Sustainability FAQ

Responsible investing (RI) refers to a variety of investment options spanning different asset classes, with a focus on creating long-term value rather than maximising short-term financial returns. RI strategies are characterised by a focus on long-term value creation. This can include directing capital towards investments with credible transition plans, i.e. those that are preparing their assets and business models for future resilience in the light of the economy’s transition to a sustainable and less-carbon intensive future. In simple terms, this involves investing in incumbent assets such as residential buildings or utilities companies that are transitioning from fossil fuels to renewable energy sources. RI also encompasses impact investing, which explicitly seeks to generate positive environmental and/or social outcomes alongside long-term financial returns.

ESG integration considers how an issuer or investment manages its exposure to environmental, social and governance risks and opportunities when assessing an investment case. We seek to understand how investees are exposed to and manage environmental and social risks and opportunities. As exposure to these issues can have financial implications, the way in which they are managed has bearing on the long-term investment case of a company or asset.

The sustainability (or ESG) risk factors are specific to each industry, geography and company. The materiality of these factors depends on the issuer’s exposure to and management of environmental and social risks and opportunities.

Responsible stewardship informs the way we manage both our clients’ and our own assets. We primarily steward our clients’ assets by engaging with investment issuers to encourage capital allocation and business practices that are aligned with long-term value creation. We engage both directly and through collaborative engagement initiatives. You can learn more about our engagement activities in our latest RI report. Our responsible stewardship strategy for our operations informs how we steward our own assets. This strategy has four pillars: efficient infrastructure, responsible mobility, consumption management and environmental health. Find out more about our responsible stewardship strategy.

Learn more about our engagement activities in our latest RI report.

Each Pictet business line has its own responsible investment policy, which it oversees itself. Responsible investment policies, including details of oversight, can be found here.

An overview of Pictet’s sustainability strategy oversight can also be found here.

As the economy, society and environment are interconnected, it is most effective to adopt a systemic approach when addressing an issue in any of these spheres. For investors, this means making investment allocation decisions that support positive environmental and social outcomes, as well as delivering financial returns. This can include investing in sustainability solutions, such as low-carbon or circular economy technologies (as part of capacity building), or assets transitioning from brown to green (a utility company transitioning to renewables). These investments help to scale, reach tipping points and facilitate the transition to a more resilient and sustainable economy.

Our goal is to remain a leader in responsible investment by making long-term, evidence-based decisions.

Read more about our strategy and targets here.

For corporate and sovereign investments, we define ‘sustainable investment’ at issuer level, except for use-of-proceeds labelled bonds, for which it is defined at instrument level. For third-party funds, we adopt the ‘sustainable investment’ definition and results provided by the fund manager. More details can be found in our responsible investment policies here. Pictet’s Sustainable Investment Management Group was created to uphold the framework by which we define what qualifies as a sustainable investment.

Pictet offers responsible investment strategies, including positive impact, across asset classes for private wealth and asset management clients. Pictet Alternative Advisors manages our alternative assets investments, which are available to both private wealth and asset management clients.

Yes, Pictet publishes an annual Group Sustainability Report, in accordance with:

• The EU Corporate Sustainability Reporting Directive (CSRD);
• European Sustainability Reporting Standards (ESRS);
• The EU Taxonomy Regulation’s interpretation for Article 8;
• Article 964 a-c of the Swiss Code of Obligations;
• The Swiss Ordinance on Climate Disclosures;
• Sections 289 b and c and 315 b of the German Commercial Code.