Passion for Swiss equities
zCapital systematically takes environmental, social and governance aspects into account when investing. The Integration of Environmental, Social and Governance (ESG) analysis is done at company level and aims to identify sustainability related risks and chances. Risks should be avoided, or if avoidance is not possible, mitigated and managed. Shares of companies with higher ESG risks are likely to experience higher volatility and possibly weaker share performance in the longer term.
zCapital aims to comprehensively analyse a company's sustainability profile. Therefore, an ESG monitor has been developed which takes into account data from Inrate, ISS, MSCI, RepRisk and Glassdoor, among others. In addition, zCapital collects its own data.
zCapital bases its exclusion criteria on the guidelines of the SVVK (Swiss association for responsible investments). Currently, manufacturers of controversial weapons are excluded.
The zCapital Swiss ESG Fund is able to undertake further exclusions. Companies whose conduct or products fundamentally contradict the ESG concept are excluded. Currently, these are companies which significantly violate the principles of the UN Global Compact or generate more than 5% of sales with the production of nuclear or coal-fired power, coal mining, fracking, oil sands, tobacco, pornography, gambling, armaments or civilian weapons.
In the course of shareholder engagement, zCapital aims to engage with companies and raise shareholder concerns. Through concrete recommendations and exertion of influence, corporate strategy is to be scrutinised and relevant ESG aspects addressed. The aim is to motivate companies to act in a sustainable manner.
zCapital maintains a constructive dialogue with companies in the Swiss equities investment universe, usually with management. If necessary, members of the board of directors are contacted, written enquiries are made, the opportunity to speak at the general meeting is used or requests for items to be included on the annual general meeting agenda are submitted.
zCapital does not lend securities and always has the shares entered in the share register. Voting rights are exercised systematically. Voting decisions are subject to internal guidelines. Voting recommendations by Inrate and ISS, corporate governance analyses by ISS and Inrate as well as analyses by internal investment specialists are available as information tools.
On this basis, votes are exercised according to the longer-term interests of the company and the shareholders. In addition to financial aspects, ESG criteria are also taken into account. A summary report on the exercise of voting rights is published in the annual report of the zCapital Funds.