Sutor Bank and sustainability

To us, sustainability means looking ahead

Sustainably committed for over 100 years

Sutor Bank was founded in 1921 to help Hamburg merchants travelling overseas to preserve and protect their values at home. It is with this appreciation that we still operate today as a company in an increasingly globalised world.

It is a secure future based on tradition that we promise our partners, the foundations we support and our customers. That is why we feel obliged to make a sustainable contribution to a better, shared future with the activities of our company.

[Translate to English:] Die UN-Nachhaltigkeitsziele

The global sustainability goals of the United Nations
 

Sutor Bank's understanding of sustainability is based on the 17 global sustainability goals of the United Nations, also known as the Sustainable Development Goals (SDGs). They were adopted as "Agenda 2030" by the 193 member states of the United Nations on 25 September 2015 in New York and translated into the German government's sustainability strategy. They form an important orientation framework for us.

The ESG criteria as a standard for sustainable investments

In the financial sector, the so-called ESG criteria have become established as the standard for sustainable investments. These three letters describe three sustainability-related areas of corporate responsibility: The "E" (= Environment) stands for ecology and environmental protection, the "S" (= Social) for social responsibility and the "G" (= Governance) for good corporate management. The ESG criteria are also a model for Sutor Bank.

[Translate to English:] Grafik zur Bedeutung von ESG

We are in favour of using exclusion criteria for investments. This means that companies or even sectors that do not fulfil certain values can be excluded from investment. This approach has proven its worth in the financial sector.

 

Taxonomy Ordinance and Disclosure Regulation

The Taxonomy Ordinance contains a classification system for defining environmentally sustainable business activities in order to determine which investments are sustainable and which are not. The Disclosure Ordinance obliges financial service providers to be transparent and to provide sustainability-related information.

 

The sustainability ratings of the Sutor Portfolios

[Translate to English:] Unser Nachhaltigkeits-Siegel

Sustainability is important to us when implementing our investment strategies. As an additional quality assurance measure, we have our strategies regularly reviewed and thoroughly analysed by an independent institute. The Institut für Vermögensaufbau (IVA) carries out the ESG assessments of our portfolios for us. Nevertheless, we currently still classify our strategies as Article 6 products, as the data is still being compiled. The investments underlying these financial products do not take into account the EU criteria for environmentally sustainable economic activities.
 

IVA sustainability label for investment strategies

The IVA records the different sustainability ratings of its ESG rating agencies for a portfolio and makes them comparable. These results are then used to determine an overall ESG score that takes all sustainability criteria into account. The sustainability rating of the reviewed portfolio is then presented in the form of an ESG seal, which depicts the various rating categories using trees.

The rating categories of the IVA-ESG seal

Overview of the rating categories

Responsibility towards society, the future, our investors and our suppliers

As a bank, we are convinced that we can make an important contribution to a sustainable and therefore future-proof society. This is a responsibility that we gladly accept with the clear aim of helping to shape a future worth living.

As part of our investment advice and management, we do not engage in speculative trading transactions, categorically reject returns at any price, ensure that we only take as much risk as is absolutely necessary when investing and, where possible, focus on investments that take into account the principles of sustainability.

Our Supplier Code of Conduct applies to service providers, in which we set out our sustainability principles for collaboration: ensuring appropriate working conditions, minimising environmental impact and adhering to high ethical and moral business standards.

Where possible, we also link sustainability beyond asset management to the areas of technology, digitalisation, innovation and new markets. Digitalisation as a technological process, for example, helps us to use resources sparingly in our business operations. On the other hand, digital technologies will enable us to implement our sustainability principles even more efficiently.

Sutor Bank does not see itself as a financial institution that focuses exclusively on sustainable companies and sectors and is therefore 100 per cent sustainable. We are committed to the investment goals of our customers and for this reason always take into account the interplay of the four fundamental investment criteria: Security, liquidity, profitability and, of course, sustainability. These four components can compete with each other and influence each other. Personal preferences and an individual weighting of the components are reflected in the investment strategy that is right for the investor.

Our principles of sustainability

  • We are guided by internationally recognised sustainability goals, ESG criteria, guidelines and standards.
  • We ensure that our sustainability principles are firmly based on sound corporate governance.
  • We promote transparent communication and an open dialogue with our customers, service providers and employees.
  • We take care to harmonise economic success with ecological and social responsibility wherever possible.

Information on sustainability risks

Sustainable investments, like all other investments on the capital market, are not free of risks. Sustainability risks are events or conditions from the ESG areas of the environment, social affairs and corporate governance, the occurrence of which could have a negative impact on the value of the investment. These risks can affect individual companies as well as entire sectors or regions. For example, an increase in extreme weather events as a result of climate change could pose a risk (physical risk).
 

An example of this would be an extremely dry period in a particular region. This could cause the levels of transport routes such as rivers to fall to such an extent that the transport of goods could be impaired. In the social sphere, risks could arise, for example, from non-compliance with labour law standards or health protection. Examples of risks in the area of corporate governance include non-compliance with tax honesty or corruption in companies.
 

Our strategies for dealing with sustainability risks
 

Disclosures in accordance with Art. 3 para. 1 of the Disclosure Regulation (EU Regulation 2019/2088)
 

Inclusion of sustainability risks in our investment decision-making processes in asset management
 

As a bank, we want to make a contribution to a more sustainable, resource-efficient economy with the aim of reducing the risks and effects of climate change in particular. In addition to observing sustainability goals in our corporate organisation itself, we also see it as our task to sensitise our customers to sustainability aspects in the way they structure their business relationship with us.
 

Environmental conditions, social upheaval and/or poor corporate governance can have a negative impact on the value of our customers' investments and assets in a number of ways. These so-called sustainability risks can have a direct impact on the net assets, financial position and results of operations as well as on the reputation of the investment properties. As such risks cannot ultimately be completely ruled out, we endeavour to identify and, where possible, exclude investments in companies that have an increased risk potential.
 

Sustainability risks are taken into account in our investment decision-making processes primarily through the selection of financial instruments. As part of the product selection process, the investment committee responsible for product selection and investment strategies decides which financial instruments are to be included in the portfolios, taking specific product characteristics into account. We see specific exclusion criteria as a suitable way of implementing this requirement. We use the 10 principles of the UN Global Compact in conjunction with the OECD Guidelines for Multinational Enterprises on Responsible Business Conduct. This is based on a threshold value of 10 per cent. The protection of human rights, the abolition of child labour, the elimination of forced labour and the promotion of environmental awareness are thus always incorporated into investment decisions. Our data provider for all sustainability issues is ISS ESG.
 

We have set up an ESG Committee as a group of experts to consider sustainability issues. It is an interdisciplinary body in which members from various departments are represented. The ESG Committee monitors regulatory requirements, exchanges information, compares market practices, discusses implementation and change requirements and advises the Executive Board. The committee meets regularly. The results are recorded in minutes. The members of the ESG Committee receive training at least once a year in order to fulfil their duties.
 

Adverse sustainability impacts at company level
 

Disclosures in accordance with Art. 4 para. 1 lit. a) Disclosure Regulation (EU Regulation 2019/2088)
 

Consideration of the main adverse impacts of investment decisions on sustainability factors
 

Please refer to the PDF document ‘Statement on the main adverse impacts of investment decisions on sustainability factors’ below for our declaration pursuant to Art. 4 para. 1 lit. a) Disclosure Regulation.
 

Our remuneration policy in connection with the consideration of sustainability risks
 

Disclosures pursuant to Art. 5 (1) of the Disclosure Regulation (EU Regulation 2019/2088)
 

Inclusion of sustainability risks in our remuneration policy 

Sustainability is very important to us. We have therefore set ourselves the strategic goal of integrating environmental and social aspects into the long-term development of Sutor Bank. We ensure that the remuneration of our managers and employees is in line with this objective. Our remuneration does not incentivise us to take sustainability risks. In addition, we support the corporate objectives by taking sustainability aspects into account in the target agreements for the variable remuneration of relevant managers and employees.
 

Our company's strategies for incorporating sustainability risks are also incorporated into our internal organisational guidelines. Compliance with these guidelines is decisive for the evaluation of our employees' work performance and therefore has a significant influence on future salary development. In this respect, the remuneration policy is in line with our strategies for incorporating sustainability risks.

 

Transparency in the consideration of sustainability risks
 

Disclosures in accordance with Article 6 of the Disclosure Regulation (EU Regulation 2019/2088)
 

Results of the assessment of the impact of ESG risks on returns
 

The consideration of a large number of different sustainability risks should reduce the sustainability risk with regard to individual assets and our portfolios as a whole and may therefore have a neutral to positive effect on the expected return. It cannot be completely ruled out that sustainability risks may nevertheless have a negative impact in individual cases. We currently only sell Art. 6 products.

Updated on 13/09/2024