Sustainable investment

The ESG Sustainability criteria (Environmental, Social and Governance)

As the managing director of the Zurich Investment Foundation, Zurich Invest Ltd is a company that acknowledges its responsibility and monitors application of the ESG criteria both when selecting managers and during the regular review process. We measure our portfolio managers according to whether they take environmental issues (Environmental), social responsability (Social) and sustainable corporate management (Governance) into account and integrate them in the selection of shares. The objective is always to ensure that our managers' actions are consistent with the long-term revenue targets of our customers.

We review and encourage the Integration of ESG criteria

Zurich Invest Ltd develops investment solutions in close partnership with successful external portfolio managers. Each manager is chosen through a clearly structured, independent investment management process. An important step in the process is how the portfolio manager takes ESG criteria into consideration and integrates them into their investment process.

It is important to us that portfolio managers actively engage with the topic of sustainability and ESG integration. We expect them to develop in these fields on an ongoing basis, because we are not only convinced ourselves that sustainability is important – we also know that this is a topic that our customers place great value in. This is why we define reasonable targets for active share mandates and monitor the various ESG approaches of each individual portfolio manager within the relevant investment process. We also review their PRI membership, reporting and active voting rights usage.

Submission of voting recommendations - Active Ownership

The fund management of Zurich Invest Ltd exercises shareholders' rights and votes in accordance with the recommendations of ISS (Institutional Shareholder Services Inc.) for foreign and Swiss shareholdings. In doing so, it aims to support sustainable company management and also encourage and raise awareness of the relevance of sustainability. Zurich Invest Ltd also reviews how portfolio managers vote at shareholder meetings. 

Details on voting

Swiss Real Estate

Sustainability is also a key factor for the real estate investments of the Zurich Investment Foundation. At Swiss Real Estate, we make a positive impact. In 2013, we had already introduced sustainable building management at all levels (social, economic, environmental) and for all relevant functions and processes. The Zurich Investment Foundation focuses on the following objectives in this connection:

1. We aim to achieve a 20% reduction in the greenhouse gas emissions of our real estate portfolio by 2020 (measured as of 2010). This is consistent with the targets set by Switzerland and the EU with regard to the general reduction of greenhouse gas emissions.
2. We aim to achieve a reduction in greenhouse gas emissions of 80% by 2050 (measured as of 2010).

What have we achieved?

We are completely on course when it comes to energy conservation – the energy consumption of the Swiss real estate holdings of the Zurich Investment Foundation has already fallen by a total of 16% in the period from 2010 to 2016. The CO2 output has even been reduced by as much as 19%. These figures show clearly that much has already been done to achieve the 2020 targets, or even surpass them.

Real Estate Europe Direct

Social responsibility is the key to long-term business success in real estate investment – this is a belief shared by the Investment Committee and the portfolio managers of the Real Estate Europe Direct investment group (Immobilien Europa Direkt, IED)

Ethics and economic success often go hand in hand. For instance, residential and commercial properties that are both resource-efficient and flexible help to ensure that customer funds are invested purposefully and that the investments retain their value in the long term. The portfolio manager of the Real Estate Europe Direct investment group has many opportunities to make a difference: by helping to reduce tenants' operating costs, by increasing the productivity and well-being of employees, and by designing and managing the building to contribute to the location's prosperity. In this way, the local community benefits, the portfolio manager prevents value erosion and the value of the real estate investment increases.

According to our portfolio manager Schroders, a successful investment strategy must incorporate not only traditional considerations but also environmental and social aspects as well. He is convinced that such a comprehensive approach will be rewarded with better investment decision-making and attractive performance in the long run.

What have we achieved?

The Real Estate Europe Direct fund participated in the annual evaluation of the GRESB (Global Real Estate Sustainability Benchmark) in 2017 for the first time for global real estate holdings and was immediately awarded the ""Green Star"". GRESB is the dominant global standard for assessing the ""environmental and social governance"" of real estate funds and enterprises.

Find out more in the sustainability report IED
Find out more about energy consumption IED

In the area of investment in infrastructure, the Zurich Investment Foundation offers its investors the opportunity to participate in renewable energies in an exemplary manner.

Acciona Energia International

With the global Acciona Energia International co-investment, investors can participate in one of the largest operating portfolios of 55 investments in 14 countries. The involvement consists mostly of wind farms. The installations produce a total of 2.1 gigawatts of electricity. Of the electricity produced, 88% comes from installations in OECD countries (in particular Australia, Italy, Mexico and the USA).

South Staffordshire Plc

Another example of investment in sustainable infrastructure is the South Staffordshire plc service group. This Walsall-based (UK) company operates a water company with two separate supply regions. It serves the Black Country to the north and west of Birmingham. Every day, the company supplies 330 million liters of water to around 500,000 households and 36,000 business customers. The company also offers a variety of services for the British water sector and increasingly also for other infrastructure owners. With South Staffordshire Plc, investors have good cash flow transparency and can expect a stable and long-term yield profile.

Aberdeenshire Schools PPP

Another portfolio consists of a total of 21 investments in health & education in Scotland and North East England. Private investments in social infrastructure have existed in the United Kingdom since back in 1992 and provide investors with a regular cash flow. Every effort is made to eliminate as many risks as possible, which is why for instance subcontractors are employed to develop and operate the institutes. Such contracts are usually long-term and bound to fixed prices.