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A responsible partner
Responsibility is embedded in everything we do

Our action plan

Our convictions

Responsibility goes hand-in-hand with a long-term, partnership approach. To us, it means having a sense of responsibility and integrity not only towards the present generation but also to future generations – and to the real economy and the wider world.

We believe in responsible economics and take a holistic view that considers the complex interactions between economy, society and the environment.

We are convinced that Environmental, Social and Governance (ESG) considerations can help us make better long-term investment decisions for our clients.

The strength of our convictions led us to create for our clients a range of innovative environmental and social equity strategies that are among the oldest and largest in the market today, such as Water, launched in 2000.

10 levers of action

We have identified 10 key levers of action across our activities, including both our own and our clients’ assets. We are convinced these levers of action will make us better investors and corporate citizens and help us play our part in designing a thriving system for future generations.

As a firm, responsibility starts with what we do with our own assets.

1. Investing our balance sheet

As we have full control over our balance sheet, we de-fossilised our portfolio in 2020. This includes our corporate treasury as well as seed investments.

2. Employee engagement to foster responsibility

Our employees are our most crucial asset and a key amplifier when it comes to sustainability and responsibility. We continue to engage with our colleagues on sustainability topics and encourage them to participate in local initiatives.

3. Managing our environmental impact

In our own business activities we take proactive steps to cut our carbon footprint by employing cutting edge building technology, reviewing every aspect of our operations and reducing the environmental impacts of our infrastructure.

4. Philanthropy

As the ultimate “risk capital”, philanthropy can be an important part of tackling some of the world’s most intractable problems. Through our initiatives and supported projects, we seek to stimulate action on environmental and social issues.

5. Advocacy and partnerships

We strive to engage across stakeholders in advancing sustainability and leveraging our influence through key partnerships. Pictet is signatory to the UN Principles for Responsible Investment across our businesses and employee pension fund, as well as the UN Global Compact and Net Zero Asset Managers initiative. Our key partnerships include Ceres (water), IIGCC (climate change), Building Bridges (sustainable finance), Access to Nutrition Initiative (nutrition) and the Stockholm Resilience Centre (planetary boundaries and biodiversity).

As an investor, our biggest impact lies in how we manage assets on behalf of our clients.

6. ESG integration into investment processes and risk management

Integration of ESG factors and sustainability risks has become the norm in our investment processes. Our ambition is to integrate material ESG and sustainability considerations across our activities, including research, investment decisions and risk management. To this end, we have built a proprietary ESG portal that consolidates information from a suite of third-party data providers.

Spotlight on our ESG scorecard

We have developed a proprietary ESG Scorecard showing ESG risks and opportunities to inform investment decisions and active ownership activities.

7. Responsible products and solutions

We continue to develop investment strategies that provide capital to companies providing solutions to social and environmental issues. We also support those companies transitioning their business activities for greater resilience and sustainability.

Click here to find out more about our product range

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ESG integrated is equivalent to an article 6 SFDR and may invest in securities with high sustainability risks. ESG focused is equivalent to an article 8 SFDR. Positive impact is equivalent to an article 8 or 9 SFDR.

SFDR: Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on Sustainability-related disclosures in the financial services sector

Click here to find a glossary with the main terms. Source: Pictet Asset Management, 31.12.2022

8. Active ownership

We strive to engage with issuers that are able to transition to more sustainable models – either directly or through investor collaborations. This includes routine engagement with board representatives and senior executives, as well as expressing our views at the ballot box. Depending on the severity of the concern and the issuer’s capacity or willingness to adopt generally accepted standards of best practice, we may choose to use escalation mechanisms at our disposal (e.g. voting against management and/or supporting shareholder resolutions or, as a last resort, selling the investment).

9. Client disclosure

Where relevant data are available, we strengthen reporting on the ESG characteristics of client portfolios and the impact of active ownership activities. Where data are missing, we encourage issuers to report according to international standards.

10. Research and thought-leadership

We will use our substantial experience across key environmental and social themes to publish targeted research and help raise awareness and capital for a sustainable transition.
Promoting sustainability - Investing in the transition
Laurent Ramsey, Managing Partner, Pictet Group, shares his views on investing in the transition to a sustainable future.

Source: Pictet Asset Management

Climate change

Climate change is arguably the defining issue of our time. For Pictet, climate change represents both an urgent challenge and an opportunity to build a more sustainable economy. We believe it will have a material impact on asset prices and investment returns in the coming years. This is why our investment teams have articulated a common investment philosophy on climate and developed a set of actionable Climate Investment Principles, underpinned by robust research and months of iteration across investment teams.  

Click here to find out more about our progress on climate change, and here to discover our climate action plan and targets.

Climate-related disclosures report 2022

Pictet Group was the first Swiss financial institution to set externally validated (SBT) science-based climate targets for 2030, consistent with keeping global warming to 1.5°C.

As part of our commitment to report on our climate change actions and progress against these targets, we have published an annual climate-related disclosures report. It covers Pictet's climate change governance, strategy, risk management and metrics and targets, in line with the Task Force for Climate-Related Financial Disclosures (TCFD) recommendations. The TCFD designed its framework to make firms’ climate-related disclosures more consistent and comparable to support investors in appropriately assessing and pricing climate-change risks. You can read about our other commitment and partnerships here.

Click here to access the report

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'West Africa Climate Change and Biodiversity' series

Photography by JB Russell

Key initiatives

A few key facts
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Sources: Fund Brand 50 © Fund Buyer Focus, Broadridge Analytics Solutions Limited, Twelfth edition, March 2023
NMG Consulting 2022 Global Asset Management Study, March 2023
Hirschel and Kramer (H&K) Responsible Investment Brand Index, March 2023

Responsibility is in our DNA

In the below video, Marie-Laure Schaufelberger, Head of Group ESG and Stewardship at the Pictet Group, explains why our business model and unique governance have created a culture of long-term thinking inherently linked to sustainability. She considers the biggest challenges for the financial industry: we need robust ESG data and a change in the mindset to ensure sustainable practices become embedded in investor thinking.

Active ownership
We believe that investors have the power to trigger positive change from corporate issuers, helping shape a more sustainable form of doing business. 

Engagement with corporate issuers

Our engagement programme with corporates seeks to encourage improvements to ESG practices and performance where they are material to long-term shareholder value creation. In addition, we seek to mitigate negative impacts on the environment and society.

In order to maximise the impact of our engagement activities, we have worked on a Group engagement programme organised around key ESG themes in which we have long-standing expertise. Depending on the severity of the concern and the issuers’ capacity or willingness to adopt generally accepted standards of best practice, we may choose to sell the investment. 

Our key engagement themes
how we engage
Source: Pictet Group, 2023

Dialogue with sovereign issuers

With sovereign issuers, we seek targeted and informed dialogue in areas of importance for the long-term outlook of the country.

The most successful investors will help steer governments towards the path that boosts their credit ratings, gives them most access to the market and improves the fortunes and potential of citizens.

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Mary-Therese Barton Chief Investment Officer Fixed Income
View our key figures on 2022 voting & engagement activities

Exercising voting rights and responsibilities

The overarching purpose of our voting is to protect and promote the rights and long-term interests of our clients as shareholders. We consider it our responsibility to hold companies and their executives accountable for their decisions. We aim to support a strong culture of corporate governance, effective management of environmental and social issues and comprehensive reporting according to credible standards.

The ShareAction report Voting Matters 2023 considered how 69 of the world’s largest asset managers voted on 257 key environmental and social resolutions in 2023. It found that Pictet Asset Management voted in favour of 91% of the resolutions where we had holdings. Of these, we supported 88% of the resolutions relating to environmental issues, 94% on social issues, and 93% on resolutions related to pay and politics.

Justin_Sullivan_Fire

'West Africa Climate Change and Biodiversity' series.

Photography by JB Russell

View our key figures on 2022 voting & engagement activities
Educational hub

Read our thought leadership papers and articles

Our research partners include University of Oxford’s Smith School of Enterprise and the Environment, Stockholm Resilience Centre, Institute of International Finance and the Copenhagen Institute for Futures Studies.

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Selected insights

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What are the UN sustainable development goals (SDGs)?

The sustainable development goals are a set of global social, environmental and economic targets, agreed by the United Nations in 2015 for its member countries.

Initially designed for policy makers and governments, the SDGs are now being embraced by businesses as they try to report on their sustainability efforts and credentials. 

In the financial services sector, investors also want to know how the companies in their portfolios are exposed to the SDGs. However, so far, very little standardisation in company reporting is available. Some companies only focus the communication on their own strong points, carry out assessments at a very superficial level or outright “greenwash” their own unsustainable activities.

The 17 goals of the UN's Sustainable Development Goals
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Source: UN, 2021

How do we apply the framework at Pictet Asset Management?

Our data scientists have developed a natural language processing tool which provides a systematic assessment of the alignment to UN SDGs, both positive and negative, of a company’s activities to each relevant goals. Our investment teams use this tool as a guide to inform their fundamental research and identify areas of potential improvement or engagement as companies transition towards the SDGs.

One example is through our Positive Change strategy which aims to invest in companies whose products and services are aligned, or are improving their alignment, to the UN SDGs framework.

Another example is through our Thematic strategies, where we identify investment themes that lay at the intersection of megatrends. Our sustainability-themed strategies follow impact objectives that are captured to an important degree by the SDGs framework. Often, our thematic universes have a close link to at least one or more SDGs based on the nature of their investable universe. This allows us to provide a foundation for a viable investment framework despite the inefficiencies of companies’ SDGs reporting. 

Our investors want to know whether the companies we invest in are helping to build a better future.

Di Patrizi Luca
Luca Di Patrizi Head of Intermediaries

Glossary

Active ownership
Proxy voting at shareholder meetings, and engagement with issuers and third party fund managers on priority themes (climate, water, nutrition, long-termism) and other material ESG issues

Best-in-class
Investment approach based on a sustainability rating in which a company's or issuer's environmental, social and governance (ESG) performance is compared with the ESG performance of its sector peers. All companies with a rating above a defined threshold are considered as investable. 

E/S (environmental or social) promotion
Seeking to increase exposure to issuers with low risks / high opportunities while decreasing / avoiding exposure to issuers with high risks / low opportunities (where applicable), exclusion framework applies, issuers with good governance in place, and active ownership carried out (where feasible).

ESG
ESG stands for Environmental (e.g. energy consumption, water usage), Social (e.g. talent attraction, supply chain management) and Governance (e.g. remuneration policies, board governance). ESG factors form the basis for the different responsible investing approaches.

ESG factors
ESG data (indicating both risks and opportunities), including sustainability risks and Principal Adverse Impacts where relevant.

ESG integration
The explicit inclusion by asset managers of ESG (Environmental, Social and Governance) risks and opportunities into traditional investment strategies based on a systematic process and appropriate research sources. It includes ESG data availability, a defined framework, ESG data usage in investment process, monitoring and disclosure of ESG role in investment process

Engagement
Investor-led dialogue with issuers on ESG matters with a view to share potential concerns, seek additional information, enhance public disclosure and/or influence behavior.

Exclusions
An approach excluding companies, countries or other issuers based on activities considered not investable. Exclusion criteria (based on norms and values) can refer to product categories (e.g. weapons, tobacco), activities (e.g. animal testing), or business practices (e.g. severe violation of human rights, corruption).

Please refer to the Pictet Asset Management’s Responsible Investment policy for details on the activities

Exclusionary / Negative Screening
An investment strategy excluding companies, countries or issuers on the grounds of activities considered as not investable. Exclusion criteria can refer to product categories (e.g. weapons, tobacco), activities (e.g. animal testing) or practices (e.g. severe violation of human rights, corruption). They can also be based on personal values (e.g. gambling) or on risk considerations (e.g. nuclear power).

Impact investing
Investments intended to generate a measurable, beneficial social and environmental impact alongside a financial return.

Proxy voting
A ballot cast by one person on behalf of another. One of the benefits of being a shareholder is the right to vote on certain corporate matters. Since most shareholders cannot, or do not want to, attend the annual and special meetings at which the voting occurs, corporations provide shareholders with the option to cast a proxy vote. 

Responsible investment
Responsible investment refers to any investment approach, integrating environmental, social and governance factors (ESG) into the selection and management of investments. There are many different forms of responsible investing, such as best-in-class investments, ESG integration, exclusionary screening, thematic investing and impact investing. They are all components of responsible investments and have played a part in its history and evolution.

Sustainable investment
An investment in an economic activity that contributes to an Environmental or Social objective, which might be aligned with the EU taxonomy (a classification system created by the European Parliament & Council, that establishes a list of environmentally sustainable economic activities). Usually measured by the % revenue contribution of the activity, given it abides by the do-no-significant-harm principle. Targeting means having sustainable investment as its main objective.

Thematic investing
Investment in businesses contributing to sustainable solutions both in environmental and/or social topics. In the environmental segment this includes investments in renewable energy, energy efficiency, clean technology, low-carbon transportation infrastructure, water treatment and resource efficiency. In the social segment this includes investments in education, health systems, poverty reduction and solutions for an ageing society.

Reports and policies

Disclosures

  • Shareholder Rights Directive (SRD II)

    The Shareholder Rights Directive II is a European Union Directive that aims to promote effective stewardship and long-term investment decision taking. It sets out requirements in several key areas, including the transparency of engagement and proxy voting by asset managers, and regular reporting on the implementation of such activities. 

  • Regulation on sustainability-related disclosures in the financial services sector (SFDR) 

    The SFDR is a European Union Regulation that forms part of the EU’s Action Plan to integrate sustainability considerations into its financial policy framework in order to mobilise finance for sustainable growth. 

    The SFDR lays down disclosure obligations for manufacturers of financial products and financial advisers toward end-investors, in relation to the integration of sustainability risks, and as regards adverse impacts on sustainability matters at entity and financial products levels. 

    For further details on regulatory disclosures, please refer to our Responsible Investment policyResponsible Investment report and Regulatory Documents page.
  • UK Stewardship Code
  • The UK Stewardship Code is a voluntary code established by the UK Financial Reporting Council (FRC) which sets high stewardship standards for asset owners and asset managers. It comprises of a set of 12 “apply and explain” Principles.

    Pictet Asset Management is supportive of efforts by regulators and policymakers to make transparency and disclosure a priority for sustainable finance. We target actions to meet disclosure requirements around our engagement and voting activities, as well as the ESG risks and opportunities of our products and their impacts on sustainability. We are looking to provide ever increasing transparency by improving reporting of our firmwide and portfolio-specific active ownership activities. In this context, we are delighted to have been named as a signatory to the UK Stewardship Code 2020.

    Please refer to our Responsible Investment report for further details on our stewardship philosophy, governance, processes and activities against the 12 Principles.

A taxonomy is essential at every level, as it will enable businesses to get better access to capital markets to finance their green activities.

Borremans Eric
Eric Borremans Head of Environmental Social & Governance

Sustainability reports and policies

 Pdf Responsible Investment policy
 Pdf Responsible Investment report 2023
 Pdf PRI transparency 2023 report
 Pdf TCFD (Task Force on Climate-Related Financial Disclosures) report 2022

For more information on sustainability risks, principal adverse impacts, engagement, proxy voting and remuneration policies, please refer to our Responsible Investment policyResponsible Investment report and Regulatory Documents page.