DekaBank, the asset manager-investment bank hybrid owned by German savings banks (Sparkassen), plans to phase in an exclusions-based “sustainability filter” for its own €19bn investment portfolio from July 1.
The filter comes from Imug, the Hanover-based ESG (environmental, social and governance) research firm that is a partner of EIRIS in the UK. According to DekaBank, firms that will be filtered out include any that are involved in making cluster bombs or land mines, guilty of repeated environmental offenses, systematic corruption, or those that do little to prevent violations of International Labour Organisation (ILO) standards.
DekaBank’s investment universe in this case comprises 2,600 firms that Imug, via its partnership with EIRIS, can provide research on. The filter will not be immediately applied to all of the €19bn worth of investments, but instead be phased in when the bank makes new investments of between €5bn and €6bn each year.DekaBank declined to provide much detail on how the €19bn – which includes the bank’s reserve fund as well as excess liquidity – is currently invested, saying only that it purchased “investment-grade securities.” This likely refers to government and corporate bonds, the preferred choices for German banks and insurers.
DekaBank’s embrace of sustainable investing for its own assets comes almost two years after it signed up to the Principles for Investment (PRI). Yet even before it became a signatory, the bank, which runs €170bn in assets for private and institutional clients, had several sustainable funds on offer. Three of these funds, one for equities, one for bonds and a balanced product, also draw their ESG research from Imug.
At last count, DekaBank’s sustainable funds had €2.2bn invested in them. This compares with near €5.1bn for Deutsche Asset and Wealth Management, Deutsche Bank’s fund unit and €7bn for Union Investment, the market leader in Germany.