Raiffeisen Capital Management among most credible providers of sustainable financial products

A study entitled Sustainable Financial Products commissioned by the Chamber of Labour attests to Raiffeisen Capital Management’s high standards. Factors including authenticity, transparency, exclusion criteria, the rating process, shareholder engagement, the advisory board, training, and labels were precisely assessed for 17 capital investment companies. According to the study, Raiffeisen Capital Management is among the most credible providers of sustainable financial products in Austria.

To quote the study, “It is apparent that medium-sized and smaller capital investment companies are finding it increasingly difficult to achieve the same level of sustainable fund management as the larger firms. Particularly when it comes to shareholder engagement, labels, and internal rating processes (in addition to the procured external ratings), the larger firms are clearly ahead of the other companies in terms of their expertise. With regard to the question of how greenwashing can be prevented, the higher-ranked capital management companies also provide much more plausible answers that are ‘easier to understand’ for retail customers than the firms that have a much lower ranking for authenticity.”

Of the 17 capital management companies that were analysed by the Chamber of Labour, half were found to have high to good standards in terms of authenticity. “However, there is a very big difference between the leading capital management companies and those that engage in few to no activities at all in relation to the factors that were investigated. Firms with a high level of authenticity place emphasis on internal process controls, high transparency on the website, and a broadly diversified range of data sources for the assessment of sustainable companies. This gives consumers a much higher degree of assurance that greenwashing is prevented,” explained the publishers of the study.

Valuation scheme investment companies
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The findings of the study are based on numerous interviews with experts from various fields (banks, fund managers at capital investment companies, customer advisors at banks, ESG research and rating agencies, asset management firms). A large number of interviews and surveys were conducted.

The demand side was also investigated. It is worth noting here that while consumers are certainly interested in sustainable financial products, when it comes to actually purchasing investment funds they – apparently – place emphasis on performance over sustainability. According to the authors, “This is likely to have a feedback effect on the product providers (i.e. the capital investment companies): The fund managers will also orient their thinking more towards the performance of a fund than the development of sustainable investment products in the future. Based on this, it can be concluded that sustainable investment funds have to offer an equivalent return to conventional funds – otherwise, there is a risk that sustainable investment funds will not be given a bigger presence in the product range and, if they exhibit lower performance than the benchmark, there will be no demand for them and no one will buy them.”