Implementing sustainable and responsible investment management means incorporating environmental, social and governance (ESG) criteria, as well as climate issues into investment strategies.
Ethos provides more than 2'000 ESG analyses and ratings of listed companies and bond issuers, including companies included in the SPI index, companies included in the MSCI World ex-CH and MSCI EM indices, and issuers included in the Swiss Bond Index AAA-BBB.
ESG ratings are determined by benchmarking companies against the practices of their peers active in the same sector. The quantitative analysis is also accompanied by a qualitative analysis of the company's products and its exposure to serious or major controversies. Ethos also examines whether a company should be excluded from a sustainable portfolio, either because it generates a significant proportion of its sales in a sensitive sector, or because it is involved in a serious controversy.
In addition to these traditional assessments, Ethos has introduced a carbon rating to evaluate the relative intensity of a company's greenhouse gas emissions (direct and indirect) and its climate strategy. This rating enables prioritising investments in companies that emit the least CO2 or that have implemented credible strategies to reduce their emissions.
Ethos has also developed a methodology to identify companies that have a positive environmental and/or social impact and contribute to the transition towards a more sustainable economy.
This evolving methodology makes it possible to quantify the proportion of a company's sales, and therefore of its investment portfolios, that can be considered as having a positive impact from a social and/or environmental point of view. This makes it easier for Ethos and its clients to prioritise investments in these companies and sectors.
To this end, Ethos has grouped activities that play a key role in the transition to a more sustainable society into ten different themes. To be included in this positive impact classification, the activities must support a fair and equitable society, and not undermine the limits of the planet. The principles of sobriety and harmlessness ("do no significant harm"), as well as the life-cycle analysis of products and services, are also key criteria of the methodology.
Portfolio and fund screening
Ethos also offers its clients a portfolio analysis, providing them with an overview of their sustainability profile and their exposure to controversies, climate change issues and the positive impact of companies.
Ethos screens portfolios according to pre-defined sustainability criteria. To this end, Ethos produces a detailed report containing a consolidated overview of the portfolio as well as in-depth analyses by region and asset class. The report is complemented by analyses that verify the portfolio's exposure to sector exclusions, serious controversies or greenhouse gas emissions. ESG ratings of listed companies and analysess of investment funds are also part of this service.
Finally, Ethos offers sustainability analysis for investment funds, and produces a specific sustainability report for each fund. In particular, the breakdown of ESG ratings and extra-financial performance are compared with those of the benchmark index. The sustainability report also presents the fund's exposure to ESG controversies and the sensitive sectors and companies in which it is invested.