The EU wants to impose a sustainability scheme on asset managers. The money industry is already preparing. Stanislaus von Thurn und Taxis for the benefit of the climate protests and setting the course for politics.
Stanislaus Prinz von Thurn und Taxis (32) recently became Head of Sustainability Research (ESG) at asset manager Flossbach von Storch AG in Cologne. He started there in 2017 as an equity analyst after working for a London hedge fund and the German private bank Berenberg. The economist studied in Maastricht, Prague and London.
WirtschaftsWoche: Prinz von Thurn und Taxis, do your fund manager colleagues at Flossbach von Storch have to change a lot in the depots in order to take greater account of the risk of climate change?
Von Thurn und Taxis: Sustainability is not new to us, it has always been part of our investment process. Therefore, the topic is already reflected in our portfolios. A company can only be sustainably successful if it serves its customers properly, motivates its employees, treats its business partners fairly, invests adequately, pays taxes and does not cause any environmental damage. In addition to good corporate governance, ecological and social issues are prerequisites for long-term economic success. One cannot be done without the other.
According to the will of the EU, companies with more than 500 employees should in future indicate to what extent their activities fit into one of three categories for sustainable investments: “green”, “enabling” and “transition” are available. Does this help fund managers?
The primary concern should be to ensure that the sustainability data is also reliable. The form in which this is implemented is of secondary importance to us. The fact that transparency is to be increased is definitely a step in the right direction. But I would at least question whether one is doing oneself a favor with terms such as “green”, “enabling” and “transition”, that is, an express assessment. Not a single ton of CO2 should be saved just because something falls into the “transition” pot. That would require a consensus in society as a whole.
Aren’t money managers too narrowed down when politicians give them strict requirements for a sustainability scheme? Do you expect a loss of return?
No, neither one nor the other. Since the taxonomy should expressly not prescribe where one can invest and where not, we reserve the right to deviate from the static classification if our analysis comes to a different conclusion. Our hope is that the taxonomy will at least lead to companies issuing more and better information on sustainability and thus making it easier for us to analyze the respective companies – and that it will put a stop to “greenwashing” in the fund industry. This would protect investors from sham packaging that says “sustainable” on it, but does not contain any of it.
Has your stance on the topic of climate change and sustainability changed much with the protests of climate protection activist Greta Thunberg and the “Fridays for Future” movement?
Greta Thunberg’s protest is important, but the right conclusions should be drawn from it. Politicians should have the courage to use intelligent incentive systems to promote climate-friendly economic activity and consumption and, conversely, to punish pollution of the environment. A higher CO2 pricing, for example, would be more productive than a pure ban policy, as it stimulates innovations and the development of new technologies without patronizing the citizens. It could even contribute to a green economic miracle, a kind of “Green New Deal”, if it were done right and steered the energy of scientists, entrepreneurs and engineers in the right direction.
You have received a lot of awards for your funds, but a sustainability seal is not one of them. Will that change?
We are basically not interested in awards or seals. We will remain true to our investment strategy, which explicitly includes ESG factors in the analysis process.
ESG stands for environment, social and good corporate governance, or in English: environment, social and governance. Why are these factors important?
We are convinced that this strategy not only delivers added value for our investors, but also benefits all stakeholders in the companies in which we are involved. In the end, that should also be recognized – with or without a seal.
Can you rely on the data provided by companies on sustainability and the climate?
No, not yet. For a proper company analysis that also integrates sustainability factors, we not only need more, but above all better data than the one previously provided. The fact that there has not yet been a reporting standard that prescribes what and how it is published appropriately has led to a confusing jumble of data that is sometimes hardly comparable. The template-like ESG ratings derived from this therefore only help us to a limited extent. You can point out one or the other critical point, but nothing more. As an investor, you cannot avoid your own analysis.