German asset management body produces responsible investment position paper

German asset management association BVI has produced a position paper on responsible investment, which, among other things, says its members exclude “internationally outlawed products” and back the “further development” of such relevant charters as the Principles for Responsible Investment (PRI).

The paper marks the first time Germany’s asset management industry as a whole has given its view on responsible investment. Until now, each asset manager in Germany has dealt with the issue independently.

Hence, more proactive BVI members, including Union Investment (owned by German co-operative banks), Deka (owned by German savings banks), Allianz Global Investors (AGI) and Deutsche Asset and Wealth Management (DeAWM) have taken such steps as banning investments in cluster bombs or signing up to the PRI.

But other members have not gone nearly as far. Only 19 asset managers in Germany, including the aforementioned, have embraced the PRI; in the UK, by contrast, 102 houses have done so.

Given these developments, a majority of the BVI’s board and its managing director, Thomas Richter, decided to create a working group to draft a common position.Claus Gruber, an expert on responsible investment at DeAWM, and Matthias Stapelfeldt, head of responsible investing at Union, were named as the coordinators of the group.

But one industry figure has called it a “lowest common denominator” document. For example, the paper states that it is “the investor alone” who decides if a fund fulfils his ethical and moral values. There is no mention either of environmental, social and governance (ESG) criteria under “fiduciary duty”.

And at the end of the document, the paper mentions that the BVI’s 78 members “voluntarily commit themselves to informing their clients about the extent they invest responsibly.” It goes on to say that fund providers may decide themselves which funds they call “responsible” or “sustainable”.

Although the paper was drafted last November, the BVI did not disclose it to the press at the time. Rather, RI obtained a copy from industry sources. Said one: “The paper may not be a watershed, but at least it’s progress in that BVI’s members tried to come up with a common position. In this case, it’s the lowest common denominator.” Link