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ESG Portfolio level

Sustainability at portfolio level

ESG criteria are systematically integrated into investment processes and portfolios, while taking regulatory requirements into account.

Bellevue addresses sustainability at portfolio as well as corporate level. The individual sustainability approaches are summarized as part of our ESG framework, which we systematically implement and continuously develop.

Source: Bellevue Asset Management AG, as at December 31, 2022

The ESG investment guidelines of Bellevue Asset Management AG essentially comprise the following elements:

Exclusion criteria

We are committed to adhering to internationally recognized norms and systematically exclude from the managed investment portfolios any companies that seriously violate human rights, the environment or labor norms, or are involved in corruption. No investments may be made in companies that are implicated in serious environmental, human rights and business ethics issues. Compliance with the principles and guidelines of the UN Global Compact and the UN Guiding Principles for Business and Human Rights, as well as the standards and rights of the International Labour Organization, serves as an indicator in such cases.

In contrast to exclusions based on violations of global principles and standards, value-based exclusions are founded on social, ethical or moral values. Thresholds have been defined for the percentage of overall revenues that can be generated from business areas with high ESG risk scores such as conventional weapons, thermal coal and tobacco production. Companies that exceed the generally accepted annual revenue thresholds in the business areas below are excluded.

Business area


Revenue threshold

Controversial weapons



Conventional weapons



Thermal coal



Fracking/oil sands



Production of tobacco



Sale of tobacco



Adult entertainment






Palm oil



Compliance with these revenue thresholds is systematically reviewed, even though in the case of most strategies – particularly healthcare – there is no involvement in these business areas. The set revenue thresholds serve primarily for the practical implementation of the exclusion criteria and are based on empirical values with institutional investors and industry experts. More far-reaching and/or stringent exclusion criteria may be applied for individual strategies with a dedicated sustainability focus.

Bellevue Asset Management maintains an exclusion list, which is updated on a quarterly basis. Based on this list, nearly 900 companies from across our investment universe were excluded from direct investment as at the end of 2022.

ESG integration

Environmental, social and governance factors are integrated into the fundamental analysis of every company through an ESG integration process in which the associated financial risks or opportunities are evaluated with respect to future stock market performance. This approach gives our portfolio managers a holistic picture of an enterprise.

The environment sub-category focused on aspects such as whether a company systematically measures its carbon footprint and discloses the related data. The Social subcategory covers aspects such as product quality, data privacy policies and employee development. Examples of Governance issues are board independence, board compensation and corporate ethics.

A system of ESG ratings forms the basis by which sustainability criteria are integrated into the asset manager’s investment decision process. Every issuer of securities in its investment universe is assigned an ESG rating based on various sub-scores. These scores are based on data from independent third-party providers MSCI ESG Research and Morningstar Sustainalytics. Their relevance, and consequently their weightings, can vary sharply depending on the sector in question.

In 2022 it was once again important to interpret ESG scores with caution and a critical eye. Most ESG rating methods are based on a predefined systematic approach that does not always result in an objective or «fair» assessment of risks. In fact, such methods often systematically disadvantage start-ups and small cap companies relative to large cap companies. A lack of manpower and experience in handling ESG issues can result in a company being underrated. That is why our portfolio managers always take a closer look at potential or ostensible «ESG laggards» (CCC, B rating) and reach out to the ESG specialists at our external ESG research providers and at the companies with lagging ESG ratings. Investments in «ESG laggards» must be documented in detail. Bellevue Asset Management does not apply a «best-in-class» approach for the reasons mentioned above, unless otherwise dictated by a specific investment strategy.

Across all liquid investment strategies5) of Bellevue Asset Management, this gives the following distribution of invested assets based on MSCI ESG ratings:

Distribution by MSCI ESG rating as at December 31, 2022

Source: Bellevue Asset Management, MSCI ESG Research

5) Net invested assets of equity and fixed-income strategies of Bellevue Asset Management excluding cash, private equity, ventures, PF and white label funds/mandates and dedicated derivative strategies.

ESG stewardship

As a responsible long-term investor, Bellevue supports all measures and moves designed to increase the value of portfolio companies over the long term in the interests of shareholders and investors. This includes engagement activities as well as the exercising of voting rights at general meetings of shareholders.


Active management means investing with conviction. We know what we are investing in, and pursue this with great discipline. At Bellevue Group you will not find any overarching investment committees or a CIO. Working independently in their own product areas, the relevant specialist teams are all committed to personal responsibility, respect, and the strength of their own vision. As well as being investment experts, our employees are simultaneously entrepreneurs who participate in the success of clients through their own investments.

This commitment to active investment management also highlights the importance of engagement as a key element in our ESG framework. Portfolio managers are engaged in an active and constructive dialog with the executives and other relevant stakeholders of portfolio companies on environmental, social and governance issues. If there are any indications of a significant controversy related to ESG issues, they are constructively discussed with the company and subsequent developments (e.g. change in strategy or processes, improvement of ESG rating) documented over time. Engagement activities are undertaken in the context of materiality and proportionality considerations. The level of engagement can vary depending (among other things) on the size of the position held by an investment strategy, the market capitalization of the company, and the entity’s stage of corporate development.

Written records of ESG engagement activities are maintained as part of the regular documentation of conversations with company representatives. In 2022 we also established a proprietary tool in which ESG engagement activities are systematically recorded and subsequent developments documented over time.

22 new ESG engagements were launched in the 2022 financial year. These may affect one or more of the three sustainability criteria of environmental, social and governance, and may be either of a short to medium-term nature or long-term. As a substantial portion of the investments in companies from the healthcare sector are invested in the US, a majority of the engagement activities also occurred in this area.

Breakdown of ESG engagements by sector

Breakdown of ESG engagements by region

Breakdown of ESG engagements by ESG criteria (multiple answers possible)

Selected ESG engagement case studies show that our portfolio managers and analysts maintain a very close exchange of views with the companies and through constructive dialog endeavor to bring about the best possible corporate performance in terms of sustainability criteria too. Qualified opinions of third parties such as independent voting-rights representatives are included in the process, although ultimately we always act in the interests of our investors.

Engagement case: Example 1 – PacificBiosciences (US)

Whereas Europe plays a pioneering role in terms of sustainability reporting and transparency requirements, the issue is not yet accorded such a high priority in other markets. Indeed it is not unusual for many US companies to have only recently begun to address sustainability reporting in greater detail.

Details of the engagement

With an MSCI ESG rating of B («Laggard»), PacBio had a below-average sustainability rating at the start of our ESG engagement. On November 8, 2021, we then embarked on an extremely constructive dialog with Christian Henry (CEO) and Todd Friedmann (IR); analysis of the research report from MSCI ESG showed that the ostensible laggard rating was not attributable to poor ESG quality standards but primarily to a lack of sustainability reporting. On 6 December 2021, PacBio informed us that the company had hired an ESG consultant. The top priority was to set up a sustainability website and produce a sustainability report. On February 9, 2022, PacBio confirmed that it had started internal work on its ESG transparency processes as a result of our bilateral exchange of views and engagement. On May 11, 2022, PacBio notified us that the first sustainability report would be published over the course of summer 2022.


PacBio’s first sustainability report can now be viewed at We are convinced that this is an important step towards greater transparency, as well as strengthening awareness of ESG, and that such efforts are also likely to be reflected in future rating upgrades (now rated BB).

Proxy voting

Bellevue Asset Management also protects the long-term interests of its investors by making active use of its voting rights at the general meetings of shareholders of the companies in its portfolios via proxy voting.

We are supported by International Shareholder Services (ISS), which has many years of experience in relation to proxy voting and employs market-leading practices. However, we are under no obligation to abide by the voting guidelines issued by ISS. Bellevue Asset Management may go against the voting recommendations of third parties if it determines that these are not in the best interests of the investors. As a rule, voting rights are always actively exercised.

We generally vote in line with the recommendations of company boards regarding agenda items that will not have a material impact on the long-term development of the company in question. Agenda items that we believe could have a material impact on the long-term development of the company will be examined in detail before deciding how to vote. Below are typical examples of such items:

The responsible portfolio managers will conduct this analysis. The analysis is based on the currently available information from various sources such as analyst reports or media releases and other reports published by the company itself.

Voting rights can be exercised directly through active participation in a general meeting, via an online voting platform, or through one or more representatives/proxy advisory firms.

Overview of voting activities in 2022:

In 2022 our portfolio managers and analysts attended 583 general meetings and cast their votes on a total of 898 resolutions out of a possible 910 – representing a participation rate of 98.7%. This figure can be below 100% because some markets require an equity blocking period in connection with voting, which would in turn restrict trading in the securities concerned. In order to maintain portfolio liquidity, however, no voting takes place in such cases.

Detailed information on voting behavior can be found in the following evaluations:

Meeting overview







Number of votable meetings






Number of meetings voted






Number of meetings with at least 1 vote against, withhold or abstain






Ballot overview







Number of votable ballots






Number of ballots voted






Proposal overview







Number of votable items


7 069




Number of items voted


6 938




Number of votes FOR


5 612




Number of votes AGAINST






Number of votes ABSTAIN






Number of votes WITHHOLD






Number of votes on MSOP






Number of votes with policy


6 810




Number of votes against policy






Number of votes with management


6 060




Number of votes against management






Number of votes on shareholder proposals






Engagement case: Example 2 – service provider (advertising, marketing, social research) (France)

Engagement case: Example 2 – service provider (advertising, marketing, social research) (France)

During the main reporting season, it is not unusual for Bellevue Asset Management analysts and portfolio managers to maintain a dialog with the portfolio companies in parallel with the exercising of voting rights.

Details of the engagement

In April 2022 various minority shareholders representing a total of fewer than 5% of the voting rights proposed the nomination of A. Z.* as an independent member of the executive board at the next annual general meeting in mid-May 2022. This was with the aim of improving the company’s governance structure. Although we share the view that governance at the company in question needed to be improved further, following a personal exchange of views with the proposed candidate we were not fully convinced by his profile. We also shared some of the concerns of the minority shareholders, even if in some cases they were clumsily worded. We reported this to the company, as represented by the CEO, CFO and IR. ISS advised voting for the appointment of A. Z.*; however, we voted against the nomination.


In May 2022 the nomination of A. Z.* was rejected, to our satisfaction. Nevertheless, the fact that the governance criticisms expressed had now been identified and addressed by the company management was a significantly positive development. In an initial step the CEO/chairman role was split; in addition, a new CFO was appointed.

* Abbreviation arbitrarily chosen.

Climate change factors

Carbon intensity (tonnes of CO2 per USD 1 mn of revenues) is regularly measured at portfolio level and scored based on the relevant investment universe or fund benchmark. It should be noted that over 85% of our asset base (as at December 31, 2022) is invested in the healthcare sector, which is naturally exposed to substantially lower carbon emissions than industrial, commodity or energy sectors and broadly diversified global equity indices.

For instance, the five largest investment strategies6) show an asset-weighted carbon intensity (scope 1 + 2) of 24.4 tonnes of CO2 emissions per USD 1 mn of revenues. According to the five-stage scale of MSCI ESG6), this represents the second-best category of “Low”. By way of comparison, the MSCI World equity index shows a weighted average carbon intensity of 138.2 tonnes per USD 1 mn of revenues, which is classed as «Moderate».

Calculated across all Bellevue Asset Management’s liquid investment strategies, asset-weighted carbon intensity (scope 1+2) is around 32.8 tonnes of CO2 per USD 1 mn of revenues.

If a security contributes 10% or more to the intensity of the overall portfolio or the carbon intensity of a particular security is 10% or more than the comparable industry average, we pay particular attention to the principal adverse impacts on sustainability criteria (PAIs) – which can culminate in an engagement.

6) BB Biotech AG, Bellevue Medtech & Services (Lux), Bellevue Healthcare Trust, Bellevue Digital Health (Lux), Bellevue Healthcare Strategy (Lux)
7) These figures are based on MSCI CarbonMetrics and are calculated as the portfolio-weighted average carbon intensity of the companies. At company level, carbon intensity is the ratio between scope 1 and 2 emissions and annual revenues. The carbon risk is classified as very low (0 to <15), low (15 to <70), moderate (70 to <250), high (250 to <525) and very high (>=525).

ESG reporting

Bellevue Asset Management AG became a signatory of the United Nations Principles for Responsible Investment (UN PRI) on August 19, 2019. PRI reporting is the largest global reporting project on responsible investment. It was developed with investors, for investors. Reporting on our activities and progress in relation to sustainability is one of the six principles of the UN PRI.

We fulfil our responsibilities in relation to ESG reporting via the following channels:

As well as information on portfolio positioning and performance, our monthly fact sheets also include summarized ESG data. We will be expanding our reporting in the first half of 2023 and making dedicated sustainability fact sheets available to our investors.

On our website at we have created a special page focused on sustainability at both corporate and portfolio level. Advances and news on sustainability matters are posted here on a continuous basis. Information regarding the regulatory requirements (EU SFDR/MiFID II sustainability preferences) is also provided here.

The UN PRI Report is published annually. This report ensures accountability and transparency regarding the responsible investment activities of the signatories and aids dialog between the signatories’ organizations as well as with their clients and other stakeholders. The latest report can be viewed on our website.

An ESG report for each investment strategy is submitted to the Group Executive Board and the Board of Directors at least once a quarter. The report is assessed by these bodies and used to derive any targeted measures.

Strategies with a sustainability focus – brief profile

Bellevue Sustainable Healthcare (Lux)

Bellevue Sustainable Entrepreneur Europe (Lux)

Implementation of regulatory requirements

The extension of sustainability-related regulatory requirements has created additional obligations. The focus here is on the EU Disclosure Regulation 2019/2088 (regulatory product disclosures, Art. 10) and on Commission Delegated Regulation (EU) 2021/1253 on MiFID II sustainability preferences (Art. 9). In this connection, Bellevue has introduced the two criteria of “investments with sustainable characteristics” and “sustainable investments” and – in the absence of a standard Europe-wide classification system – implemented them in the investment process of the respective strategies with the greatest of care and in good faith based on currently available knowledge and the partially limited availability of data.

Investments with sustainable characteristics (EU SFDR)

All investment strategies of Bellevue Asset Management take into account social, environmental as well as governance-related characteristics (ESG) as part of the implementation of their investment objectives, in accordance with the provisions of Article 8 of the EU Disclosure Regulation 2019/2088 (EU SFDR), but do not have sustainability as their objective. In principle, the aim is to invest all of the assets of the relevant strategies in investments with sustainable characteristics. However, as there is not yet a sufficient amount of ESG data available in every asset class and sector, and given that some companies do not yet have an ESG rating, a minimum allocation of investments with sustainable characteristics has been set as a percentage of total invested assets.

For strategies with a considerable allocation of small and mid cap investments and/or a significant emerging market quota with low ESG research coverage, the minimum allocation for «investments with sustainable characteristics» is 50%. Strategies that are less heavily affected by these factors must adhere to a higher minimum allocation of 75% «investments with sustainable characteristics».

Detailed information on the individual investment strategies as well as the methodology can be found in the product-specific documents available via the following link:

Sustainable investments (MiFID II)

With the amendment of the MiFID II Directive as part of the implementation of the EU Action Plan on Financing Sustainable Growth, it became mandatory from 2 August 2022 to inquire as to clients’ sustainability preferences during the investment advisory process. Financial instruments that may target (potential) clients with sustainability-related objectives according to Art. 9(9) sub-para. 1 MiFID II Delegated Regulation are required to apply one or more of the following three concepts:
a)   A financial instrument where the (potential) client determines that a minimum proportion is to be invested in environmentally sustainable investments within the meaning of the Taxonomy Regulation (Art. 2(1))

b)   A financial instrument for which the (potential) client determines that a minimum proportion shall be invested in sustainable investments within the meaning of the Disclosure Regulation 2019/2088 (Art. 2(17))

c)   A financial instrument where the principal adverse impacts on sustainability factors («PAI») are taken into account and where the qualitative or quantitative elements demonstrating this consideration are determined by the (potential) client

In addition to consideration of the principal adverse impacts on sustainability factors (PAI), Bellevue Asset Management has determined that a minimum proportion shall be invested in sustainable investments within the meaning of Disclosure Regulation 2019/2088 (Art. 2(17)). Art. 2(17) defines a «sustainable investment» as an investment in an economic activity that contributes to the achievement of an environmental and/or a social objective while not significantly harming any of these objectives. Furthermore, the investee companies must apply practices of good corporate governance («good governance»).

Investments are assigned to the «sustainable investment» quota if, on the one hand, they exhibit a positive target contribution in terms of the 17 UN Sustainable Development Goals and, on the other hand, they meet the described sustainable investment characteristics. The MSCI ESG methodology is used to measure the target contributions to the UN SDG (see section on relationship to UN SDG). Minimum quotas of 25% and 50% have been defined for the categorization of a sustainable investment. Here too, the existing ESG research coverage as well as the investment focal point (e.g. small and mid-caps) play an important role.

In accordance with the above definitions and applied methodologies, around 87% of the liquid net invested assets8) of Bellevue Asset Management qualified as «investments with sustainable characteristics» and 54% as «sustainable investments» in the context of the EU SFDR as at December 31, 2022:

8) Net invested assets of equity and fixed-income strategies of Bellevue Asset Management excluding cash, private equity, ventures, PF and white label funds/mandates and dedicated derivative strategies.

It should once again be pointed out that an industry-wide comparison of these allocations is not permitted owing to the current lack of harmonization in the classification grids and valuation methodologies to be used in the context of the EU SFDR.

Principal adverse impacts on sustainability factors (PAI)

Bellevue Asset Management takes the principal adverse impacts (PAI) of its investment decisions into consideration in the course of its investment and portfolio management activities. Implementation may take place through direct decisions within portfolio management, company exclusions, targeted engagements or a combination of the described activities.

Consideration of the principal adverse impacts largely depends on the availability of relevant information. The necessary data is not always available in sufficient quantity and quality for all assets in which Bellevue Asset Management invests. Consequently, the list of PAI indicators considered is continuously being expanded in line with data availability and quality.

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