The experience of Etica Funds goes abroad. On 8 and 9 June 2022 the Pan-Iberian Fund Forum was held it Madrid. It was organised by Evenco International, a company that proposes events dedicated to the private equity and asset management sector in Europe, the United States and Latin America.
This exclusive conference was attended by professionals from the most important international asset management companies, institutional investors and asset management professionals.
Presentations, debates and exchanges of ideas were at the centre of the congress, which gave wide room also to the subject of alternative investments, thematic funds and, in general, to sustainability.
The experience of Etica Funds in sustainability
Etica Funds, represented on the occasion by Arianna Magni, Head of Institutional and International Business Development, Gianluca Zappa, Institutional and International Business Development, and Elisabetta Villa, Investment Specialist, presented its more than twenty years of experience in sustainable and responsible investments.
During the conference, Elisabetta Villa also illustrated the commitment that Etica Funds made in the context of sustainable investment, long before it became a mainstream subject: that is as a promoter of social and economic progress that puts itself in the front line to contribute to the environmental transition and that aims to collect capital to improve the ESG impact of companies in which the funds and the sub-funds invest.
In this context, Etica Funds forms part of the framework of ethical finance, called upon to assume an active role in the real economy, for the purpose of promoting a shift, including a “cultural” one, towards more sustainable and responsible economic models.
“Modern” for twenty-two years
Etica Funds, since 2000, the year it was founded, has been creating and promoting 100% sustainable and responsible investments. It was in fact the first and only asset management company in Italy to focus exclusively on sustainable investments and among the first, in 2006, to sign up to the six principles (SRI) of the United Nations for promoting the spread of sustainable and responsible investment among institutional investors.
The company’s experience is rooted in the Articles of Association, where we can read that the mission is “to represent the values of ethical finance in the financial markets, raising the awareness of the public and financial operators in relation to socially responsible investments and corporate social responsibility”. In 2015 Etica Funds signed up to the Montreal Carbon Pledge, undertaking to measure and report every year the carbon footprint of its funds, that is to calculate the emissions of greenhouse gases attributable to the products.
Etica Funds selection
Etica Funds has shown that, through a rigorous ESG analysis, it is possible to add value to investments, in terms of risk-return and of positive effects in the real economy in the long term. With its holistic approach, Etica Funds bases its choices embracing all three ESG pillars: environment, society and good governance.
Today Etica Funds collects managed savings for a value of almost € 7.5 billion of assets and can count on approximately 500 thousand clients that invest in its funds.
The EticApproach ESG methodology
For selecting the issuers in which its funds invest Etica Funds makes use of a proprietary methodology (ESG EticApproach). It is made up of two steps.
The first provides for the application of negative criteria, which exclude that is from the investment portfolio issuers considered to be controversial. For example, stocks of companies that operate in sectors or that perform activities that generate significant negative impacts on the community and
on the environment (such as fossil sources, nuclear energy, armaments, tobacco, etc.) or States that do not respect fundamental human rights are excluded. Etica Funds then applies positive criteria, selecting only stocks that exceed a certain level of ESG performance, on the basis of specific analysis models.
Institutional investor offering
Sustainable and responsible investment solutions proposed by Etica aim to deliver medium-long term performance opportunities based on the real economy and rewarding businesses and countries that adopt virtuous environmental, social and governance practices (ESG).
Institutional investors (including banks, brokerages, SGRs, insurance companies, investment funds, SICAVs, pension and insurance funds) have access to the Luxembourg Range and to the Italian Range. For more information please refer to eticasgr.com/en/institutional-clients.
The ESG Risk
Etica Funds has also developed the ESG Risk, a proprietary metric for measuring ex ante the risk deriving from ESG factors. A study published on Wiley (Forecasting volatility by integrating financial risk with environmental, social, and governance risk) notes that an ESG assessment of the risk makes it possible to mitigate and reduce the unforeseen volatility of a portfolio in the medium-long term.
Measuring the ESG Risk therefore provides investors and fund managers with a very useful tool in decision-making processes. A real and proper “second lens” that makes it possible to “see better” financial volatility, above all in the long term and that contributes to optimising the diversification of the portfolio.
For Etica Funds it is essential to make the opportune assessments on the businesses in which its funds invest, combining assessments of an ethical, social and environmental nature, in order to direct savings towards sustainable objectives, increasingly in keeping that is with the needs of the world in which we live.