Why We practice Sustainable Investing

ICG took its first steps in sustainable investing with energy efficient real estate investments. The benefits were obvious: an initial investment in insulation, windows and energy efficient heating technologies reduced the energy consumption of a building by up to 90% (or even more) and thus the respective CO2 emissions (one fourth of global CO2 emissions come from energy use in buildings) and resulted in long-term significantly lower operating costs (heating, cooling) for a building. The cost can be amortized in only a few years.

 

This triggered an intensive thought process on the benefits of integrating sustainability considerations (environmental, social, governance considerations) across asset classes: the benefits for society, environment and investors.

 

What started with screening the existing body of research and publications and performing our own practitioner’s studies resulted in the publication of the book “Nachhaltige Anlagen für institutionelle Investoren” (NZZ Libro 2011), which appeared in English in 2012, titled “Sustainable Investing for institutional Investors: Risks, Regulations, Strategies” (John Wiley & Sons), a standard work on sustainable investing used by investors and scholars globally.

 

Ever since we hold the strong investment belief that integrating sustainability considerations (environmental, social, governance) will not only benefit society but maximize long term investment performance, both through more comprehensive risk management and realizing investment opportunities resulting from long-term sustainability megatrends (e.g. resource efficiency, demographic megatrends).

 

As our investment approach is very pragmatic in the sense that it is free from any ideologies and focused on long-term superior investment performance, as a consequence, we decided to brand it Pragmatic Sustainable Investing.

 

Over the years, we launched a number of sustainable investment products:

2010: Asia Women Microfinance Fund (together with Symbiotics Group) – microfinance loans focused on women in Asia

2011: Good Buildings Swiss Real Estate Funds (together with Bank Sarasin and Berninvest) – sustainable residential real estate in Switzerland

2013: Resource Efficiency Leaders Index (Bloomberg: RESEFFLI Index) – the index invests in the world’s leading companies providing products and services to reduce consumption of natural resources and abate pollution in five sectors, energy, water, waste, materials and air pollution.

2013: Palladio Real Estate Ltd – sustainable residential real estate in central city locations

2014: Energy Champions Fund – investment in energy companies globally, investment process integrates sustainability considerations

2014: Relaunch of Gateway Natural Resources Fund – global commodity investments, investment process integrates sustainability considerations