Acting sustainably in all areas is becoming increasingly important for financial service providers. This is evidenced by MainFirst's first sustainability report. By voluntarily publishing this report, the multi-investment boutique clearly demonstrates its awareness of its social responsibility and the fact that sustainability is one of its key priorities. The sustainability report also shows that transparency is extremely important to the active asset manager.
The sustainability report: for larger companies, it is mandatory; for MainFirst, it is an expression of its own identity. It is also the logical consequence of a process that has been underway for years: since signing the UN PRI in 2015, MainFirst has incorporated environmental, social, and governance (ESG) principles into its investment decisions. In terms of implementation, MainFirst differs from other asset managers in this regard. The multi-investment boutique has not established a separate ESG team. Instead, ESG has become an integral part of every team - whether in Portfolio Management, Risk Management or the Executive Board.
MainFirst has managed to square the circle: because MainFirst has been able to meet stakeholders' requirements through its multi-boutique approach. Depending on the investment universe and strategy, the approach of the investment teams may differ. What they all have in common is their interaction with the companies in which they invest. For example, the typically rather poor availability of ESG-related data in small & mid-caps and in emerging market companies can be improved by the teams through collaborative engagement and direct dialogue processes. In contrast, for more transparent investment universes, the aspect of portfolio construction based on ratings data is of higher importance.
The success proves MainFirst's approach to be right. ESG rating providers have already analysed and positively assessed some of MainFirst's products. For example, four funds received the prestigious FNG label, a seal of quality for sustainable investment funds in the German-speaking world. In addition, some strategies have an Article 8 classification as ESG products under the SFDR. However, MainFirst is not resting on its laurels - on the contrary, the forward-looking asset manager intends to integrate ESG even more strongly in further funds and is also striving to achieve the corresponding classifications and labels for these products.
In-house expertise complemented by specialised research
MainFirst's sustainable focus is in line with the company's philosophy: as a comparatively small investment boutique, in-house expertise is extremely important. Each team developed its own authentic approach, which is complemented by external research. Here, too, the investment culture is reflected: in addition to its partner Sustainalytics, a leading global research and analysis company for environmental, social and governance issues, MainFirst works closely with specialised and innovative providers. For example, MainFirst participates in the CDP initiative to improve data quality and cooperates with Right. based on science. The company provides a model to better classify the carbon footprint of companies and uses this data to limit global warming, as should be the goal since the UN Climate Change Conference in Paris.
ESG integration and performance generation are not mutually exclusive
During the past year, MainFirst has shown that the integration of ESG factors and good performance can absolutely go hand in hand: all of MainFirst's equity funds outperformed their respective benchmarks in 2020 - regardless of their investment universe or individual approach. As a result, MainFirst moved into the top 10 of its peer group for the first time in the asset manager rankings of analyst firm Scope, and now occupies fourth place in the top ranking of small companies.