Conference Magazine - GoingPublic.de - Deutsches Eigenkapitalforum

Special: CSR
Sustainability is an investment issue
Shares must be selected based on a dynamic,
multi-dimensional analysis
The upheaval on the financial markets continues. What can
investors do in these turbulent times? Sustainable investment
is the name of the game – and not just in times of
crisis!
For a long time, those making sustainable investments
were regarded as a strange and exotic species among
investors and were mocked as idealistic “do gooders”.
However, the current lively global debate taking place in
society on the subject of sustainability has not passed the
financial markets by. For some years now, issues such as
global climate change have been penetrating the collective
consciousness of the financial world and this has increasingly
resulted in special forms of investment, a trend confirmed
by the high growth rates.
Talk of anachronistic trends or passing fads no longer has
any place in the current debate on every aspect of sustainable
investment. Sustainable investments have become an
established form of investment, combining the potential for
economic returns with ethical, social and ecological
motives.
Indeed, in the longer term, investors will not have to forego
their returns, as the example below illustrates. A com -
parison of the Global Challenges Index and the MSCI World
Index reveals that sustainable investments have not underperformed
traditional share investments.
Figure 1: Comparison – GCI vs. MSCI World
Indexed in EUR
110.0
100.0
90.0
80.0
70.0
60.0
50.0
40.0
Sep 07 Mar 08 Sep 08 Mar 09 Sep 09 Mar 10 Sep 10 Mar 11 Sep 11
GCI MSCI World
Source: Bloomberg, DZ BANK AG
Page 74 Deutsches Eigenkapitalforum 2012
Marcus Pratsch is Head of Sustainable
Investment Research at DZ
BANK AG. He has coordinated all the
Sustainable Invesmtent Researchrelated
activities in Institutional Equity
Research since 2009. Marcus is a
member of the Non-Financials Commission
of the Society of Investment
Professionals in Germany (“DVFA –
Deutsche Vereinigung für Finanzanalyse
und Asset Management”). He joined
DZ BANK AG in 2006, prior to which he
worked for equinet AG.
Choosing the right shares is vital
Marcus Pratsch, Head of Sustainable
Investment Research, DZ BANK AG
The information demanded by investors focusing on sustainability
differs from that of traditional investors, in that it
is far more complex. In tandem with aspects relating to the
pure economic returns, non-financial issues such as ecological,
social and governance aspects take centre stage.
These aspects account for a significant proportion of the
value, or goodwill, of a company from the longer term
perspective and consequently, they also affect the stock
market share price development.
Mar 12
Accordingly, sustainability ratings
may provide a good guide for choosing
suitable shares. Based on a comprehensive
analysis process, the
complex concept of sustainability is
summarised into a sustainability factor
or rating, which investors can use
to select their investment portfolio.
But wait! A sustainability rating is not
necessarily a guarantee of sustainability.
It all depends on the metho -
dology used for the rating. The prin -
ciple criticism of many of the sustainability
analysis models available on