Glossary

Sustainable investments

Sustainable investments are classified in accordance with the EU SFDR regulation, Article 2 (17). A company is considered sustainable if it makes a positive contribution to at least one of the 17 Sustainable Development Goals of the United Nations (UN SDGs) while upholding the “do no significant harm” principle and good corporate governance practices.

Engagement

Portfolio managers are engaged in an active and constructive dialog with company representatives in selected ESG areas in an effort to improve qualitative or quantitative measures of sustainability.

ESG

ESG stands for Environment, Social and Governance. ESG refers to non-financial factors and criteria that are taken into account during the investment process and can have a significant impact on the financial performance of portfolios.

ESG exclusions

Companies involved in severe controversies concerning the environment, human rights and business ethics are excluded. Compliance with the principles and guidelines of the UN Global Compact, the UN Guiding Principles on Business and Human Rights and the standards and rights of the International Labor Organization serves as a measure of sustainability. Values-based exclusions exclude companies that exceed certain revenue thresholds in controversial business areas. Exclusions are made on the basis of MSCI ESG data.

ESG Coverage

Shows the respective ESG research coverage as measured by the weighting of individual securities in the portfolio.

ESG Integration

The relevant industry- or company-specific ESG factors are integrated into the fundamental analysis. Environmental, social and governance aspects are thus taken into consideration during the fundamental analysis of securities and in the investment process.

MSCI ESG Rating

The MSCI ESG rating evaluates companies based on environmental, social and corporate governance factors that can have a material impact on the sustainability risks of a particular industry. MSCI ESG rating scores range from "leader” (AAA, AA) to "average" (A, BBB, BB) to “laggard" (B, CCC). Note: Because ESG rating methodologies can lead to the systematic underrating of certain companies or industries, portfolio managers can, in justifiable cases, invest in apparent "laggards".

Sustainable characteristics

The Fund takes social and environmental characteristics into consideration. These basically comprise the following elements: 1) Severe controversies involving global norms are excluded; 2) Very severe ESG controversies are excluded; 3) Values-based investment exclusions based on maximum revenue thresholds; 4) ESG integration; 5) ESG stewardship through constructive corporate dialog (engagement) and the exercise of voting rights (proxy voting).

UN SDG

Using the MSCI SDG alignment methodology, qualitative assessments are made and scores assigned with respect to each of the 17 UN SDGs. The business activities, operations, practices and products of a company are evaluated based on their contributions to the UN Sustainable Development Goals, resulting in an aggregated score for each UN SDG (+10 to - 10, with +2.0 or higher indicating a positive goal contribution and -2.0 or lower indicating a negative goal contribution).

Proxy Voting

Portfolio managers represent the long-term interests of our investors by actively exercising the voting rights of our portfolio companies through proxy voting. Voting recommendations issued by independent sustainability consultants and proxy advisors will be taken into account. However, it is possible to deviate from third-party voting recommendations if, in our view, they are not aligned with the best interests of investors.

UN PRI

Principles for Responsible Investment (UNPRI or PRI) is a United Nations-supported international network of financial institutions working together to implement its six aspirational principles. Its goal is to understand the implications of sustainability for investors and support signatories to facilitate incorporating these issues into their investment decisionmaking and stewardship practices. In implementing these principles, signatories contribute to the development of a more sustainable global financial system. Bellevue Asset Management AG is a signatory since August 2019.

PCAF

PCAF (Partnership for Carbon Accounting Financials) is a global initiative that helps financial institutions measure and disclose the greenhouse gas (GHG) emissions associated with their loans and investments. It provides a standardized framework for assessing financed emissions, enabling banks, investors, and asset managers to track their climate impact and align with net-zero goals. The PCAF methodology supports transparency and accountability in sustainable finance.

GRI

The Global Reporting Initiative (GRI) is a globally recognized framework that supports all types of organizations (companies, governments, and non-governmental organizations) in their sustainability reporting. Among other things, the guidelines include KPIs that make environmental, economic, and social performance measurable.