Responsible investing

The Pictet Group Entities integrate sustainability risks in the investment decision-making process, in investment advice and insurance advice for products they actively manage, subject to product and service specificities and to locally applicable regulations. Across research, investment activities, risk management and advisory services, we place emphasis on the inclusion of high-quality environmental, social and governance data when evaluating corporate issuers. To this extent we have developed a proprietary ESG Scorecard that provides a focused view of both ESG risks and opportunities. Our ESG Scorecard is based on a curated set of the most material data points, across four pillars: Corporate Governance, Products & Services, Operational Risks, and Controversies. Similarly, for external-manager selection we systematically address ESG issues with our investment partners and encourage improvements of current practices, if necessary. We have developed a dedicated ESG questionnaire that covers our investment partners’ engagement to ESG, the level of ESG integration in their processes or operations as well as reporting and transparency issues. Pictet & Cie (Europe) S.A. and branches apply the core tenets of good company ownership, with a focus on the investee company’s corporate strategy, the company’s management team and its effective leadership, its financial strength, its capital structure, the fair valuation of issued securities, sustainability risks & opportunities and adverse impacts of investments on society and/or the environment.

The Pictet ESG Scorecard

Pictet & Cie (Europe) S.A. considers the principal adverse impacts of investment decisions on sustainability factors in its portfolio management and advisory activities, where relevant, through a combination of portfolio management decisions, active ownership activities and the exclusion of issuers associated with controversial conduct or activities. Consequently, Pictet & Cie (Europe) S.A. and its branches are working to enhance the internal framework in line with Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector by gradually integrating the consideration of adverse impacts on the environment and society in their due diligence processes together with the relevant financial risks and relevant sustainability risks. Therefore, further policy information on the identification and prioritization of principal adverse sustainability impacts will be published in line with the finalization of the applicable Commission Delegated Regulation. This will include information such as the carbon intensity of investments and the severity of social and environmental controversies. Ultimately, this will help reduce these adverse impacts over time. 

Pictet & Cie (Europe) S.A. has adopted a Responsible Investment Policy that describes how the Bank integrates sustainability risks in its investment process (ESG Integration), implements responsible investing strategies and performs its active ownership responsibilities on behalf of its clients, in full acknowledgement of their rights as investors and for their benefit. This includes the monitoring of investee companies, proxy voting and issuer engagement. 

The Pictet Group has committed and adhered to a number of international and Swiss codes for responsible investment. In addition, as outlined in the Group’s Sustainability & Responsible Ambitions 2025, it is our intention not only to consider but also, where possible, to mitigate material adverse impacts that may exist through our investments and operations. In the area of climate change, arguably the defining issue of our time, the Group has taken a number of steps aimed at driving positive change, fostering the transition, addressing climate risks and excluding issuers. A description of these steps can be found here. We are currently in the process of ensuring all Pictet Group entities are effectively covered by, and adhere to, these commitments. We are also reviewing the data available and defining material metrics for disclosure. We expect to be able to comply by the end of 2022.

The Pictet Group’s EU entities other than Pictet & Cie (Europe) S.A. and Pictet Asset Management (Europe) S.A. adhere to the objectives that Regulation (EU) 2019/2088 sets out with regard to principal adverse impacts but have chosen not to commit to comply for the time being. The main reason for not considering adverse impacts is the lack of sufficient data and data of sufficient quality to enable them to define material metrics for disclosure. The relevant Pictet Group entities intend to monitor the industry position closely and to update their approach in due course as the industry position evolves and further regulatory guidance is made available.