Germany’s DWS Group has extended its socially responsible investment range with the launch of a corporate bond product that sets exclusion criteria for “controversial” companies.
The DWS Invest ESG Euro Corporate Bond fund excludes sectors and companies that violate the United Nations Global Compact – a non-binding pact aimed at encouraging businesses to adopt sustainable and socially responsible policies.
Using ESG – or environmental, social and governance – factors as a risk management tool could lead to higher returns for less risk, the firm says.
“ESG criteria provides a standardised framework for the early identification of risks. This helps to avoid significant price losses and the opportunity to provide investors with a better risk-adjusted return,” said Joern Wasmund, head of fixed income at DWS.
Managed by Karsten Rosenkilde, the fund has a strong focus on reducing CO2 emissions. Based on a variety of individual ESG indicators, a best-in-class approach aims to identify sustainable leaders and laggards.
The group manages a total of nine ESG bonds funds with more than €2 billion in assets under management (AuM). As of the end of March this year, DWS had €704 billion of AuM overall.
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