Investment strategies for volatile markets

GLOBAL INVESTOR 3.07 Services — 49
Photo: Martin Stollenwerk
which is then reviewed in the subsequent
deeper examination phase, with the aid
of personal discussions with company
executives. The preliminary assessment is
then revised. The analyst in charge must
defend his assessment before a committee
prior to it being published. Experience
shows that a systematic procedure
of this kind produces good results.
How will Credit Suisse clients benefit from
the collaboration with Innovest?
Bernhard Felder: The collaboration
will enable clients to pursue a sustainable
investment style. We will use the data
we receive from Innovest to provide a specific
sustainability rating for our clients
as a supplement to our company analyses
(company notes). This added information
service enhances transparency. Moreover,
our unlimited access to Innovest’s database
will assist us in thematic analysis, for
instance in the area of alternative energy.
The resulting findings will be used to
develop new products, such as funds or
indices that give clients interesting investment
options.
Will the Innovest appraisals thus not
be incorporated into Credit Suisse’s overall
company assessments?
Bernhard Felder: Yes, they will be.
The Innovest appraisal will be a significant
component of the overall assessment,
and will reflect in our stock ratings.
Is the desire for sustainability mainly
a societal trend, or does sustainability truly
have an impact on earnings potential?
Bernhard Felder: Sustainability is
naturally a hot topic at the moment. At the
same time, though, the financial markets
feature plenty of good examples of sustainability-oriented
products that deliver
high returns. It’s always a matter of risk
and return. Companies that have risk
under control often exhibit greater earnings
potential over a longer time horizon.
And environmental changes – whether
“Sustainability is
precisely the
type of complex
matter that requires
top-notch
expertise.”
Credit Suisse will use data from Innovest to provide clients with sustainability ratings as
a supplement to its company analyses. In addition, analysts will work with Innovest specialists
to develop investment themes and products like funds or indices (note that the above example
is for illustrative purposes only).
ecological or societal – always entail risk,
but they also present opportunities. For as
the Brundtland Report from the World
Commission on Environment and Development
so elegantly stated back in 1987,
sustainability means meeting “the needs
of the present without compromising the
ability of future generations to meet their
own needs.”
Why do the analysts at Credit Suisse rely
on external consultants in this area?
Bernhard Felder: Our philosophy is
to provide our clients with the best research.
We employ certified specialists to
perform fundamental and technical stock
analysis. We additionally procure the
best available information. We therefore
bring in external analyses on top of all our
internal sources. We then crunch and
interpret the data for our clients. Sustainability
is precisely the type of complex
matter that requires top-notch expertise.
The services provided by Innovest will be
an excellent supplement to our own analysis
activities.
What distinguishes Innovest from other
consultancy firms?
Bernhard Felder: Innovest has been
providing sustainability assessments on
companies for a decade now. Moreover,
Innovest’s coverage has turned out to be
ideal for Credit Suisse, enabling us to
draw on professional sustainability information
for all of the stocks in our universe.
Does the collaboration with Innovest
add up to a competitive advantage?
Bernhard Felder: The question is
what we make out of the data. Our analysts
will work directly with the specialists
at Innovest to develop interesting investment
themes, and this procedure holds
Bernhard Felder is Chief Operating Officer
of Global Research, and is responsible
for the integration of Innovest sustainability
analysis into the Global Research
environment.