SAM Sustainable Asset Management begins with identifying
trends and developments that pose industry challenges
and opportunities and effect market forces. These
trends and developments fall into one of two categories:
sustainability trends and macroeconomic trends.
From these trends and developments the opportunities
that companies need to seize and the risks they
need to manage are identified. These opportunities
and risks are considered as the criteria for our
SAM Corporate Sustainability Analysis™ are
developed. This analysis is conducted in three parts,
screening, assessment, and focused analysis.
First, one thousand large cap companies are screened
via an on-line sustainability questionnaire, media
and company document analysis, and via the SAM
network. The companies are ranked according to
general and industry specific criteria. The resulting
"Qualifier List" comprises approximately
300 large cap and 200 small cap companies. They
form the universe of sustainable companies, i.e.
companies that lead their peers with regard to
sustainability. The members of the Dow Jones Sustainability
Index are drawn from this universe of sustainable
companies.
The second step, the company assessment, is conducted
for all members of the Qualifier List and designed
to spot weaknesses with regard to critical industryspecific
Sustainability issues and with regard to financial
stability. Third party research is utilized to
identify possible discrepancies between a company's
claimed earnings situation and its likely economic
earnings base. The assessment procedure identifies
companies that are burdened with a short-term
risk of not being able to deliver on their sustainability
orientation. The resulting "Investment List"
forms the eligible universe for active mandates
and comprises approximately 200 companies.
The third step, the focused analysis, is designed
to identify the industry and technology leaders
within each industry. Each company's strategic
position and strategic goals are analysed with
regards to the industry's opportunities and challenges.
The company's competences to maintain its strategic
position or achieve its strategic goals are evaluated.
The resulting "Focus List" comprises
approximately 100 companies that are most likely
to turn sustainability into shareholder value.
It forms the eligible universe for focused mandates.
Portfolio construction combines the findings
of our Corporate Sustainability Analysis with
relative valuation. Active stock selection from
the adequate universe of sustainable companies
is foremost based on price-value discrepancies.
The main tool in this process is the SAM Sustainability
DCF-Model™. Impacts of sustainability on
the fair value of a company's security are
quantified and included in the determination of
fair value. SAM Sustainable Asset Management's
investment process thus incorporates sustainability
in both the evaluation and the fair value determination
of a company. Clients' objectives and constraints
scale active investment decisions.
Risk control and performance attribution is conducted
using third party risk models and software. Performance
measurement complies with international performance
presentation standards.
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