European SRI Transparency Code Version 3:0

Transcription

1 Edition France European SRI Transparency Code Version 3:0 The European SRI Transparency Code (the Code) focuses on SRI funds distributed publicly in Europe and has been designed to cover a range of assets classes, such as equity and fixed income. All information pertaining to the European SRI Transparency Code can be found at the following website: The code comes with a Guidance Manual for fund managers on how to best use and respond to the Transparency Code. The present version of the Code has been approved by the Board of Eurosif on October 3, TWO KEY MOTIVATIONS UNDERPIN THIS CODE 1. The opportunity for retail SRI funds to clarify their SRI approach to investors and other stakeholders in an easily accessible and comparable format. 2. Proactively strengthen a self-regulation that contributes to the development and promotion of SRI funds by setting up a common framework for transparency best practices. GUIDING PRINCIPLE Signatories to the Code should be open, honest and disclose accurate, adequate and timely information to enable stakeholders, in particular consumers, to understand the ESG 1 policies and practices of the fund. COMMITMENTS FROM SIGNATORIES The order and exact wording of the questions shall be respected; 1 ESG stands for Environmental, Social and Governance. Bank J. Safra Sarasin AG Elisabethenstrasse 62, Postfach, CH-4002 Basel T: +41 (0) , F: +41 (0) ,

2 Responses should be informative and clear, and the resources and methodologies deployed should be described with as much detail and precision as possible; Funds should report data in the currency that they use for other reporting purposes; Reasons preventing the fund from providing all or part of the information to a given question should be clearly stated and, in such a case, signatories should state when they will be able to answer the question; Responses shall be updated at least on an annual basis and should have a precise publication date; Responses to the Code should be easily accessible from the fund s and/or fund manager s website. In any case, signatories should make it clear where to find the information required by the Code; Signatories are solely responsible for the answers to the questions, and should state this in their response. To clarify these commitments, signatories should include at the beginning of the response document the following two statements: Statement of Commitment Sustainable and Responsible Investing is an essential part of the strategic positioning and behaviour of Bank J. Safra Sarasin. We have been involved in SRI since 1989 and welcome the European SRI Transparency Code. This is our ninth statement of commitment and covers the October 1, 2014 to September 30, Our full response to the European SRI Transparency Code can be accessed below and is available in the annual report of the retail funds and on our web site. Compliance with the Transparency Code J. Safra Sarasin is committed to transparency and we believe that we are as transparent as possible given the regulatory and competitive environments that exist in the countries in which we operate. Sarasin Investmentfonds SICAV (Luxembourg umbrella fund) meets the full recommendations of the European SRI Transparency Code CODE CATEGORIES Section 1 Basic Details 2 32

3 The Fund Management Company 1a Provide the name of the fund management company managing the fund(s) to which this code apply. Provide general information about The Fund Management Company managing the fund(s) to which this code applies. (eg. name, address, website ). Sarasin Investmentfonds SICAV, Luxembourg umbrella fund. Bank J. Safra Sarasin Ltd Elisabethenstr. 62 CH-4002 Basel, Switzerland Contact person: Alexander Mülhaupt: Telephone number: b Describe the general approach of the fund management company with regards to how it takes environmental, social and governance (ESG) criteria into consideration. Is the fund management company approach towards ESG criteria aligned or inspired by its corporate social responsibility approach? Yes/No. If yes, insert a link to the company s CSR policy. If not, explain why not. Yes, the fund management s approach is influenced by the bank s CSR policy. We believe that the integration of Environmental, Social and Governance (ESG) factors into financial analysis is the fiduciary duty of all long-term-oriented asset managers and investors. Long-term returns can only be achieved if the livelihood of future generations is guaranteed. However, this requires extensive economic, environmental, social, governance and regulatory changes to which investors can contribute through investing sustainably. These challenges need to be recognised early and embedded into the investment process in order to reduce the related investment risks and capture the potential opportunities. 3 32

4 We identify companies which take advantage of ESG opportunities and avoid those companies which are exposed to unmanaged ESG risks. Such risks often entail concurrent financially material consequences such as the threat of litigation or reputational loss. The opportunities may stem from exposure to megatrends (e.g. natural resource constraints, climate change, demographical changes) as companies with the solutions to face these trends can be expected to increase in value. More efficient use of resources offers other opportunities. The result of our company analysis shows how well a company is positioned to manage its financially material ESG risks and opportunities. As such, the integration of ESG factors into our full analysis adds a deeper understanding of the sustainability and viability of a company, strongly increases the transparency and confidence in our research results and significantly improves the risk/return profile of our client portfolios. Has the fund management company signed the Principles for Responsible Investment? If yes, please insert the link to the answer to the PRI questionnaire. If not, explain why not. Yes, we are founding signatories since signatories current signatories Bank J. Safra Sarasin RI Transparency Code Is the fund Manager a signatory or a member of other international and/or national initiatives supporting SRI practices? Please answer if you deem this information to be useful. Bank J. Safra Sarasin participates in joint initiatives and projects with other institutions such as: Investor Climate Statement Carbon Disclosure Project (CDP) Investors' Statement on Payments Transparency in the Extractive Sectors (EITI) Principles for Responsible Investment (PRI) London Accord Access to Medicine Index 2008 Investor Statement on a Global Agreement on Climate Change 2009 Investor Statement on the Urgent Need for a Global Agreement on Climate Change Social Investment Forum ESG Disclosure Initiative (USA) Forest Footprint Disclosure Project CDP Water Disclosure Project Emerging Market Disclosure Project Sustainable Solar Initiative CDP Carbon Action Initiative Investor Statement on Bangladesh Water Risk for Bonds 4 32

5 Water Risks in Agricultural Supply Chains FNG: Forum Nachhaltige Geldanlagen Swiss Sustainable Finance (SSF) ASRIA Eurosif Energie-Agentur der Wirtschaft (Energy agency of the Swiss Economy) ÖBU-Network Sustainable Finance Geneva Has the fund management company established an ESG engagement policy? If yes, describe the policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If not, explain why not. The aim of the corporate engagement approach undertaken by J. Safra Sarasin s analysts is to prompt companies to adopt more sustainable business models. The analysts consider and discuss ESG-related aspects with top management as an integral part of each of our sustainable investment analyses. Companies that do not consider relevant ESG risks and/or insufficiently manage are not eligible for investment. Has the fund management company established a voting policy? If yes, describe the policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If not, explain why not. Shareholder voting rights are actively exercised. Our voting rights policy is based on recommendations from our partner ISS ( Bank J. Safra Sarasin s sustainability analysts examine the voting right recommendations and may deviate from them in individual, well-founded cases. Describe how the fund management company or the group contributes to the promotion and the development of SRI. Bank J. Safra Sarasin generates knowledge for sustainability themes and passes it on. The Sustainable Investment Research team consists of 15 analysts with sustainability and finance experience. Each year they publish studies on relevant topics and questions. Different stakeholders use these insights to form a basic understanding of the sustainability of individual industries and technologies. These studies also offer other employees, especially client advisors, an important information platform. In 2014 the team published 9 studies, either as in-depth sustainability reports on a sector or as sustainability fact sheets. 5 32

6 Our experts share their knowledge at academic institutions and industry events as speakers and participants. Bank J. Safra Sarasin has joined and signed many national and international initiatives to promote and further develop sustainability in investing. Please refer to the list above. 1c Describe/List your SRI products and the specific resources allocated to your SRI activities. 6 32

7 Name Sarasin New Power Fund P EUR dist LU SICAV Luxembourg Sarasin New Power Fund P EUR acc LU SICAV Luxembourg ISIN Legal form Domicile Inception Description Website Sarasin New Power makes at least twothirds of its investments in shares of forwardlooking and innovative enterprises that are involved in energy as a resource and that take into account environmental and social sustainability issues. Sarasin New Power makes at least twothirds of its investments in shares of forwardlooking and innovative enterprises that are involved in

8 Sarasin OekoSar Equity - Global P EUR dist LU SICAV Luxembourg energy as a resource and that take into account environmental and social sustainability issues. Invests at least two thirds of its net assets in equities of companies that make a significant contribution to environmentally and socially responsible business practices. Investments in selected forward-looking topics such as clean energy, health, water, sustainable consumption and sustainable mobility form the core of these investments

9 Sarasin OekoSar Equity - Global P EUR acc LU SICAV Luxembourg Sarasin Sustainable Portfolio - Balanced (EUR) P EUR dist LU SICAV Luxembourg Invests at least two thirds of its net assets in equities of companies that make a significant contribution to environmentally and socially responsible business practices. Investments in selected forward-looking topics such as clean energy, health, water, sustainable consumption and sustainable mobility form the core of these investments. T The Fund invests in securities issued by countries, companies or organisations that make a positive contribution to environmentally and socially

10 Sarasin Sustainable Bond CHF P CHF dist LU SICAV Luxembourg responsible business practices. Critical activities from a sustainability perspective (e.g. production of nuclear energy or weapons) may be excluded. The Fund invests in debt securities issued by countries, organisations or companies that make a contribution to sustainable business practices. Individual issuers may be excluded on the basis of critical activities (e.g. production of nuclear energy or weapons)

11 Sarasin Sustainable Bond EUR P EUR dist LU SICAV Luxembourg Sarasin Sustainable Bond - EUR Corporates P EUR dist LU (A) SICAV Luxembourg The Fund invests in debt securities issued by countries, organisations or companies that make a contribution to sustainable business practices. Individual issuers may be excluded on the basis of critical activities (e.g. production of nuclear energy or weapons). The Fund invests in debt securities issued by companies that make a contribution to sustainable business practices. Individual issuers may be excluded on the basis of critical activities (e.g. production of

12 nuclear energy or weapons). Sarasin Sustainable Equity - Europe P EUR dist LU SICAV Luxembourg The Fund invests at least two thirds of its net assets in equities of companies that make a contribution to environmentally and socially responsible business practices. These companies are also either domiciled in Europe or chiefly active in Europe. Companies may be excluded on the basis of critical activities from a sustainability perspective (e.g. production of nuclear energy or

13 weapons). Sarasin Sustainable Equity - Global P EUR dist LU SICAV Luxembourg The Fund invests in equities of companies that make a positive contribution to environmentally and socially responsible business practices. Companies may be excluded on the basis of critical activities from a sustainability perspective (e.g. production of nuclear energy or weapons)

14 Sarasin Sustainable Equity - Real Estate Global P EUR acc LU SICAV Luxembourg Sarasin Sustainable Equity - Glob. Emerging Mkts P USD acc LU SICAV Luxembourg The Fund invests in equities and equity securities of companies whose activity is concentrated mainly in the real estate sector and that take environmental and social sustainability aspects into account in their business activities. The Fund invests at least 75% of its net assets in equities of companies domiciled in emerging markets that take environmental and social sustainability aspects into account in their business activities, and in derivative financial

15 instruments (derivatives) on such equities. Sarasin Sustainable Equity - USA P USD acc LU SICAV Luxembourg The Fund invests at least 75% of its net assets in equities of companies that make a contribution to environmentally and socially responsible business practices. These companies are also either domiciled in the US or chiefly active in the US. Companies may be excluded on the basis of critical activities from a sustainability perspective (e.g. production of nuclear energy or

16 weapons). Sarasin Sustainable Water Fund P EUR dist LU SICAV Luxembourg The Fund makes at least two-thirds of its investments in shares of forward-looking and innovative enterprises that are involved in sustainable water practices and that take into account environmental and social sustainability issues

17 Sarasin Sustainable Bond - EUR High Grade P EUR acc LU SICAV Luxembourg The fund invests in high grade variable and fixedincome-bonds whose issuers make a positive contribution to sustainable development. The fund is hedged to EUR. For further fund share classes, please consult the fund prospectus

18 Describe/Detail the resources allocated by the fund management company (organisation, ESG research internal/external, dedicated portfolio management team, ) and indicate where this information is available. Our Sustainable Investment Research Team comprises 15 employees whose task it is to rate companies, institutions and countries from an environmental, social and governance perspective. In order to simplify and improve the efficiency of the information gathering process analysts are drawing on raw data provided by leading provider of sustainability data (MSCI ESG, GMI and Reprisk), for first-stage assessment. Our analysts follow up with a detailed analysis using available company information (annual reports, sustainability reports, direct contact with IR and sustainability departments, on-site inspections), media analysis by means of Reprisk, SRI broker information, information from other specialised institutions / NGOs. We systematically consider negative news flow in our analysis. Our sustainability research has been applied in mandates since The first eco-efficiency fund was launched in 1994 (present name: Sustainable Portfolio Balanced (EUR)). The funds are advised by an independent advisory council, whose principal tasks are the periodic revision of the criteria used in our sustainability analysis as well as the exclusion criteria, and the discussion of the bank s investment strategy. 1d Describe the content, frequency and resources allocated/used by the fund management company to inform investors about the ESG criteria taken into account. The following information on our sustainability funds is available: Quarterly newsletter Product flyers Sustainability profiles on request Monthly fact sheets Annual and semi-annual reports Sustainability papers on request These documents can be obtained through the address given in question 1a or can be downloaded from the Internet at Bank J. Safra Sarasin AG Elisabethenstrasse 62, Postfach, CH-4002 Basel T: +41 (0) , F: +41 (0) ,

19 The SRI Fund(s) 1e Provide the name of the fund(s) to which this Code applies and its (their) main characteristics. Describe the main characteristics of the fund(s): geographical focus, asset class, SRI strategy used (use the classification provided by Eurosif/EFAMA). Name Sarasin New Power Fund P EUR dist Sarasin New Power Fund P EUR acc Sarasin OekoSar Equity - Global P EUR dist Sarasin OekoSar Equity - Global P EUR acc Sarasin Sustainable Equity - Europe P EUR dist Sarasin Sustainable Equity - Global P EUR dist Sarasin Sustainable Equity - Real Estate Global P EUR acc Sarasin Sustainable Equity - Glob. Emerging Mkts P USD acc Sarasin Sustainable Equity - USA P USD acc Sarasin Sustainable Water Fund P EUR dist ISIN Risk class LU LU LU LU LU LU LU LU LU LU Regional SRI Strategy focus Sustainability Themed Investment + exclusion + best in class Global Sustainability Themed Investment + exclusion + best in class Global Sustainability Themed Investment + exclusion + best in class Global Sustainability Themed Investment + exclusion + best in class Global Best in class + exclusion Europe Best in class + exclusion Global Best in class + exclusion Global Best in class + exclusion Global Best in class + exclusion USA Sustainability Themed Investment + exclusion + best in class Global For further fund share classes, please consult the fund prospectus. The funds listed above invest exclusively in equity. 1f What is (are) this (these) fund(s) trying to achieve through taking into account ESG criteria? For instance, financing a specific sector, reducing risks, support better CSR practices, develop new value creation opportunities, other objectives

20 We believe that the integration of Environmental, Social and Governance (ESG) factors into financial analysis is the fiduciary duty of all long-term-oriented asset managers and investors. Long-term returns can only be achieved if the livelihood of future generations is guaranteed. However, this requires extensive economic, environmental, social, governance and regulatory changes to which investors can contribute through investing sustainably. These challenges need to be recognised early and embedded into the investment process in order to reduce the related investment risks and capture the potential opportunities. We identify companies which take advantage of ESG opportunities and avoid those companies which are exposed to unmanaged ESG risks. Such risks often entail concurrent financially material consequences such as the threat of litigation or reputational loss. The opportunities may stem from exposure to megatrends (e.g. natural resource constraints, climate change, demographical changes) as companies with the solutions to face these trends can be expected to increase in value. More efficient use of resources offers other opportunities. The result of our company analysis shows how well a company is positioned to manage its financially material ESG risks and opportunities. As such, the integration of ESG factors into our full analysis adds a deeper understanding of the sustainability and viability of a company, strongly increases the transparency and confidence in our research results and significantly improves the risk/return profile of our client portfolios. If part of the fund(s) assets is invested in unlisted organisations with high social, community or impact investing relevance, please specify. Not applicable. Section 2. Approach to ESG Evaluation of Companies 2a What fundamental principles underlie the ESG research methodology? Describe the principles, standards or norms on which the ESG analysis is based for each of the environmental, social/societal and governance dimensions. Include brief comments about how stakeholders are consulted, as appropriate. The aim of this step is threefold: 20 32

21 1) to analyse a company s ability to manage its ESG risks and opportunities adequately and compare the performance with its peers 2) to create an investable universe of companies by means of the J. Safra Sarasin Sustainability Matrix 3) to generate sustainability insights for the subsequent sustainable investment analysis Please refer to section 2d and 3a. During the research process, we consider information from NGOs and other independent reports. When necessary, analysts will approach the concerned stakeholders directly (for instance NGOs and unions). Companies that are generating more than 5% of consolidated revenues with activities in the following areas are excluded from the investment universe: Nuclear power, armaments, chlorine and agrochemicals, tobacco, genetic engineering used in farming, pornography Also excluded are independent of its share of sales the 30 biggest military contractors globally, as well as the 10 companies with the biggest global sales in GMO seeds. Substantial infringements of ILO core conventions are an additional exclusion criterion. In addition, we follow a best-in-class approach. Please refer to section 2d. 2b What internal and external resources are used to carry out this research? Describe the general information used to carry out the ESG research: internal analysis, ESG rating agencies, other external sources of information. Our sustainability research team comprises 15 employees whose task it is to rate companies, institutions and countries from an environmental, social and governance perspective. In order to simplify and improve the efficiency of the information gathering process analysts are drawing on raw data provided by leading provider of sustainability data (MSCI ESG, GMI and Reprisk), for first-stage assessment. Our analysts follow up with a detailed analysis using available company information (annual reports, sustainability reports, direct contact with IR and sustainability departments, on-site inspections), media analysis by means of Reprisk, SRI broker information, information from other specialised institutions / NGOs. We systematically consider negative news flow in our analysis

22 Gathering information is the basis of every sustainability assessment. J. Safra Sarasin Sustainable Investment uses the following sources, amongst others: generally accessible company information and reports (e.g. annual report. sustainability report) company visits and management contacts information from specialised data providers (e.g. MSCI ESG, GMI for governance, Reprisk for negative press and reputational risks) systematic monitoring of the print media specialised electronic media and the Internet research reports contacts with non-governmental organisations This information is interpreted by the respective analyst on the basis of an extensive catalogue of criteria. The results are converted into a score for each individual criterion and together with a list of sources entered into proprietary database software. The data is evaluated using a numerical procedure. The result is plausibility checked by the analyst and adjusted where necessary. This is followed by a peer group review. 2c Which ESG analysis criteria are used? Indicate what the main criteria for each of the environmental, social/societal and governance dimensions are. Specify if these criteria differ according to sectors, the geographical zones, the type of company, If appropriate, provide an example. The assessment criteria are can be found in the following categories and are weighted differently from industry to industry: for environmental criteria: Climate Change Natural Resource Use Pollution & Waste Environmental Opportunities for social criteria: Human Capital 22 32

23 Product Safety Social Opportunities for governance criteria: Business Ethics Government & Public Policy Corporate Governance 2d What is your ESG analysis and evaluation methodology (how the investment universe is built, rating system, )? Describe the ESG evaluation/rating system and how it is built by explaining how the various ESG criteria are articulated. If appropriate, provide an example. What are the ESG investment criteria of the funds? The sustainability rating of investments is each composed of two constituents. For companies, these are: The sector rating: The criteria in 2C are weighted differently according to the industry ( environmental criteria are less critical in banking than in metals and mining). The Sustainable Investment Team and the Sustainable Investments Board evaluate the criteria and their weighting annually. The company rating: Here the effective performance of each company relative to its industry is analysed. 2e How frequently is the ESG evaluation reviewed? Please briefly explain the methodology update process and who is involved. If appropriate, explain if the methodology has changed in the past 12 months and the nature of the key changes. The research process is reviewed on a yearly basis and adjusted if necessary. Section 3. Fund Management Process 3a How do you take into account ESG criteria when defining the universe of eligible investments? 23 32

24 If appropriate, describe the eligibility threshold and the resulting level of selectivity. How are the results of ESG research integrated into the investment process, including selection and approval of companies/issuers for investment? How are the results of ESG research integrated into the investment process, including selection and approval of companies/issuers for investment? The ESG criteria are described in section 2c. The investment process is as follows: 1) Industry Analysis Our analysts identify the key ESG sector issues and assign them a weighting. Certain ESG aspects, especially those concerning Governance, such as Board and Pay, are the same for all industries. Other criteria may be different depending on the industry or are weighted differently. At the same time, we derive general industry insights which will be used in the company analysis. 2) Sustainability Analysis We analyse whether a company is sufficiently positioned to manage its relevant ESG risks and opportunities. Its actual ESG performance is then compared to its peers in its industry. The results of the sustainability research flow into the investment process in two ways: Negative: Companies that are generating more than 5% of consolidated revenues with activities in the following areas are excluded from the investment universe: Nuclear power, armaments, chlorine and agrochemicals, tobacco, genetic engineering used in farming, pornography. Also excluded are independent of its share of sales the 30 biggest military contractors globally, as well as the 10 companies with the biggest global sales in GMO seeds. Substantial infringements of ILO core conventions are an additional exclusion criterion. Positive: Companies are plotted on the Sarasin Sustainability-Matrix on the basis of the research findings using the criteria specified in point 2c. The fund managers may only invest in companies 24 32

25 (and countries as well as institutions in the case of bonds) if they are positioned in the blue shaded area of the matrix shown below. Figure 1 Sarasin Sustainability-Matrix for Classic Funds and the Multi-Theme Fund The thematic funds Sarasin OekoSar Equity Global, Sarasin New Power Fund and Sarasin Sustainable Water Fund are investing in innovative, forward-looking companies with a long-term commitment to sustainability that is higher than the national and international norm and which also make a positive contribution to environmentally and socially responsible development. The core of each portfolio is built around investments in selected future-oriented themes, industries and activities. The investment themes of the Sarasin OekoSar Equity Global are currently energy & climate, health, water, consumption, mobility, smart housing, financial services and knowledge society. The Sarasin New Power fund pays special attention to companies active in renewable energies such as wind, water, biomass, solar and geothermal power, or in improving energy efficiency. Sarasin New Power Fund also invests in companies that offer innovative, environmentally friendly and socially responsible solutions using traditional sources of energy. The Sarasin Sustainable Water Fund covers the entire value chain of the water industry, which includes the following sub-segments: supply and disposal, technologies and services (including 25 32

26 R&D, planning and consulting, plant engineering and construction, pumps, pipes, filters, installation technology, water-saving devices, consumption metering, chemicals and analytics), as well as products and services that enable efficient water use. For the single theme funds (Sarasin New Power Fund and Sarasin Sustainable Water Fund) the Sarasin Sustainability-Matrix is slightly modified due to the fact that the focus on companies with a high exposure to a single sustainability theme is already a pre-selection. Only companies that already have a close link with the fund s sustainability theme are eligible. The fund management can therefore invest in all companies, which are positioned in the shaded area of the Matrix below. Compared to the diagram above, which illustrates the investment universe for the classic sustainability approach (Fig.1), no distinction is made between industries (Fig.2). This leads to a slightly larger investment universe without compromising the sustainability approach. Figure 2 Sarasin Sustainability-Matrix for Single Theme Funds For the Sarasin Sustainable Equity Global Emerging Markets the Sarasin Sustainability Matrix is equally adjusted slightly, to expand the selection of eligible titles in a meaningful way (Fig.3). The fund management can thus invest in all titles positioned in the blue shaded area. Figure 3 Sarasin Sustainability-Matrix for the Emerging Market Fund 26 32

27 3) Sustainable investment analysis The integration of financially material ESG factors into our fundamental analysis creates more transparency and confidence within our investment process. In order to determine a Fair Value for each share, we consider, in addition to ESG aspects, fundamental criteria such as a company s sales growth, operational profit margin, tax rate, net investments, and cost of equity, debt and the capital structure. The Fair Value makes it possible to identify under- and overvalued companies for investment. 4) Selection process Bank J. Safra Sarasin s Investment Committee is responsible for defining the investment policy. This committee meets for plenary sessions once a month, and once a week for the market update and asset management positioning meetings. It may also hold additional ad hoc meetings to respond to particular events. The investment committees of Asset Management (AM) AM Equities, AM Balanced and AM Bonds/Absolute Return adopt the key parameters produced for the entire bank by the Investment Committee within the specific investment strategy in question. For sustainably managed portfolios, proposals and recommendations which differ from the general parameters due to the consideration of sustainability criteria may be discussed. The respective meetings of the three investment committees set down the detailed decisions on asset allocation in the model portfolios, discuss industries, regions, currencies and individual stocks and determine their weightings

28 The members of the three investment committees comprise the portfolio managers of the corresponding teams. Representatives of client divisions and Asset Management units are admitted as observers. The Head of Asset Management and the Head of the Sustainable Investments Research Team take part in the meetings and/or are informed of the decisions taken. There is an additional committee for the multi-theme fund OekoSar Equity Global, which determines the prioritisation of the sustainability themes and discusses new trends and developments within the individual thematic blocks. Existing and new themes and their target weightings are discussed and determined within this committee. Members of the thematic committee include the portfolio managers of the relevant funds (OekoSar Equity Global, New Power, Sustainable Water Fund), the Head of Sustainable Investment Research, the designated thematic analysts and the Head of Equity Research. Representatives of client divisions and Asset Management units are admitted as observers. 3b How do you take ESG criteria into account into the portfolio construction? Describe how you link ESG selection with the financial analysis or with portfolio management. More precisely, describe how the results of the analysis of each of the dimensions (E, S and G) are integrated into the investment / divestment process. If applicable, state where you provide information on divestments occurred in the past year on the basis of ESG criteria? If appropriate, explain how potential ESG weightings are defined and describe your treatment of companies that are not subjected to an ESG analysis. As shown above in section 3a fund managers may only select securities that are rated in the greyshaded areas of the matrices. J. Safra Sarasin s policy with regard to securities which due to a sustainability re-rating are excluded from the investment universe is to sell them within a maximum of one month, while taking into account market conditions and preserving the interests of the investor. In the last 12 months, no companies were sold because of ESG criteria. 3c Does (do) the fund(s) have a specific ESG engagement policy? Please explain what you mean by engagement. Describe how you select the companies/themes for engagement activities and the impact on the portfolio management of the fund(s). Who undertakes engagement on behalf of the fund (internal and/or service providers)? The aim of the corporate engagement approach undertaken by J. Safra Sarasin s analysts is to prompt companies to adopt more sustainable business models. The analysts consider and discuss 28 32

29 ESG-related aspects with top management as an integral part of each of our sustainable investment analyses. Companies that do not consider relevant ESG risks and/or insufficiently manage are not eligible for investment. 3d Does (do) the fund(s) have a specific voting policy integrating ESG criteria? Shareholder voting rights are actively exercised. Our voting policy is based on recommendations from our partner ISS ( J. Safra Sarasin s analysts examine the voting recommendations and may deviate from them in well-researched cases with a focus on environmental, social and governance issues. 3e Does (do) the fund(s) engage in securities lending activities? No 3f Does (do) the fund(s) use derivative instruments? Only for hedging purposes and when direct investments may prove difficult. According to the prospectus, up to 10% of the fund assets may be invested in derivatives, but this share has never been reached. 3g Is a share of the fund(s) invested in unlisted entities pursuing strong social goals? No Section 4. Controls and ESG Reporting 4a What internal/external control procedures are in place to ensure the compliance of the portfolio with the ESG rules defined in section 3 of this Code? State who is carrying out the controls, their frequency and within which timeframe the fund(s) have to comply should a breach be detected. An external Advisory Board for sustainable investments provides advice for the further development of our sustainable investment products and, when necessary, our corporate 29 32

30 sustainability. The permanent members are Dr. Wolfgang Engshuber und Dr. Andreas G. F. Hoepner, both globally renowned leaders in the field of sustainable investment, who will be joined by other external experts or organisations, depending on the thematic focus. A department, organisationally separate from Asset Management, examines whether the invested securities carry an appropriate rating, using the database provided by the Sustainable Investment Team. 4b Please list all public media and documents used to inform investors about the SRI approach to the fund, and include URLs. This should include a link to the detailed, no more than 6 months old, list of holdings of the fund(s). Prospectuses, annual and semi-annual reports, addendums, KIID (Key Investor Document), fund fact sheets can be found on our product website: Fundfinder Publications Dedicated SRI Web page(s) at company / fund level (if applicable) tm Engagement/voting policy/votes (if applicable) please refer to page 82 Link to Web page of ESG Analysis provider(s) (if applicable) URL to the research findings that are available to investors (if appropriate) On request. Detailed fund holdings (no more than 6 months old) Please choose the relevant fund name Publications Annual report/semi-annual report CSR Policy of the Company l (if applicable) Please refer to page 82. Additional If applicable, specify what the amount of donations and the percentage of management fees that the fund gave to charities in the last year

31 In 2013 J. Safra Sarasin made donations in support of numerous charitable organisations from the social, environmental, cultural, educational and sporting areas. In doing so, a particular focus was placed on humanitarian projects. In Switzerland, for example, the proceeds of an employee initiative were donated to the foundation Denk an mich, helping to support the project playgrounds for all, a commitment of the foundation to realise play areas suitable for disabled children all over Switzerland. Likewise the charity golf tournament We Help Cup of the association WE HELP was supported in Germany, which works to help children in need. In Dubai, calendar images painted by the kids of the Al Noor Training Centre for Children with special needs were purchased. The contribution will be used by the centre to provide better facilities for the children. COMMITMENT FROM EUROSIF AND THE NATIONAL SUSTAINABLE INVESTMENT FORUMS Eurosif is responsible for maintaining and publicising the Transparency Code. Eurosif promotes received responses to the Code on its website. Eurosif maintains a transparent logo that is awarded to those funds complying with the Code and whose answers have been sent to Eurosif. Complying funds can use this logo in their marketing collateral, in accordance with the Logo Specifi cations Manual (see. and provided the Code is up to date. Eurosif commits to reviewing the Code. The process for reviewing the Code will be open and inclusive.european SRI Transparency Code ABOUT EUROSIF The European Sustainable Investment Forum (Eurosif) is the leading European membership association whose mission is to develop sustainability through European financial markets. Eurosif works as a non-for-profit partnership of the national Europe-based national Sustainable Investment Forums (SIFs) with the support and involvement of Member Affiliates. Eurosif Member Affi liates include a range of organisations covering the value chain of the sustainable investment industry, from institutional investors, asset managers to fi nancial services providers, ESG analysis fi rms, academic institutes and NGOs. Eurosif speaks authoritatively and broadly on SRI (sustainable and responsible investment) issues. The main activities of Eurosif are public policy, research and creating platforms for nurturing sustainable investing best practices. For more details, please see National sustainable investment forums in Europe to date include: 31 32

32 Belsif*,Belgium Dansif, Denmark Finsif, Finland Forum Nachaltige Geldanlagen* (FNG) e.v., Austria, Germany and Switzerland Forum per la Finanza Sostenibile*(FFS), Italy Forum pour l Investissement Responsable* (FIR), France Norsif, Norway Spainsif*, Spain Swesif*, Sweden UK Sustainable Investment and Finance Association* (UKSIF), UK Vereniging van Beleggers voor Duurzame Ontwikkeling* (VBDO), the Netherlands *Member of Eurosif For further information on Eurosif or more details on the European SRI Transparency Code, please look at our website, and contact Eurosif at +32 (0) or by at contact@eurosif.org. Eurosif A.I.S.B.L. 331, rue du Progrès, 1030 Brussels, Belgium Tel. : +32 (0) Disclaimer Eurosif does not accept responsibility or legal liability for errors, incomplete or misleading information provided by signatories in their responses to the European SRI Transparency Code. Eurosif does not provide any financial advice nor endorse any specific funds, organizations or individuals. Important legal information The information contained in this publication does not constitute an offer or a solicitation to buy units of the funds. All details are provided for marketing and information purposes only and should not be misinterpreted as investment advice. Copies of the current prospectus, the simplified prospectus and the most recent annual and semi-annual reports for Sarasin Investmentfonds SICAV, an umbrella funds under the law of Luxembourg, are available free of charge from the paying agent and the fund s representative in France (BNP Paribas Securities Services S.A., 3 rue d Antin, F Paris). The reliability, accuracy or completeness of the information in this publication is not guaranteed. Unless explicitly stated otherwise, all figures are unchecked. Persons domiciled in the USA or US nationals are not allowed to own units of the mentioned funds, and it is illegal to publicly offer issue or sell these investment fund units to said persons. This publication is only intended for investors based in France