At the beginning of the year, ethos introduced a series of significant changes to the investment process it uses for its equity portfolios, in line with the decision of the extraordinary general meeting of member pension funds held on 30 August 2002. After five years of experience, the Foundation has clearly strengthened the impact of company environmental and social ratings on how its portfolios are put together.
Specifically, the Foundation has considerably expanded the group of companies analysed, rendered the economic sectors neutral in terms of their weight in the reference index, and applied a “best in class” approach. In other words, the procedure for choosing and weighting shares is now systematically and explicitly biased in favour of the most advanced companies in environmental and social terms, while certain risks, especially sector-related risks, are limited.
At the same time, the Foundation has augmented its capacity for environmental and social evaluations, in order to foster active and direct dialogue with companies on those issues. It has taken direct responsibility for the management of non-financial analyses, and has consequently ended the management mandate granted to the bank Sarasin & Cie, to which it expresses its heartfelt thanks for the fruitful cooperation provided since the Foundation’s inception.
In this framework, ethos has commissioned the consultancy services of Centre Info in Fribourg, which works in partnership with the SiRi Group network of 11 consultant firms and their more than 100 analysts throughout the world. Ethos can thus use the non-financial analyses carried out locally for over 500 companies. It is on this basis that the Foundation defines its own environmental and social ratings, which it uses to put together its portfolios.
Each equity chosen remains subject to scrupulous verification of its financial sustainability, a task performed by the bank Lombard Odier Darier Hentsch & Cie. The aim is to ensure that the equity has a sound balance sheet, good prospects for growth and the capacity to generate profit.
This strategic change reflects the ethos Foundation’s determination to enhance its performance, in particular to manage assets with a view to respecting both environmental and social criteria, on the one hand, and financial criteria, on the other.
