sufficient):http://www.ethosfund.ch/upload/publication/p146e_020830_Ethos_Charter.pdf http://www.ethosfund.ch/upload/publication/p178e_070101_Ethos_Exclusion_Criteria.pdf
14. For what percentage of your external assets under management are RI/ESG issues integrated into the investment decision-making processes of your external investment managers? (in %)
Listed equity (developed market, active)100
Listed equity (developed market, passive)100
Fixed income - developed markets100
15. To what extent have RI/ESG issues been integrated into the investment decision-making processes of your external investment managers?
Listed equity (developed market, active)To a large extent
Listed equity (developed market, passive)To a large extent
Fixed income - developed marketsTo a large extent
16. What proportion of your assets involve screening out or excluding stocks or sectors based on ethical (rather than long-term financial) criteria? (in %)100
17. Do you have any staff dedicated to RI/ESG issue analysis and/or implementation?
 
Dedicated
Combined full-time equivalents
Investment analyst00.25
Research analyst22.5
RI/ESG issue policy advisor00.25
(proxy) Voting specialist33
Engagement specialist01.5
Portfolio manager11.25
Other (Please specify): SRI Marketing 11.25
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?We are a 100% SRI dedicated institution. As such overall responsibility for RI/ESG rests with the Foundation Board as a whole, plus Board Committees on Asset Management and Corporate Governance, plus Executive Management and one SRI Investment Committee
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?No Answer
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Yes
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)100
22. What forms of RI/ESG training or awareness raising have been invested in, encouraged or provided for internal staff (investment and other)?Informal internal training,Formal internal training,Conferences,Professional programs,Regular briefings on key issues,Other (please specify): 'Editing of discussion papers on SRI issue'
23. Did you support the development of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research in 2007?To a large extent
24. Please indicate how the results of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research development you supported can be obtained if they have been disclosed publicly (a URL would be sufficient):- We have collaborated with our external SRI research provider Centre Info to further develop a tool assessing carbon emissions of our portfolio ("EnvImpact", see www.centreinfo.ch). -We have initiated, together with our partner Pictet & Cie, the first Swiss edition of the Carbon Disclosure Project (CDP), resulting in a summary report. - We have published (for the second year in a row) a comparative study on executive remuneration in 100 Swiss listed companies. - We updated our ealier study looking at the environmental and social reporting practices of 100 Swiss listed companies. For all or our publications see: http://www.ethosfund.ch/e/news-publications/ethos-publications-reports.asp?code=1#
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Sponsored industry events,Advocated RI/ESG coverage in professional training programs (CFA, MBA, etc.),Spoke at or attended conferences,Had dialogue or exchanges with peers,Instructed at universities or colleges
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?Enter text here.
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?We consider as a barrier in this regard the widely held misconception that integration of materially relevant ESG factors into standard investment analysis and decision-making processes can in and of itself already be equated with or labelled as responsible investment. Better commonly accepted definitions of what constitutes responsible investment and what is just good financially relevant analysis and integration are needed.
28. Please add any overall comments and clarifications related to Principle 1 here.Please note re question 15: Our response would be "fully" as we offer only SRI products and RI/ESG issues are integrated into 100% of the investment decision-making processes of our external investment managers. Please note re question 17: our approach involves working with outside ESG research providers and outsourcing ESG investment analysis, research and portfolio management to external partners; thus signifiant financial and human resources are devoted to RI/ESG issue analysis and/or implementation beyond the internal staff resources listed. Please note re question 21: our answer would actually be n/a instead of 100% as all staff are ESG/RI specialists since we offer only SRI investment services and products. We do not have any non-ESG-specialist internal investment staff.
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a large extent
Direct engagement conducted publiclyTo a large extent
Collaborative engagementTo a large extent
Filing shareholder resolutionsPlanning to in 2008
Co-filing shareholder resolutionsPlanning to in 2008
Other (Please specify): providing input into governmental rule-making processTo a moderate extent
30. To what extent did you employ the following approaches in your 2007 active ownership strategy for all asset classes other than listed equity?
(Proxy) votingNot at all
Direct engagement conducted privatelyNot at all
Direct engagement conducted publiclyNot at all
Collaborative engagementNot at all
Other (Please specify):Not at all
31. Do you have a (proxy) voting policy?Yes - disclosed publicly
32. To what extent does your (proxy) voting policy direct action on ESG issues? For each issue, please indicate the extent of direction.
Environmental To a moderate extent
SocialTo a large extent
GovernanceTo a large extent
33. Does your (proxy) voting policy apply to all voting regions (where possible)?Yes
34. Please indicate how your (proxy) voting policy can be obtained (a URL would be sufficient):http://www.ethosfund.ch/upload/publication/p192e_080115_Corporate_Governance_Principles_and_Proxy_Voting_Guidelines.pdf
35. Do you ensure that voting is done in accordance with your (proxy) voting policy?Yes for all
36. What percentage of total votes cast were against management? (in %)27
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental59
Social67
Governance54
38. Do you conduct (proxy) voting on behalf of your clients?Yes - According to our own policy or client-specific policies
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer0
As co-filer0
Planning to be lead filer in 20081
Planning to be co-filer in 20081
40. How were portfolio companies engaged with in 2007? Please check all that apply.Internal staff engaged portfolio companies directly,Internal staff engaged portfolio companies collaboratively
41. Do you systematically bring RI/ESG issue-related engagement opportunities to your clients?To a large extent
43. How many portfolio companies did you engage directly/were engaged on your behalf on ESG issues in 2007?
 
Extensive engagement
Moderate engagement
Basic engagement
Environmental5000
Social12380
Governance10000
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Benefits and compensation,Bribery/corruption,Climate change,Environment,Governance,Health,Health and safety,Human rights,Labour issues,Other (please specify): 'Business principles and codes of conduct, systematic ESG Reporting'
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Client directive,Sector exposure,Focus issue,NGO or union campaign
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?To a large extent
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.Governance practices changed,(Written) commitment to improve a particular ESG issue,Improved disclosure,Collaborative work with a company on a specific ESG issue,Other evidence of improvement in investee company RI/ESG performance due to our activities
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?One of our most significant achievements in 2007 with respect to Principle 2 was the further development of our Ethos Engagement Pool (EEP). Now in its fourth year, this unique vehicle pools the resources and brings together several Swiss institutional investors to systemtically engage Swiss companies on ESG issues. In 2007, membership of the EEP grew from 6 to 13 members and now includes many of the large public pension funds in Switzerland, representing a total of CHF 50 billion in assets. Engagement themes and objectives are selected by the EEP, while engagement activities are coordinated and conducted by Ethos on behalf of its members.
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?Swiss legislation makes it difficult to file ESG resolutions given minimum stock holding requirements for obtaining the right to file. Required registration of shares with foreign companies (UK for example) represents a further barrier for filing or co-filing resolutions outside Switzerland.
50. Please add any overall comments and clarifications related to Principle 2 here.Please note re question 30. Besides listed equity (92%) we only have Fixed Income (8%) holdings. Proxy voting is not applicable to fixed income and active engagement is not commonly practiced in this area either.
Principle 3
51. Have you asked that investee companies (or other investment entities) produce standardized reporting on their RI/ESG issue policies, practices or performance (within annual financial reports or other formats)?To a large extent
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?Integrated with regular financial reports,Standalone corporate social responsibility or sustainability reporting,Global Reporting Initiative (GRI),Carbon Disclosure Project (CDP)
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a large extent
54. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues?
AdoptionTo a large extent
AdherenceTo a large extent
55. Which norms, standards, codes of conduct or international initiatives related to RI/ESG issues have you sought information about from companies, with regard to their adoption of/adherence to?Other (please specify): 'Companies' own elaborated Codes of conduct and business principles'
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?Our most significant achievement in 2007 in relation to Principle 3 was the launch of the first Swiss Carbon Disclosure Project (CDP), together with our partner Pictet, targeting 50 Swiss companies. The Swiss CDP achieved a remarkable participation rate of 78% in its first year and will be extended to include the 100 largest listed Swiss companies in 2008.
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?Enter text response here.
58. Please add any overall comments and clarifications related to Principle 3 here.Enter text response here.
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
External investment managerYes
Investment consultantNot applicable
Proxy votingYes
Engagement overlayNot applicable
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)Yes
Other (Please specify):Not applicable
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)Not applicable
Incentive structure (external investments)No
Contractual relationships with external investment managersYes
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?No
62. To what extent do you encourage your service providers to become PRI signatories?To a small extent
63. To what extent do you encourage your clients to become PRI signatories?To a small extent
64. To what extent do you encourage peer organisations to become PRI signatories?To a small extent
65. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers?To a large extent
66. Does your broker evaluation process include an ESG component or do you have a budget to pay cash for ESG broker research?No Answer
67. Have you revisited any relationships with service providers in light of RI/ESG issue-related capabilities?No
68. Have you engaged in dialogue, lobbying or initiatives pertaining to government policy and/or industry regulations (for example, stock exchanges, accounting standards) related to RI/ESG issues in 2007?To a large extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?In 2007 our input was solicited by parliament and government on the revision of the Swiss Company law (CO/OR); by the Swiss trade association economiesuisse on the revision of its Corporate Governance Code; and by the Swiss Stock Exchange SWX regarding its Corporate Governance directive. In all three instances, we were able to successfully propose several concrete improvements with regard to mandated and accepted Corporate Governance practices, involving for example the frequency of board member elections, transparency of remuneration, or hurdles for submitting shareholder resolutions.
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?Enter text response here.
71. Please add any overall comments and clarifications related to Principle 4 here.Enter text response here.
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?Used clearinghouse
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?Yes
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:Tehnically the PRI Engagement Clearinghouse provides a well-thought out user interface. As it s a member-driven initiative, its success would seem to depend mainly on the quality and relevance of the postings initiated by members signatories.
75. To what extent do you participate in the following RI/ESG issue-related collaborative engagement initiatives and/or industry associations? For those not listed, please use the "other" field:Carbon Disclosure Project,Extractive Industries Transparency Initiative (EITI),Institutional Investors Group on Climate Change (IIGCC),International Corporate Governance Network (ICGN),Investor Network on Climate Risk (INCR),Regional social investment organisation (for example SIF or UKSIF),Social Investment Research Analyst (SIRAN),Other (please specify): 'Ethos Engagement Pool, PRI, Access to Medicine index, Reporters without Borders, Climate Risk Disclosure Initiative'
76. Please indicate the three RI/ESG issue-related collaborative engagement initiatives and/or industry associations that you participated in most extensively and indicate how you did so:
Other (please specify)
Ethos Engagement Pool, initiated in 2004 by Ethos and 2 swiss pension funds. Groups institutional investors to engage Swiss companies systematically on ESG issues. Engagement themes are chosen by pool members and executed by Ethos in the name of the EEP. Membership in EEP was 13 at the end of 2007 and the number of Swiss companies targeted on ESG issues was 100.
Carbon Disclosure ProjectIn 2007, Ethos initiated and co-sponsored with partner Pictet the first Swiss extension of the CDP, including close contact with 50 swiss companies, assessment of responses, publication of results and a launching event. For 2008, the number of Swiss companies covered is planned to increase from 50 to 100.
Institutional Investors Group on Climate Change (IIGCC)Active member. Signatory to investor statement. Participant in policy working group.
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?See also answer to question 48. One of our most significant achievements in 2007 with respect to Principle 5 was the further development of our Ethos Engagement Pool (EEP). Now in its fourth year, this unique vehicle pools the resources and brings together several Swiss institutional investors to systemtically engage Swiss companies on ESG issues. In 2007, membership of the EEP grew from 6 to 13 members and now includes many of the large public pension funds in Switzerland, representing a total of CHF 59 billion in assets. Engagement themes and objectives are selected by the EEP, while engagement activities are coordinated and conducted by Ethos on behalf of its members.
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?Enter text response here.
79. Please add any overall comments and clarifications related to Principle 5 here.Enter text response here.
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries and the public
81. Please indicated how this disclosure of how RI/ESG issues are integrated into your investment processes can be obtained (a URL would be sufficient):Description of our investment processes: http://www.ethosfund.ch/e/products-services/ethos-concept.asp
82. To what extent do you disclose your annual (proxy) voting record?Disclose votes and guidance explaining votes
83. Please indicated how your (proxy) voting record can be obtained (a URL would be sufficient):http://www.ethosfund.ch/e/products-services/voting-positions.asp
84. Do you systematically report (privately and/or publicly) on your RI/ESG issue-related engagement activities, results and progress?To a large extent
85. Please indicate how your reporting on RI/ESG issue-related engagement activities, results and progress can be obtained (if it is publicly available, a URL would be sufficient):Summary of main engagement activities and results as part of our public quarterly reporting (see "Ethos Quarterly"), detailed reporting in confidential reports to members of the Ethos Engagement Pool.
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?To a large extent
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Investment policy,Investment decisions,Engagement,Proxy voting,New employment/positions created,Improved communications on ESG,Provision of new research
90. Have you sought to determine what impact your overall RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behavior or performance?To a large extent
91. Have you sought to determine what impact your RI/ESG issue-related approach has had on the performance of your portfolio?To a large extent
92. Have you sought to determine what impact your RI/ESG issue-related efforts, requests and guidance have had on the consideration of RI/ESG issues by your external service providers excluding external investment managers (for example: research providers, consultants, etc.)?To a large extent
93. Do you report on progress and/or achievements relating to the PRI or RI, and how would you like to publish your response to this assessment?Please automatically publish our responses to the reporting and assessment tool in full on the PRI website,We publicly reported on our PRI or RI achievements in 2007 (outside of publishing part or all of this assessment)
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?In 2007, we celebrated our 10th anniversary by organizing the first "Ethos Day", a one day event dedicated to active shareholdership and socially responsible investment. Participants included investors, civil society, politicians and company representatives. See also pages 4-5 of our Ethos Quarterly 3-07: http://www.ethosfund.ch/upload/publication/p187f_071024_Ethos_Quarterly_e_trimestre_.pdf
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?Enter text response here.
96. Please add any overall comments and clarifications related to Principle 6 here.Please note re question 82: We provide voting recommendations and disclose them publicly via our website on each Swiss GM covered. Additionally, we provide in depth analysis/commentary to clients prior to GMs and then report on recommended/voted positions in detailed quarterly reports. Please note re question 92: all of our external non-investment manager service providers are SRI and Corporate Governance specialists, with whom we have ongoing exchange on ESG issues as well as regular input into methodological developments.
Emerging Markets
97. To what extent have you actively thought about how to integrate RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments?Not at all
98. Please describe your activities with regards to integrating RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments.We do not manage emerging market investments.
99. To what extent do you believe the integration of ESG issues in emerging markets is as relevant as the integration of ESG issues in other markets?To the same extent
100. To what extent did you employ the following approaches in your 2007 active ownership strategy in emerging markets?
(Proxy) votingNot Applicable
Direct engagement conducted privatelyNot Applicable
Direct engagement conducted publiclyNot Applicable
Collaborative engagementNot Applicable
Filing shareholder resolutionsNot Applicable
Co-filing shareholder resolutionsNot Applicable
Other (Please specify): n/a Not Applicable
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?Not Applicable
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.
2.
3.
103. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues in emerging markets?
AdoptionNot Applicable
AdherenceNot Applicable
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?Not at all
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?Not at all
106. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers investing in emerging markets?Not at all
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?Not at all
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?Not at all
109. Have you sought to determine what impact your RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behaviour or performance in emerging markets?Not at all
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.Please note re all questions above with "Not at all" answers: given that we are not active in the emerging market investment field, we would actually answer not applicable, but this option is not given.
111. What is your top PRI-related goal/priority for emerging markets in 2008?No Answer
Closing Comments
112. Why did your organisation join the PRI?The SRI approach of Ethos since its creation in 1997, as defined in its Charter, is closely in line with the objectives of the PRI.
113. Please describe the benefits you have enjoyed as a result of signing the PRI:Access to PRI Engagement Clearinghouse. Further contacts with RI community.
114. To what extent do you believe the PRI has succeeded in changing investor behaviour and/or raising awareness or capacity on RI/ESG issues? Do you have any examples you could share?Enter text here.
115. What are the top three activities the PRI Secretariat could undertake to enhance and encourage further implementation of the PRI by current and prospective signatories?
1.Working to maintain and enhance the credibility of the PRI by ensuring that signatories have a real committment to implement the aspirational principles and make significant and meaningful progress in this regard.
2.Help to clarify the misconception that integration of ESG factors into mainstream investment decision making equals responsible investing. See also our Ethos Discussion Paper No. 2 at URL: http://www.ethosfund.ch/upload/publication/p180e_070702_No_Avoiding_the_Financial_Materiality_Trap_in_SRI.pdf
3.Continue to consider full transparency/auditing of answers provided by PRI signatories under the reporting and assessment exercise as lack of transparancy can significantly undermine the credibility of this initiative.
116. What are your top three PRI-related goals/priorities for 2008?
1.Further increase our collaborative engagement activity in Switzerland through the Ethos Engagement Pool.
2.Analyze the carbon content of our investment portfolio.
3.Improve pooling of voting power with regard to proxy voting at Swiss general meetings through increased coordination with Swiss and foreign investors.
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 4
2Principle 5
3Principle 3
4Principle 2
5Principle 1
Least difficult
6
Principle 6