Sustainability FAQ

Responsible investing (RI) presents a range of investment options across asset classes that go beyond maximising near-term financial returns. What RI strategies share in common is the focus on long-term value creation. This can include directing capital towards investments with credible transition plans – those that are preparing their assets and business models for future resilience in light of the economy’s transition to a sustainable and less-carbon intensive future (simply put, investing in today’s incumbent assets like residential buildings or utilities companies that are moving from brown to green). RI also includes impact investing (e.g. clean energy solutions), which explicitly seeks outcomes that generate positive environmental and/or social returns in addition to long-term financial returns.

ESG integration accounts for how an issuer or investment is managing its exposure to environmental, social and governance risks and opportunities when evaluating an issuer’s investment case. We seek to understand investee exposure to and management of environmental and social risks and opportunities. Because exposure to these issues can have financial implications, how they are managed has bearing on the long-term investment case of a company or asset.

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

Responsible stewardship guides how we manage both our clients’ and our own assets. Our primary means of stewarding our clients’ assets is 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. Learn more about our engagement activities in our latest RI report. How we steward our own assets is guided by our responsible stewardship strategy for our operations. This covers four pillars: efficient infrastructure, responsible mobility, consumption management and environmental health. Learn more about our responsible stewardship strategy.

Each Pictet business line with an investment offering has its own responsible investment policy, overseen at the respective business line level. Responsible investment policies, including oversight details, can be found here. An overview of Pictet’s sustainability strategy oversight can be found here.

Because our economy, society and environment are part of a single system, it is mutually beneficial to take a systems approach to addressing an issue in any of these spheres. For investors, this means taking investment allocation decisions that support positive environmental and social returns in addition to financial returns. This can include investing in sustainability solutions (e.g. low-carbon or circular economy technologies), as a kind of capacity building, or assets transitioning from brown to green (e.g. a utility company transitioning to renewable energy). These investments help scale and reach tipping points to facilitate the transition to a more resilient and sustainable economy.

Our goal is to maintain responsible investing leadership through our commitment to long-term, evidence-based decision-making. Read more about our strategy and targets here.

For corporate and sovereign investments, we define the concept of “Sustainable Investment” at issuer level, with the exception of 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 (including positive impact) strategies across asset classes for private wealth and asset management clients. Our alternative assets investments are available for both private wealth and asset management clients and are managed by Pictet Alternative Advisors.

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 88;
• 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.