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German institutional interest in SRI continues to grow, survey shows

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  • Frankfurt, Germany

More than half of the German institutional investors surveyed in a sustainability study commissioned by Union Investment are applying sustainability criteria, up from the 48% who reported the same last year.

Among investors linked to the church and federations, the share is even higher at 90%.

Further, the sentiment index, calculated by professor Henry Schäfer from the university Stuttgart for the German investment house, has risen considerably, from 5.4 points to 13.4 points year-on-year.

“A growing number of investors,” said Schäfer, “expect sustainability reporting requirements to increase and therefore firmly believe they can no longer ignore the issue of sustainability.”

Another main motive for using sustainability criteria is risk management, Union said.

One anonymous “decision-maker at a pension fund” in the survey said: “We see sustainability as a risk management issue rather than a marketing tool. We use it to manage our long-term risks, not to win customers.”

The survey of 215 German institutional investors, with accumulated assets of around €1.5trn, also found that “concerns about this type of investment are declining significantly”.

German institutions mainly use screening (87%) in their SRI investment approach, followed by best-in-class approaches (58%).

Active shareholding is only exercised by 36%.

Meanwhile, in Switzerland, where active shareholder engagement has just been made mandatory for Pensionskassen by law, 60 institutions, including asset managers such as Swisscanto, have formed the forum Swiss Sustainable Finance (SSF).

It aims to “establish Switzerland as the leading centre for sustainable financial services”.

Sabine Döbeli, head of sustainability management at bank Vontobel and vice-president at FNG, was named SSF’s managing director.

Currently, CHF57bn (€47bn) of assets in Switzerland are invested using sustainability criteria, “a sustainable part for international clients”, SSF said.

It added that one-third of the global volumes in micro finance investments was managed in Switzerland.

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