The Liechtensteinische Landesbank (Österreich) AG already initiated a special investment office in 2010 that has successfully focused on environmental, social, and governance (ESG) investments in a structured way. As part of our investment process, we can offer the following ESG methods: exclusion criteria, best-in-class approach, and portfolios with an optimised carbon footprint. Depending on individual needs, investors can select or combine a suitable ESG method and implement it in their own investment process.

A compact overview of the three ESG methods

Exclusion criteria: Here, controversial services and products are defined that companies, sectors, or countries may not engage in if they want to remain in the ESG investment universe. Criteria may be defined according to international standards (OECD, UN, ILO) or the investor's own canon of values. Within this framework, controversial services, manufacturing processes, or products can be indexed and excluded. These include animal experiments and industrial agriculture, for example. Arms production and trading, the nuclear industry, or the extraction of fossil fuels and raw materials as well as child labour, production conditions, and ecological product qualities are also generally among the exclusion criteria.

Best-in-class: As part of this approach, the classic ESG criteria (environmental, social, governance) are examined. In other words, the most positive companies in a sector from the ESG perspective are considered for investment. Since these evaluation factors can vary from sector to sector, individual criteria are examined in the sectoral context – to ensure a fair and transparent evaluation in the end.

Portfolios with defined CO₂ targets: A sustainable investment strategy can also be implemented and expanded by taking the carbon footprint into account. The sum of the total CO₂ emissions of the individual securities in a portfolio is regularly monitored. Depending on investors' wishes, this total carbon balance can be kept below a threshold value by restructuring the portfolio.

A sustainable investment strategy incorporates selected ESG-related criteria alongside financial considerations: This adds additional aspects to the analysis that may go beyond traditional financial metrics. Company-specific opportunities and risks are also evaluated and examined, which often cannot be determined on the basis of fundamental data.

Investing in securities also entails risks. Compliance with a certain lower value limit cannot be guaranteed.