Sustainability Strategies
Sustainability strategies as defined by Partners for Sustainability to qualify the approach used by the funds it analyzes and rates.

Exclusion
Funds that do not invest in companies (or entire sectors) whose practices or products are considered controversial or unsustainable or in breach of international norms and conventions (norms-based screening).

Sustainability leaders

Funds that primarily invest in companies identified as having a superior sustainable performance. Consideration of ESG factors into the traditional financial analysis or best-in-class portfolio constructions are the most common processes used.

Thematic

Funds that primarily invest in companies whose products and services deliver environmental or social solutions and benefits. The most common themes are: water, renewable energy, waste, climate change, resources (agriculture, timber).

Thematic: Healthy Living / Lifestyle
Funds that primarily invest in companies active in health care, medical research, education, access to basic needs, healthy/sustainable food, clean transportation

Thematic: New Energy / Climate

Funds that primarily invest in companies active in renewable energy (technology, development, production), alternative fuels, energy efficiency, clean infrastructure, GHG emissions reduction technologies.

Thematic: Water
Funds that primarily invest in companies active in the sustainable deployment of the natural resource water; it covers products and services such as water treatment, water utilities, technology and environmental water-related services.Some funds also take social consideration into account, for example access to clean water for the under-privileged.

Thematic: Multi-thematic

Multi-thematic funds do not focus on companies from a single environmental or social theme, but select companies from any sector that contribute to a sustainable development through their products and services.

Non-financial criteria

Any criterion which is not usually considered in the traditional financial analysis of companies or in the traditional investment decision-making process. Environmental, Social and Governance factors are the most common types of non-financial criteria.

Environmental, Social and Governance factors (ESG)
Under Environmental factors are usually grouped issues like: environmental policy and management system, pollution control, waste reduction, resource use, climate change, product life cycle.
Under Social factors are usually grouped issues like: bribery and corruption, business ethics and integrity, customer relations and product quality, supply chain, community relations, philanthropy, Workplace standards, Health & safety, diversity, child labour, human rights.
Under Governance factors are usually grouped issues like: board of directors composition and independence, board and top executives remuneration, accountability.

Median fund score
In our sustainability fund research, we frequently use the term “median fund score”. We always use a scoring system from 5 (indicating the best) to 1 (indicating the worst). The median fund score is the score that separates the higher half of the scores of all funds from the lower half.

Environmental Exclusion Criteria: Companies

Airline industry Airline industry includes companies that provide air transport services for traveling passengers and freight.
Automobile industry Automobile industry includes companies involved in the design, development, manufacturing, marketing, and sale of motor vehicles.
Chloride chemicals Chloride chemicals means products or substances based on a compound of chlorine with another element or group.
Coal mining Coal mining means the extraction of coal from the earth.
First generation biofuels First generation biofuels refer to the fuels that have been derived from food crops and that are therefore no longer available for human consumption.
Fossil power generation Fossil power generation means the production of electrical power by burning fossil fuel such as coal, natural gas or oil.
Fossil power trading Trading of electric power generated in power plants burning fossil fuel such as coal, natural gas or oil.
Green GMO Green GMO means the research, development, production and use of genetically modified organisms for agriculture purposes.
Hydraulic fracturing Hydraulic fracturing is the process of drilling and injecting fluid into the ground at a high pressure in order to fracture shale rocks to release natural gas or oil.
Intensive animal husbandry Intensive animal husbandry as defined in the categories “Solely livestock production systems (L)” and “Landless livestock production systems (LL)” of the Food and Agricultural Organization of the United Nations (FAO).
Intensive farming Intensive farming is an agricultural intensification and mechanization system that aims to maximize yields from available land through various means, including heavy use of pesticides and chemical fertilizers.
Intensive fishing Intensive fishing means fishing in a non-sustainable way including but not limited to overfishing beyond reasonable recovery limits, excessive or damaging levels of bycatch, fishing over vulnerable habitats, or discarding the lower quality portion of the target catch.
Intensive forestry Intensive forestry means the extraction of timber in such a way that the biodiversity of forests is not maintained.
Mining (general) Mining (general) means the extraction of valuable minerals or other geological materials from the earth including metals, coal, oil shale, gemstones, limestone, dimension stone, rock salt, potash, gravel, and clay.
Natural gas drilling Natural gas drilling means the extraction of natural gas from the earth.
Nuclear core components Nuclear core components means companies active in the research, development and manufacturing of components that are solely used in nuclear power plants.
Nuclear power generation Nuclear power generation is the use of nuclear reactions that release nuclear energy to generate heat, with the intention to produce electricity.
Oil drilling Oil drilling is the extraction of oil from the earth.
Oil sand processing Oil sand processing is the exploration or production of oil from loose sands or partially consolidated sandstone containing a naturally occurring mixture of sand, clay, and water, saturated with a dense and extremely viscous form of petroleum referred to as bitumen.
Ozone depleting substances Ozone depleting substances (ODCs) are very stable, nontoxic and environmentally safe in the lower atmosphere that float up into the upper atmosphere and break up into molecules that have a destructive effect on the ozone layer.
Palm oil production Palm oil production is the production of edible vegetable oil derived from the fruit of the oil palm.
Persistent organic pollutants Persistent Organic Pollutants (POPs) are chemical substances that persist in the environment, accumulate through the food chain, and pose a risk of causing adverse effects to human health and the environment.
Pesticides Pesticides are a class of biocide meant for attracting, seducing, and then destroying, or mitigating any pest, most widely used as plant protection products, which in general protect plants from damaging influences such as weeds, plant diseases or insect.
Petroleum industry Petroleum industry includes companies involved in the global processes of exploration, extraction, refining, transporting, and marketing petroleum products.
Uranium mining Uranium mining means the extraction of uranium from the earth.


Social Exclusion Criteria: Companies

Alcohol, production Alcohol production means the production of alcoholic beverages including wine, beer, and spirits.
Alcohol, sale Alcohol sale means the sale of alcoholic beverages including wine, beer, and spirits.
Animal testing (cosmetics) Animal testing (cosmetics) means the use of animals in experiments for the purpose of research, development or manufacturing of cosmetic products.
Apparel industry Apparel companies includes companies manufacturing clothing.
Armament, production (including specific components, excluding dual use products) Armament, production, means any device used in order to inflict damage or harm to living beings, structures, or systems used by the armed forces of sovereign countries.
Asbestos mining & fibers Asbestos mining & fibers means the extraction of asbestos from the earth.
Banking Banking includes companies in the financial sector.
Cluster bombs, production (including specific components, excluding dual use products) Cluster bombs, production, refers to bombs that eject explosive bomblets that are designed to kill personnel and destroy vehicles as defined in the Convention on Cluster Munitions.
Conflict minerals Conflict minerals are minerals extracted in a conflict zone and sold to perpetuate the fighting and typically includes minerals such as cassiterite, wolframite, coltan, diamonds, and gold ore.
Contraceptives Contraceptives are devices or drugs used to prevent pregnancy.
Depleted uranium ammunition, production (including specific components, excluding dual use products) Depleted uranium ammunition, production, are ammunition for firearms consisting of uranium with a lower content of the fissile isotope U-235 than natural uranium.
Embryonic stem cell research Embryonic stem cell research means the use of human embryos for research on embryonic stem cells.
Fur farms Fur farming is the practice of breeding or raising certain types of animals for their fur.
Gambling Provision of products and services with the sole intent providing gambling services including the management of casinos, provision of online gambling services, and the manufacturing and sales of gaming machines.
Handguns/firearms, production (including specific components, excluding dual use products) Handguns/firearms refers to portable guns.
Land mines, production (including specific components, excluding dual use products) Land mines, production, refers to explosive devices concealed under or on the ground and designed to destroy or disable enemy targets, ranging from combatants to vehicles and tanks, as they pass over or near it, as defined in the Anti-Personnel Mine Ban Convention (Ottawa Treaty).
Military goods, production (including specific components, excluding dual use products) Military goods, production, refers to devices – deadly or non-deadly – used by armed forces.
Non-conventional weapons, production (including specific components, excluding dual use products) Non-conventional weapons, production, refers to nuclear, radiological, chemical, biological or other weapon that can kill and bring significant harm to a large number of humans or cause great damage to human-made structures, natural structures, or the biosphere, as defined in the Treaty on the Non-Proliferation of Nuclear Weapons, Biological Weapons Convention, and the Chemical Weapons Convention.
Pornography, production & sales Pornography means the production and distribution of adult entertainment material through any media such as TV, the internet, print media, and others.
Production of illegal drugs Production of illegal drugs means the production and distribution of drugs that are illegal to possess.
Tobacco, production Tobacco production means tobacco plants growing and manufacturing of tobacco products.
Tobacco, sale Tobacco sale includes means the sale of tobacco and tobacco products.


Norms-based Exclusion Criteria: Companies

Abortion Abortion means research, development and manufacturing products or providing services with the intent of ending a pregnancy by removing a fetus or embryo from the womb before it can survive on its own.
Biopiracy Biopiracy means using the knowledge of nature, originating with indigenous people by others to profit, without permission from and with little or no compensation or recognition to the indigenous people themselves.
Breach of the UN Global Compact Breaches of Global Compact includes companies the regularly and in an obvious way perform business in breach of the ten principles laid out by the United Nations Global Compact.
Child labor Child Labor: Violations of the Conventions 138 and 182 of the International Labour Organization concerning the Minimum Age for Admission to Employment and the Prohibition and Immediate Action for the Elimination of the Worst Forms of Child Labour.
Cooperation with regimes Breaches of Global Compact includes companies the regularly and in an obvious way perform business in breach of the ten principles laid out by the United Nations Global Compact.
Corruption Corruption is the abuse of bestowed power or position to acquire a personal benefit and includes activities such as bribery, embezzlement and fraud.
Discrimination Discrimination is treatment or making a distinction in favor of or against, a person based on the group, class, gender, religion, or category to which that person is perceived to belong to rather than on individual merit.
Equal rights in labor Equal rights in labor: Violations of the Conventions 100 and 111 of the International Labour Organization concerning Equal Remuneration and Discrimination in Respect of Employment and Occupation.
Forced Labor Forced Labor: Violations of Conventions 29 and 105 of the International Labour Organization concerning Forced or Compulsory Labour and the Abolition of Forced Labour.
Human rights Violations of Human Rights as defined in the Universal Declaration of Human Rights of the United Nations
Irresponsible marketing Irresponsible marketing refers to the presentation of products in a misleading way or with insufficient information about the characteristics of the products that can have a harmful effect on human health or the environment.
Labor rights (general) Labor rights are a group of legal rights and claimed human rights having to do with labor relations between workers and their employers, usually obtained under labor and employment law.
Non-responsive to engagement Non-responsive to engagement means the lack of reaction to the engagement efforts of a sustainability fund manager in a satisfactory manner.
Non-sign. of the Glob. Compact Non-signatory of Global Compact includes companies that have not signed the United Nations Global Compact.
Trade union rights (freedom of association) Trade union rights: Violations of the Conventions 87 and 98 of the International Labour Organization concerning the Freedom of Association and the Right to Organise and Collective Bargaining.
Violation of local laws Violation of local laws refers to the repetitive and severe breaches of local laws.


Exclusion Criteria: Countries

Biological/chemical armament Biological/chemical armament means weapons of mass destruction with the exception of nuclear weapons.
Child labor controversies Non-ratification of the conventions 138 and 182 of the International Labour Organization (concerning the ban of child labour)
Death penalty (enforced) Death penalty (enforced) means punishment by death is permitted by law and enforced.
Death penalty (permitted) Death penalty (permitted) means punishment by death is permitted by law.
Dictatorial leadership Dictatorial leadership includes countries with a government where political authority is monopolized by a person or political entity, and exercised through various mechanisms to ensure the entity’s power remains strong
Expansive nuclear power strategy Expansive nuclear power strategy means the policy of the government of a country to increase the amount of electrical power from nuclear power plants within its territory.
Freedom of association Freedom of association is the right to join or leave groups of a person’s own choosing, and for the group to take collective action to pursue the interests of member
Freedom of speech and press Freedom of speech is the right to communicate one’s opinions and ideas without fear of government retaliation or censorship. Freedom of the press is the freedom of communication and expression through mediums including various electronic media and published materials.
High level of corruption (Corruption Perceptions Index) Insufficient rank or score in the “Corruption Perceptions Index” of Transparency International (please provide the number of countries excluded in relation to total number of countries cover by the index)
High level of corruption (general) High level of corruption refers to countries that take insufficient measures against corruption
Human rights violations Human rights violations means countries that in a systematic way do not enforce or protect the rights laid out in the Universal Declaration of Human Rights adopted by the United Nations General Assembly.
Insufficient climate protection measures based on the Climate Change Performance Index. Countries whose performance is “poor” or “very poor” in accordance with the “Climate Change Performance Index” of Germanwatch and Climate Action Network Europe
Insufficient measures against money laundering (general) Refers to countries that take insufficient measures against money laundering
Insufficient measures against money laundering (Financial Secrecy Index) Insufficient rank or score in the “Financial Secrecy Index” of the Tax Justice Network (please provide the number of countries excluded in relation to total number of countries cover by the index)
Labor Rights Violations (general) Labor rights are a group of legal rights and claimed human rights having to do with labor relations between workers and their employers, usually obtained under labor and employment law.
Labor rights violations (the conventions 29, 87, 98, 100, 105 and 111 of the ILO) Non-ratification of the conventions 29, 87, 98, 100, 105 and 111 of the International Labour Convention (concerning trade union rights, abolition of forced labor, equal rights)
Legalized voluntary euthanasia Legalized voluntary euthanasia means is the practice permitted by law of ending a life in a painless manner.
Military budget / Total GDP Military budget / Total GDP is the ratio of financial resources dedicated by a country to raising and maintaining an armed forces or other methods essential for defense purposes in relation to the gross domestic product.
Military presence in other countries Military presence in other countries means the deployment of armed forces on the territory of another country without the approval of the United Nations.
Non-ratification of Non-Proliferation Treaty Non-ratification of the Treaty on the Non-Proliferation of Nuclear Weapons
Non-ratification of the Anti-Personnel Mine Ban Convention (Ottawa Treaty) Non-ratification of the Anti-Personnel Mine Ban Convention (Ottawa Treaty)
Non-ratification of the Arms Trade Treaty (ATT) Non-ratification of the Arms Trade Treaty that regulates the international trade in conventional weapons.
Non-ratification of the Biodiversity Convention Non-ratification of the United Nations’ Convention on Biological Diversity
Non-ratification of the Biological Weapons Convention Non-ratification of the Convention on the Prohibition of the Development, Production and Stockpiling of Bacteriological (Biological) and Toxin Weapons and on their Destruction
Non-ratification of the Cartagena Protocol Non-ratification of the United Nations’ Cartagena Protocol on Biosafety to the Convention on Biological Diversity
Non-ratification of the Chemical Weapons Convention Non-ratification of the Convention on the Prohibition of the Development, Production, Stockpiling and Use of Chemical Weapons and on their Destruction
Non-ratification of the Convention on Certain Conventional Weapons Non-ratification of the Convention on Prohibitions or Restrictions on the Use of Certain Conventional Weapons Which May Be Deemed to Be Excessively Injurious or to Have Indiscriminate Effects
Non-ratification of the Convention on Cluster Munitions Non-ratification of the Convention on Cluster Munitions (Oslo Convention)
Non-ratification of the Kyoto protocol Non-ratification of the Kyoto protocol means that the government of a country has not ratified the Kyoto Protocol to the United Nations Framework Convention on Climate Change.
Non-ratification of the Paris agreement Non-ratification of the Paris agreement means that the government of a country has not ratified the Paris Agreement under the United Nations Framework Convention on Climate Change.
Non-ratification of the Stockholm Convention Non-ratification of the United Nations’ Stockholm Convention on Persistent Organic Pollutants
Nuclear Armament Nuclear armament means the possession of nuclear weapons by the government of a country.
Nuclear power / total power generation (including threshold) Nuclear power / total power generation means the share of electrical power generated by nuclear power plants in relations to the total electrical power generated in a country.
Subject to United Nations sanctions Subject to UN sanctions includes countries which are subject to United Nations sanctions with the purpose of forcing cooperation with international law, containing a threat to peace, or condemning or actions of a specific action or policy of a country.
Unfree countries based on Freedom House Countries which are classified as “not free” in accordance with the “Freedom in the World” report of Freedom House

Other terms

Asset Allocation Asset allocation indicates the type of security an investment funds invests the majority of ist assets in. The most common security types are equity, bond, balanced or money market.
Distribution Distribution funds pay dividends to investors on a regular basis, while accumulation funds reinvest dividens.
Domicile Domicile refers to the country an investment fund is docmiciled in. The domicile of a fund does not necessarily coincide with the domicile of the fund manager or its parent company.
Fund Manager Fund manager refers to the person, group or company responsible for implementing a fund’s investment strategy and managing its portfolio trading activities.
Fund Size Fund size indicates the total assets invested in a fund.
Inception Date Inception date indicates that date an investment fund has been launched. Different share classes of the same fund can have different inception dates.
ISIN An International Securities Identification Number (ISIN) uniquely identifies an investment fund or other securities. Different shares classes of a fund have different ISIN’s.
Management Fee A management fee is a periodic payment that is paid by an investor to the fund manager for investment and portfolio management services.
Minimum Investment Mutual funds may require a minimum initial investment. Different share classes of the same fund may have different minimum investments. Share classes targeted at professional investors have higher minimum investments in general.
Promotor Promotor is a company that raises money from investors for an investment activity. Fund promotors are not always the entity that is in charge of the actual fund managment.
Reference Index A reference index is a standard against which the performance of an investment fund or another security can be measured. Not all investment funds measure their performance against a reference index.
Regional Focus Regional focus indicates the geographical region an investment fund invest the large majority of its assets in.
Return in CHF 1/3/5 Year Return refers to the financial gains or losses of an investment fund as a percentage over a certain time in a certain currency.
Share Class Share class indicates whether the specific share class of an investment fund is mainly targeted at private or professional investors. A legal distinction is not always possible. Shares classes are usually considered as professional if the minimum investment exceeds USD, CHF or EUR 10’000.
Share Class Currency Share classes indicate the type and number of fees charged for the shares in a fund, as well as the currency, distribution policy and minimum investment. Not all share classes are available to every investor.
Sustainability Manager Sustainability manager refers to the person, group or company responsible for implementing a fund’s sustainability strategy and carrying out the non-financial research process.
Total Expense Ratio The total expense ratio, or TER, is a measure of the total cost of a fund to the investor. It includes the management and additional expenses in general.