Responsible Investing at Pictet
Investing for a sustainable world
With more than 200 years of investment experience, Pictet is used to taking the long view. In so doing, we consider not just the needs and desires of today’s generation but also those of tomorrow’s. Developing sustainable investment solutions takes foresight, time and stamina. As the world changes, so too must the way we look at investment as a whole.
“We make a living by what we get, but we make a life by what we give.”
Towards a more responsible form of capitalism
A growing body of investors, from the professional pension provider to the couple saving for their children's education, expect investment managers to incorporate environmental, social and governance criteria into their decision-making processes, alongside traditional financial metrics.
The investor community is a key force for positive change, driving progress, as well as funding new technologies. Pictet and many of our clients are allocating capital to finance the real economy, with the needs of future generations in mind. We are developing a broader view of what we are investing in, establishing a better, more robust process that can deliver strong sustainable returns.
We are committed advocates of responsible investing and want to play an active role by encouraging sustainable finance. The industry must be steered towards more inclusive thinking around people, planet and portfolios, because over the long term, they are inextricably linked.
For Pictet, measuring and sharing the impact of investing is key for bringing the transparency that differentiates true integration from simple box-ticking. To this end, we are concretely integrating Environmental, Social and Governance (ESG) aspects in our investment processes, risk management and reporting practices, and also upstream in our economic research and financial analysis.
Cutting balance sheet exposure to fossil fuel producers and extractors
The Pictet Group announced that it has decided to eliminate balance sheet exposure (both gross and net) to fossil fuel producers and extractors (oil and gas, and thermal coal)1. These assets, which amounted to CHF 250 million at 31 December 2019, will be reduced to nil by 31 December 2020.
“We believe that, irrespective of collective public sector action on moving to a carbon-neutral economy, companies in the private sector should also advance this objective independently. As we have full control of our balance sheet, this is one undertaking that we can make now.”
1 Defined as companies deriving more that 25% of their revenues from the relevant carbon-intensive activities.
Controversial weapons A call to index providers
Since 2011, the Pictet Group has enforced a strict exclusion policy on companies involved in controversial weapons for all its actively managed strategies. Such weapons may cause indiscriminate or disproportionate harm and their use is banned or restricted under international conventions*.
These include cluster munitions, antipersonnel mines, chemical and biological, as well as nuclear weapons that are produced for countries that have not signed the Treaty on Non-Proliferation of Nuclear Weapons.
As part of this commitment, in August 2018, Pictet ― which has a seat on the Board of Swiss Sustainable Finance (SSF) ― has spearheaded a collaborative initiative together with SSF, with the aim of removing controversial weapons manufacturers from mainstream indices and benchmarks.
So far, the initiative has secured the backing of 140 signatories controlling USD 6.9 trillion and including asset owners and managers.
Open letter to index providers
At the end of January 2019, SSF sent its “Open letter to global index providers on the exclusion of controversial weapons” to raise their awareness and obtain their support.
“A global coalition of investors is pressuring index providers to drop controversial weapons manufacturers from mainstream benchmarks.”
“Index providers need to reflect investor practices and expectations”, insists Eric Borremans, Head of Environmental, Social and Governance at Pictet Asset Management, adding that if such exclusions became embedded in index-construction rules, it would raise the stakes for those companies involved in such activities and promote greater transparency.
Active Ownership Report for 2019 Leveraging the power of investors to trigger positive change
How Pictet embeds responsible investing
Wealth management ― Aiming to be responsible
By embedding responsible investing aspects at every stage of our value chain, we give our clients a thorough understanding of sustainable issues surrounding the management of their wealth.
Asset management ― Investing for tomorrow
We offer professional investors full expertise for them to invest in thematic strategies that contribute to solving environmental and social challenges, as well as Socially Responsible Investment (SRI), and equity and fixed income strategies that incorporate ESG considerations.
Asset services ― Fostering transparency
We are firmly convinced that it is necessary to adopt and promote sustainable investing within our industry. We have therefore included ESG metrics in our reporting practices, both in printed documentation and in our online tool Pictet Connect.
In the media
Partnerships and commitments to sustainability
Pictet adheres to the UN Principles for Responsible Investment and to the Principles for Responsible Banking. It also partners with organisations that promote sustainability, including Swiss Sustainable Finance, the Swiss Climate Foundation, and the International Energy Agency.
Anti-personnel mines: Ottawa Convention (1999)
Cluster munitions: Oslo Convention (2010)
Biological and chemical weapons: Geneva Protocol of 1925, Biological Weapons Convention (1975), Chemical Weapons Convention (1997)
Nuclear weapons: Treaty on Non-Proliferation of Nuclear Weapons (1970)