German private bank Metzler hires MSCI as new ESG research supplier (Amended)

(Amends to reflect that Oekom remains a supplier)

Bankhaus Metzler, one of Germany’s oldest private banks and a signatory to the Principles for Responsible Investment (PRI), has hired MSCI as its new supplier of corporate ESG (environmental, social and governance) research.

Metzler conducted a recent search for a new ESG firm which both MSCI and its German rival Oekom Research participated in. Prior to the search, Oekom had been Metzler’s exclusive supplier.

MSCI won the mandate, which primarily covers ESG research for Metzler’s investment funds. However, Oekom will continue to supply the bank with ESG research on the institutional side. Said a Metzler spokesman: “In expanding our sustainable investment offering we have taken on MSCI for ESG screening of companies. Our relationship with Oekom is not affected now or in the future.”

Robert Haßler, Oekom’s Chief Executive, added: “We will even be intensifying our relationship with Metzler by, for example, holding a joint conference for church investors next year.”

According to MSCI, Metzler is now subscribing to its full suite of products. This includes tools for screening and rating a universe of 6,000 companies as well as the means to evaluate the impact of an ESG approach. Metzler administers and manages €62bn for institutional and private clients.

Regarding the ESG screening, MSCI said it had been mandated to in part employ faith-based exclusion criteria, including tobacco, alcohol, pornography, gambling, defence and weapons. Metzler counts several German church investors among its institutional clients.The mandate also calls on MSCI to clearly identify for Metzler companies that have breached international standards like the UN Global Compact or those of the International Labour Organisation (ILO). This ties in with Metzler’s decision a year ago to hire F&C Investments (now re-branded as BMO) of the UK as its engagement agent for a portfolio of equities and corporate bonds worth €12bn.

Said Rainer Matthes, Metzler’s Chief Investor Officer: “Responsible investment is an integral part of our strategy. “As an asset manager, we have a responsibility to honour international norms and standards such as the UN Global Compact to ensure we work towards a healthy and sustainable future.”

In related news, Oekom and GES, the Stockholm-based engagement agent, announced a further deepening of their three-year-old cooperation. In a statement, the partners said that Oekom’s corporate ratings would become the standard for GES’ clients, thereby replacing the Swedish firm’s own ratings.

In exchange, the nine analysts from GES who compiled the ratings would assist Oekom with its ratings. Oekom currently provides ESG research on more than 3,500 companies, including all companies listed on Stockholm’s exchange.

Said Haßler: “We’re very delighted that GES has switched to our ratings and that as a result, Scandinavian investors have direct access to them.”

Oekom says it has more than 100 clients and that its ratings are used to invest €600bn. GES says that through its ratings and active ownership operations, it influences more than €1trn in assets.