LLB signs UN Principles for Responsible Investment

Vaduz, 17 August 2020. The Liechtensteinische Landesbank (LLB) has signed the United Nations-supported Principles for Responsible Investment (UN PRI). In doing so, the LLB underscores its commitment to actively integrating environmental, social, and governance (ESG) issues into our investment process. The LLB is building on its own sustainable investment approach that we offer to institutional investors and private clients as part of our comprehensive range of products. Our Sustainability Council and Sustainability Officer coordinate implementation of the initiatives. For many years already, sustainability reporting has followed the GRI Standards of the Global Reporting Initiative.

The LLB – standing for sustainability since 1861

Looking back on nearly 160 years of tradition, the LLB considers sustainability to be an integral part of its business success. "Sustainability has long been a core element of our action. For us, sustainability means harmonising our economic activities with responsibility for society, the environment, and corporate governance," says Group CEO Roland Matt. "For years, we have offered our clients investment solutions that take account of a wide range of sustainability criteria. By joining the UN Principles for Responsible Investment, we are expressing how important it is to us to integrate environmental and social factors as well as good governance in our investment strategies."

The LLB officially signed the UN PRI in July 2020. As a member of this global investors' initiative, the LLB supports the integration of the impact of investment activities on environmental, social, and governance issues. The signatories undertake to report annually on their implementation of the principles.

Sustainable investment approach

LLB Group Asset Management is the largest asset manager in Liechtenstein. In 2019, it received the Refinitiv Lipper Group Award for the best range of funds in Europe in the top discipline "across all major asset classes". When selecting sustainable investments, the LLB relies on a systematic and methodologically comprehensive process that combines negative exclusion and positive selection criteria. Doing so establishes the important bridge between sustainability and economic fundamentals. This approach is developed continuously in line with the UN PRI goals and adjusted in accordance with current demands.

"In this way, the LLB makes it possible for investors to pursue a well-balanced sustainability approach and to implement ethical values in their investments without lower returns," says Markus Wiedemann, Chief Investment Officer of the LLB Group. "Also under the aspect of sustainability, our clients are able to make global and broadly diversified investments, relying on the LLB's expertise. We build on our internal research and also on the expertise of renowned agencies such as MSCI ESG Research – a leading ESG research provider – and we invest in attractive companies and funds with a high ESG sustainability rating."

Sustainable investment solutions for institutional investors and private clients

Demand for sustainable investments in line with ESG criteria is rising steadily. Alongside institutional investors, more and more private clients are also considering and demanding them.

The LLB has been offering sustainable asset management mandates already since 2015. According to the study "Sustainability in Liechtenstein – ESG Analysis of Liechtenstein Equity Funds 2016" published by the Liechtenstein Investment Fund Association, the LLB already had the largest range of sustainable equity funds in Liechtenstein in 2016, with 11 sustainable products.

Since 2017, clients wishing to make their investment decisions themselves have been able to use our LLB Invest Sustainable product to systematically implement their personal investment strategy and incorporate ESG criteria alongside the classic criteria of profitability, liquidity, and security. Additionally, our LLB Semper Real Estate fund received the Austrian ecolabel last year. And by the end of 2020, LLB Group Asset Management will ensure that most of our range of funds will offer sustainability criteria.

First Liechtenstein gold fund for sustainable investing

Another area where the LLB is relying on sustainability is the first Liechtenstein gold fund, launched at the beginning of August 2020, which invests in sustainably produced and transported gold in accordance with the relevant standards. The gold is held physically in LLB vaults in Vaduz. The fund shares are tradable daily. On request, investors can receive physical payout of 1 kg bars of gold when the shares are sold. The gold in which the new LLB fund invests is produced sustainably. Protection of human beings and the environment is of crucial importance. Compliance with the laws governing the production and refining process is strictly monitored and certified. Child labour is ruled out. Strict emphasis is placed on fair and low-impact processes for transport and refining. Strict separation of sustainable gold from other gold is also ensured during transport and refining.

Strengthening of sustainability organisation

The LLB is convinced that sustainability is a megatrend and will become an increasingly decisive competitive factor. To underscore the growing importance of sustainability not only in the investment field, the LLB is creating a Sustainability Council and the position of a Sustainability Officer. Together with the domain specialists, the Sustainability Officer will manage implementation of the LLB Group's sustainability strategy. The Sustainability Officer chairs the Sustainability Council, which also includes the Group CEO. The Group Board of Management and the Board of Directors regularly consider ongoing projects as well as important initiatives and developments.

Sustainability report with GRI label

Since 2014, LLB sustainability reporting in its annual report has applied the standards of the Global Reporting Initiative (GRI), which enjoys worldwide recognition. By doing so, the LLB offers its stakeholders the highest level of transparency in regard to its contribution to the Liechtenstein national economy, its efforts on behalf of social and environmental concerns as part of its daily business operations, and its risk, data protection, and compliance management. The report also describes how the LLB Group uses energy efficiency to contribute to climate protection. Using a comprehensively interpreted materiality consideration, the report provides information on the company as an attractive employer as well as on personnel development, occupational safety, diversity, and equal opportunity. GRI is the most widespread and comprehensive sustainability reporting standard in the world.

About the UN PRI

The United Nations-supported Principles for Responsible Investment are an international network of investors who jointly put the following six principles for responsible investment into practice:

  • We will incorporate environmental, social, and corporate governance (ESG) issues into investment analysis and decision-making processes.
  • We will be active owners and incorporate ESG issues into our ownership policies and practices.
  • We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  • We will promote acceptance and implementation of the Principles within the investment industry.
  • We will work together to enhance our effectiveness in implementing the Principles.
  • We will each report on our activities and progress towards implementing the Principles.

The goal is to create awareness for the impact of environmental, social, and corporate governance (ESG) issues. The signatories also receive support in integrating these issues in their investment decisions and in exercising their role as shareholders. By applying these principles, the approximately 2'600 signatories worldwide contribute to the development of a more sustainable global financial system.

www.unpri.org, www.unpri.org/signatory-directory/liechtensteinische-landesbank-ag/6113.article