How we define sustainable investment
What are ESG criteria?
ESG is the abbreviation for Environment, Social, and Governance.
What is UNPRI?
UNPRI are the UN Principles for Responsible Investment and are an investor initiative founded in 2006 in partnership with the United Nations Environment Program UNEP and the UN Global Compact.
More and more investors focus on ESG criteria or UNPRI. When investing, institutional investors are increasingly focusing on the three themes of environmental protection, social behavior and fair corporate governance.
Social issues and corporate governance issues are much easier to define in terms of quantitative factors than in the E area i.e. Environmental factors.
S and G can be measured with money and time. For example, is the pay of employees fair? Are working hours respected and overtime paid fairly? What opportunities exist for creating space and time for families? What about equitable pay between women and men, and what about the salary gap between the different hierarchy levels in a company? The basic unit of measure is money and the factor time. A minimum wage is the amount of money paid per hour. Overtime can be defined in terms of time and money.
Unfortunately, there is no such clear calculation in the field of environmental protection. One the one hand, you can demonize oil producers. On the other hand it might make sense to prefer oil companies that do their utmost to protect the environment in the manufacturing process.
Another good example is cement producers.
The most astonishing thing about cement is how much air pollution it produces.
Manufacturing the stone-like building material is responsible for 7% of global carbon dioxide emissions, more than what comes from all the trucks in the world.
After wresting deep cuts from the energy industry, policymakers looking to extend the fight against global warming are increasingly focusing on construction materials and practices as a place to make further reductions. The companies working on solutions should get the best ratings even if buyers are reluctant to pay more for greener cement.
With the inclusion of all branches of industry and the extension of penalty points for so-called greenwashing, CVA Services GmbH is developing a new model for ESG criteria based on UNPRI. We have been committed to a Code of Conduct since the company was founded in 2012, which is divided into the following three areas:
– Economic sustainability
– Environmental Protection
– Social and ethical responsibility
We look forward to working with our customers to develop clear and transparent definitions of ESG criteria based on UNPRI.
The basis for this is, inter alia, the consultations of ESMA and the latest publication of the hearing of January 2019:
Last update: July 3rd, 2019