Vontobel tech fund seeks positive environmental impact and returns
Emphasis on businesses generating earnings via innovative products, solutions
2 Nov 2020 | The Asset

Around 77% of company earnings in the Vontobel Fund – Clean Technology had a positive social or environmental impact, as of June 30 2020, with their activities in the 2019 financial year including the generation of around 155,000 gigawatt hours of renewable energy, the treatment of more than 7 billion cubic meters of drinking water, and the collection, processing, and partial recycling of 76 million metric tons of waste.

The aim of impact investing is the specific, measurable improvement of social and environmental factors. Through the selection of the companies, the fund aims to positively influence pre-defined impact indicators while also generating positive returns.

These indicators are closely based on the United Nations’ Sustainable Development Goals (SDGs), in areas like “industry, innovation, and infrastructure”, “sustainable cities and communities”, “climate action”, and “affordable and clean energy”. The fund reveals how the activities of the companies in the portfolio have affected each impact indicator.

The fund also calculates the potential avoided emissions. Of the 66 portfolio companies, 51 are relevant for this factor and report a total of around 2.9 million metric tons of avoided CO2 emissions. As well, the Clean Tech Impact calculator that Vontobel Asset Management provides on its website allows investors to calculate what positive effects the investment of a desired sum in the fund would have on its indicators and, thus, its concrete impact.

“When selecting companies for the fund, we look for business models that generate a large portion of their earnings via innovative products and solutions,” says fund manager Pascal Dudle. “Engagement in support of the companies plays a special role in our investment process, for example, in order to help them adapt their reporting standards to the EU [European Union] taxonomy. Over time, we will continuously improve the quality and scope of our impact measurement.”

The fund now reports information on the portfolio’s compliance with the EU taxonomy. Asset managers are supposed to report on the extent to which their investment products achieve the six environmental targets defined by EU taxonomy from March 2021 onward.

“As only a few companies currently publish data in line with the requirements of the EU taxonomy, this year we have made estimates on the basis of our companies’ available publications,” Dudle says. “According to these estimates, around 44% of our portfolio companies’ sales are currently relevant in the EU taxonomy, most of which are in climate protection."

Have you read?