Sustainable fund portfolio

Multi-stage selection process

The KCD Union sustainable funds are managed by the fund company of the cooperative association. To enable the fund manager at Union Investment to invest funds where it makes most sense from the point of view of sustainability, a three-stage selection process has been defined. This is carried out upstream of the returns-orientated testing and a wide range of possible investments is made available at the end. This process is overseen by the renowned Bank Sarasin from Switzerland, which has a significant amout of experience in the field of sustainability research.

The first stage is to define exclusion criteria. For instance, companies that produce tobacco or alcohol, or that offer gambling, are excluded. In addition, no investments are made (for example) in countries that violate human rights or do not allow freedom of religious expression.

In the second stage, the various investment categories are reviewed with a sustainability filter, which ensures that ethical standards based on Christian social doctrine are met. These standards, which are also defined in the social statement of the Christian churches, are given concrete form in the investment committees and are formulated as a practical guide for the selection of investments. Representatives from all the church banks participate in this process in the investment committees.

In the final stage, the available investment opportunities are narrowed down to the very best (best-in-class approach). In this way, funds will be targeted at those companies that give the most consideration to the ideas of sustainability.

Finally, Union Investment analyses the proposals from the point of view of returns. Funds are only placed in investments that offer the best potential returns.