FERI: Sustainability becomes the measure of all things for investors

For the Bad Homburg-based investment house FERI sustainability is a global megatrend that demands clear positioning. "Sustainability is playing an increasingly central role for companies and investors, and at the same time the topic is becoming the market standard in the financial world," says Dr. Heinz-Werner Rapp, Management Board member and Chief Investment Officer of the FERI Group. The European Union's Disclosure Regulation, which recently came into force, is a decisive step towards creating more transparency and increasingly channelling capital into sustainable sectors of the economy. Since March 10^th 2021, both companies and financial products and concepts must transparently document their contribution to sustainability.

Strategic realignment of central investment processes

FERI already set the course towards sustainability years ago and in many cases goes beyond the fulfilment of purely regulatory requirements. The company relies on an integrated approach that combines ESG criteria with the 17 Sustainable Development Goals (SDG) of the United Nations. "We are seeing a steady increase in demand from both institutional and private clients who want to pursue a clear sustainability strategy, often with a focus on the SDGs," says Antje Biber, head of FERI's SDG Office.

At FERI, sustainable investment instruments are the focus of a central asset allocation process that has direct repercussions on a large number of client portfolios. The FERI strategy portfolios, which have been established on the market for many years, were also adjusted to funds in accordance with Article 8 of the EU Disclosure Regulation in the course of a realignment with a dedicated consideration of sustainability criteria. Instead of investments in target funds, direct investments are increasingly being made: In the case of equities, this is done in compliance with ESG criteria; in the case of bonds, preference is given to bonds issued by countries that adhere to universally accepted democratic principles. "In addition, the portfolio managers include all relevant financial sustainability risks in the investment decision as part of the investment process and evaluate them on an ongoing basis," says Carsten Hermann, Managing Director of FERI Trust. The aim of this analysis, he says, is to identify sustainability risks at an early stage and minimise their impact.

Cooperation with SDG scoring provider

When selecting sustainability investments, FERI works with various external data providers and rating companies, including MSCI ESG, for example. Recently, the research provider ESG Screen 17 has also become one of the cooperation partners. ESG Screen 17 uses an innovative scoring system to analyse companies on an ongoing basis in relation to the 17 UN Sustainable Development Goals (SDGs). "The data from ESG Screen 17 not only offers us a target-oriented supplement with regard to the SDGs, but also an independent corrective to other databases, ratings and analyses," says Antje Biber. The goal and aspiration of FERI's sustainability activities is to support the global goals of a more sustainable economy. With the help of intelligent investment solutions, the UN SDGs are to be