ESG | Lupus alpha

“Only companies with effective corporate governance can sustainably withstand our ESG analyses.”

Dr. Götz Albert,
Managing Partner and CIO

ESG – A continuous process

We are living through exciting times in which the interests and expectations of investors and other social stakeholders in the areas of environmental and social standards are quickly converging. These are guiding principles that are being continuously reassessed. Continuing review of our investment strategies, in part to meet ESG standards, therefore forms a firm and established part of Lupus alpha's corporate policy.

Our core corporate responsibility involves tailoring our services to the needs and yield expectations of our clients, including many pension facilities and monitoring possible risks- and thus also ESG risks. For Lupus alpha, acting responsibly means even more. As a company, we are aware of our responsibility towards our employees and our social obligation and act accordingly. This is a current summary of this ongoing process.

Our responsibility

Responsibility comes to life in action

In addition to our customers, our understanding of responsible action is based on other important stakeholders such as business partners, employees and society as well as our responsibility towards the community and the common good.

Responsibility towards society

Responsibility towards employees

Responsibility towards clients and business partners

Initiatives and testimonials

Sustainable investment needs standards, transparency and trust. Lupus alpha is a member of various associations and initiatives that promote the topic of sustainable investing in this area.

Priciples for Responsible Investment Siegel

UN PRI – Principles for Responsible Investment

The Principles for Responsible Investment include six principles that are intended to serve as a guide for investors. Lupus alpha has been a signatory to the United Nations Principles for Responsible Investment (UN-PRI) since 2015.

The UN-PRI is an investor initiative in partnership with the UN Environment Program (UNEP) Finance Initiative and UN Global Compact. The guidelines of the initiative:

We will incorporate ESG issues into investment analysis and decision-making processes.
We will be active owners and incorporate ESG issues into our ownership policies and practices.
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
We will promote acceptance and implementation of the principles within the investment industry.
We will work together to enhance our effectiveness in implementing the principles.
We will each report on our activities and progress towards implementing the principles.

Further information about the »Principles for Responsible Investment (PRI) initiative« can be found here: www.unpri.org.

Forum nachhaltige Geldanlagen

The purpose of the Association for Sustainable Investment in Germany, Austria, Liechtenstein and Switzerland is to improve the legal and political framework for sustainable investment and increase awareness of sustainable investments. Its aim is to provide the general public and political, economic and academic decision-makers with comprehensive information about sustainable investment.

Lupus alpha has been a member of the Forum Nachhaltige Geldanlagen since 2019.

Detailed information on the FNG seal can be found at www.forum-ng.org/de.

Österreichisches Umweltzeichen

The Austrian ecolabel is a government seal of approval for the green economy in that country, which identifies environmentally-friendly products and services. Products must satisfy a number of criteria and undergo a comprehensive assessment to obtain the ecolabel. The assessment looks at the environmental impact of the product or service and reviews the production process, waste management, quality levels and usability.

Lupus alpha Sustainable Convertible Bonds has held the ecolabel since 2018.

For more details on the Austrian Ecolabel, visit www.umweltzeichen.at.

IIGCC - The Institutional Investors Group on Climate Change

Over the past 20 years, the IIGCC has developed into the leading Europe-focused investor community for collaboration in the fight against climate change. Its mission is to contribute to a net-zero and climate-resilient future by 2030. The IIGCC works with members to develop guidance, tools, frameworks and support mechanisms to help investors manage climate risks in their portfolios and seize opportunities for change.

Lupus alpha has been a member of the IIGCC since 2024.

Detailed information can be found here: www.iigcc.org.

Responsible Investing

Sustainablitiy is part of our fiduciary mission

Responsible investment forms an integral part of our fiduciary duties to our clients. Our first priority is to achieve long-term sustainable value for our clients. This also involves early risk identification and management to ensure long-term success. Non-financial information forms a necessary part of the investment process that must meet high ethical business standards.

To us, responsible investment means:

integrating environmental (E), social (S) and governance (G) factors into the investment process and

The critical exchange with our portfolio companies

We believe that these non-financial factors have an impact on the long-term financial performance of companies. Companies with lower standards in the area of sustainability regularly exhibit higher levels of risk in these areas.

MINIMUM REQUIREMENTS FOR ALL OUR FUNDS

ESG forms are an integral part of our company analyses

We exclude all companies that produce, or trade in, controversial weapons. And this also means looking at their corporate relationships and ownership.

The basis for this are the following national and international rules:

United Nations Principles for Responsible Investment (UN-PRI)

Oslo Convention on Cluster Munitions

Ottawa Convention on Anti-Personnel Landmines

BVI Rules of Conduct

The exclusions apply to anti-personnel landmines, biological and chemical weapons, cluster munitions, nuclear weapons, depleted uranium weapons and dazzlers

Sustainable Investment Solutions

Our integrated range of services includes tailored solutions that we offer our investors through our own sustainable mutual funds. For more than 15 years we have been managing funds and mandates using a sustainable approach. The different ways of integrating ESG into the investment process can also be combined to match a particular investment policy:

In the case of small and mid caps we have for many years been applying additional exclusion criteria to a number of funds, on top of the minimum requirements (no controversial weapons). Depending on the mandate, companies can be filtered out if, for example, they operate business lines such as coal mining and coal power generation, fracking, nuclear power, weapons or armaments.

Exclusion lists can be adjusted to each client's specific requirements. The standards applied to our mutual funds can be found in the relevant fund information.

We highlight the investment universes for our strategies across a range of ESG criteria using ESG scores and ESG ratings, data on the controversies and CO2 footprints of companies and their products/services.
Portfolio construction can favour companies that have particularly strong ESG profiles in one or more of these factors, for example by assigning them a heavier weighting. The same factors can also be optimised at general portfolio level to outperform a benchmark index. Our sustainable mutual funds apply different approaches, as their fund information shows.

In some of our sustainable mutual funds, United Nations Sustainable Development Goals (SDGs) play a role in stock selection. The UN’s SDGs provide a global agenda of 17 sustainable development goals. The higher the proportion of a company’s sales from products and services that support these goals, the greater that company’s positive social and environmental impact. Click here to find out all about SDGs.

DIALOGUE

At Lupus alpha, we systematically address material ESG issues in our meetings with companies. Constructive dialogue with the companies in which we invest is a key part of our investment process. Our Small & Mid Cap team alone conducts around 1,500 company meetings each year. By doing this, we consistently bring relevant ESG issues to the companies’ attention, thus helping them to address appropriate risks and bring about positive developments.

Governance issues play a particularly important role here, as the quality of corporate governance is crucial to a company’s long-term success. Only management bodies that place the highest demands on themselves to ensure integrity, transparency and action in the best interests of their company will organise their companies in a way that means that they come through our ESG analysis successfully and repeatedly.

ENGAGEMENT

We also exercise voting rights in the funds we manage in our role as an investment management company to promote sustainable business development within our portfolio companies. We generally support all initiatives aimed at maintaining and increasing the long-term value of a company.

At Lupus alpha, we systematically address material ESG issues in our meetings with companies. Constructive dialogue with the companies in which we invest is a key part of our investment process. By doing this, we consistently bring relevant ESG issues to the companies’ attention, thus helping them to address appropriate risks and bring about positive developments.

In selected cases, if we believe that certain measures will damage a company’s long-term value, we will vote against management or seek to bring about changes as active shareholders.

You can find our voting policy HERE

Sustainable funds

As specialised active asset amanger, we focus on the areas

Depending on the respective investment approaches and client needs, we choose specific paths for dedicated sustainability funds and mandates. The following approaches are available to investors with Lupus alpha's retail funds.

SMALL & MID CAPS

CONVERTIBLES

VALUE PROTECTION

Sustainability-related disclosures

Disclosures under SFDR / Disclosure Regulation
According to Articles 3, 4, and 5 of 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, financial market participants and financial advisors have been required since March 2021 to provide information on their integration of sustainability risks, the consideration of adverse impacts on sustainability factors in the investment decision-making process, as well as in investment advice, and on the alignment of remuneration policies with sustainability risks. Below you will find the statements of Lupus alpha.

Transparency of sustainability risk policies (Article 3)
In general, sustainability risks refer to events or conditions in the areas of Environmental (E), Social (S), or Governance (G) that could actually or potentially have significant negative impacts on the value of our investments. Sustainability risks can either represent a risk in themselves or have an impact on other types of risk—such as counterparty risks, market price risks, liquidity risks, operational risks, strategic or reputational risks.

The identification, analysis, and assessment of sustainability risks are components of the decision-making process for new investments and the ongoing monitoring of existing investments. The continuous measurement of sustainability risks and their internal reporting are conducted in risk management for all asset classes as part of the overall risk management process. Portfolio management accesses this analysis through internal ESG risk reports and integrates it, along with other investment-relevant information, into the investment process.

Additionally, sustainability risks are considered depending on the specific investment strategy, including through exclusion lists, revenue thresholds, positive criteria, consideration of principal adverse impacts on sustainability factors (PAIs), as well as the exercise of voting rights and active engagement.

More information can be found here.

Transparency of adverse sustainability impacts at entity level – PAI statement (Article 4)
The Lupus alpha Asset Management AG and the Lupus alpha Investment GmbH consider the principal adverse impacts of investment decisions on sustainability factors. The most recent PAI statement can be found here.

Transparency of remuneration policies in relation to the integration of sustainability risks (Article 5)
As part of the publication of our remuneration policy, Lupus alpha indicates the extent to which this policy is in line with the integration of sustainability risks. You can find our remuneration policy under mandatory disclosures here.

Publications

Here you will find information on our sustainable investment funds, our sustainability reports, market reports from various associations and initiatives as well as information on the European Transparency Code.

Sustainability at Lupus alpha and market issues: