Vontobel : Corporate Responsibility & Sustainability Report - Chapter of the Annual Report 2021

Chapter of the Annual Report

2021

Corporate Responsibility & Sustainability

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Further information: vontobel.com/sustainability

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Corporate Responsibility & Sustainability 85

Corporate Responsibility

& Sustainability

1. Foreword
2. Sustainable Investing

1. Economic Sustainability

1. Environmental Sustainability

1. Social Sustainability

1. General Disclosures

1. GRI Content Index

1. UN Global Compact: Activities and Results

1. TCFD Statement

• Page numbering is according to the Vontobel Annual Report 2021

86 Corporate Responsibility & Sustainability

Foreword

Assuming responsibility, taking action

2021 was another eventful and challenging year. The coro- navirus and measures to contain the pandemic impacted on our daily lives - both professional and personal. Travel bans imposed by many countries and the requirement to work from home severely restricted our movements again this year. However, these steps were essential to protect the health of our employees, clients and families.

The effect of these restrictions is also visible in our environmental key performance indicators for the year under review - primarily the figures for air travel, which - for the first time - did not represent the largest proportion of our operational carbon footprint. The majority of our communication with clients, internal discussions and training or development courses took place on a virtual basis. In this context, we benefited from our forward-looking investments in videoconference and communications technol- ogy. And the use of new virtual technologies, tools and platforms provide guaranteed access for all our col- leagues, wherever they are located around the globe.

In Switzerland, the CO2 Act - which I personally campaigned for - was just rejected by Swiss voters. They opposed the law in the very year in which Switzerland and Germany experienced exceptionally strong storms, which caused devastation and suffering. It is difficult to determine whether or not this was due to climate change - though scientists believe that this has at least partly shaped these weather conditions. Above all, it is becoming clear that further education on this topic is needed. Vontobel has long recognized its responsibility to actively contribute to the development of a more sustainable economy and society. Achieving the transition to a carbon-neutral economy is one of the major challenges of our time. This historic transformation process creates opportunities for investors but also entails risks. As a globally operating investment firm, we engage in an active dialogue with our private and institutional clients about known and future risks and opportunities. It is of decisive importance for our clients that our sustainable investment solutions generate a financial return and enable them to align their investment decisions with specific investment objectives as well as their personal values.

The Sustainable Finance Disclosure Regulation (SFRD) - which forms part of the EU Action Plan for Financing Sustainable Growth - entered into force in March 2021. Since Vontobel is a globally active financial expert, not all of our products fall within the scope of this European regulation.

To ensure transparency and comparability, however, we have decided that all of our investment solutions that take account of ESG criteria will not only be classified according to our own "Integrated ESG" and "Sustainable" product categories but also according to the SFDR. In the case of investment solutions that are not subject to this regula- tion, we apply the classification mutatis mutandis. In the year under review, Vontobel Asset Management and TwentyFour Asset Management became first list signatories to the UK Stewardship Code 2020. To become a signatory to the Code, which sets high stewardship stan- dards, asset managers must submit a Stewardship Report to the UK Financial Reporting Council for review.

Vontobel is also actively involved in industry associations to support efforts to strengthen the position of the Swiss financial center as a leading hub for sustainable investing. In 2021, we actively assisted the Association of Swiss Asset and Wealth Management Banks (VAV) - which plays an important role in the financial center - in formulating 16 priorities in the area of sustainable finance. This initiative demonstrates how its members can make a concrete contribution towards the realization of the climate targets set out in the Paris Agreement.

Vontobel further developed its Sustainability Governance in 2021: The Group-wide Corporate Sustainability Committee now consists of management representatives from all Client Units and Centers of Excellence. In parallel to this, Vontobel has expanded its sustainability positioning to include six commitments that set out our contribution to a more sustainable economy and society. Further information is provided on page 110 in the section on Governance.

We will continue to face multiple challenges in the year ahead. However, we also see them as a source of new opportunities - for Vontobel, our employees and clients, as well as for the economy and society.

Dr Zeno Staub

CEO Vontobel

Corporate Responsibility & Sustainability 87

Sustainable Investing

Product portfolio

103-1 Explanation of the material topic and its boundary Vontobel has been committed to acting and investing in a value-orientedand farsighted manner for generations. As a pioneer in this field, we have been offering our clients a wide range of sustainable investment solutions since the 1990s.

The integration of environmental, social and governance (ESG) factors into our product and service portfolio is a key part of Vontobel's Sustainability Strategy as a globally active financial expert. We regard the integration of these factors as an effective lever in order to foster the sustainable development of the economy and society.

Our aim is for our clients to be able to contribute to sustainable development, generate financial returns and select investment themes that reflect their own values and investment objectives. Our three Client Units (Wealth Management, Asset Management, Digital Investing) work together closely to help achieve this.

103-2 The management approach and its components No investments in controversial weapons

All our investments have to fulfil certain minimum require- ments. Cluster bombs and land mines are banned by international conventions. In 2011, Vontobel therefore approved Group-wide guidelines that prohibit investments in companies that manufacture these types of arms. Stringent processes ensure that no manufacturers of cluster bombs and land mines are included in our investment funds, discretionary mandates or investment recommendations.

Our guidelines on cluster bombs and land mines can be found here: www.vontobel.com/principles-policies.

Investment solutions

As a globally active financial expert with a long track record in sustainable investing, Vontobel can offer interested clients the opportunity to achieve financial success with our sustainable investment solutions and align their investment decisions with specific investment objectives and personal values.

We focus on active asset management based on a multi-boutique model with independent centers of com- petence, highly specialized investment teams and dedicated ESG analysts. This organizational setup allows us to align the boutiques' investment processes with the specific requirements of the respective asset classes and geographies and to pursue a clear investment philosophy.

A universal ESG approach would not allow these different requirements and goals to be met. We therefore develop specialized ESG strategies that are tailored to each investment strategy. Based on this ESG approach, Vontobel Asset Management received the Scope Award for "Best Asset Manager ESG Boutiques" in Switzerland in 2021. The analysts of the Scope Analysis rate the risk/return profile of investment funds and the quality of asset man- agers.

The ESG Investment Forum is responsible for the coordination of the various investment strategies with a focus on sustainability themes as well as overarching principles and policies. It also advances ESG topics across all investment teams at Vontobel and meets on a monthly basis. The Committee consists of representatives of all the investment boutiques. The Chair of the Investment Forum is a member of the Vontobel Corporate Sustainability Committee (page 110).

All our investment solutions that incorporate ESG criteria are based on our ESG integration philosophy with these five components:

• To gain a holistic view of companies and issuers, Vontobel - as an active manager - does not generally rely on a single source of information. We work with various leading providers of sustainability data, e.g. MSCI ESG or Sustainalytics, as well as with local or specialized ESG data providers. Our investment spe- cialists also use their direct contact with companies to obtain additional ESG insights.
• Based on these sources of information and our own ESG research, we form our own opinion about compa- nies and themes. Our ESG specialists are an integral part of our investment teams: They work together to develop processes and tools that are tailored to the specific goals of each strategy.
• The continuous monitoring of ESG risks is also a key element of our risk management. Our ESG specialists and investment teams discuss current ESG risks during research meetings.
• We believe that active ownership adds value between long-term partners, e.g. investors and management. This approach is set out in our Voting Policy and our Engagement Policy Statement. Further information on our active ownership activities are provided on page 94.
• Finally, we assign a high level of importance to trans- parency. Our reporting methods are designed to pro- vide an accurate account of our investment pro- cesses, to meet the needs of our clients, and to comply with applicable regulations. We strive to make ongoing improvements to our reporting.