Erste Asset Management

A green label does not necessarily mean green on the inside

A green label does not necessarily mean green on the inside
A green label does not necessarily mean green on the inside
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Funds marketing themselves as green investment do not always focus on companies that fight climate change, develop solar modules or recycle batteries. Instead, many of them look like traditional portfolios holding large tech companies – yet they wear green labels.

Technology fund with green label

A green, exchange-traded fund of a large ETF provider is a good example. It was launched earlier this year and attracted record amounts even on day one. To many investors, a green label undoubtedly suggests a fund that holds companies in renewable energies, e-mobility, or recycling economy.

But in this case, that would be wrong. The top holdings of this ETF are Apple, Microsoft, Amazon, Alphabet, and Facebook, which account for an aggregate 20% of investments. In other words, almost like a tech ETF – but more easily marketable with a green label, it would seem.

Green does not always mean green

Some of the aforementioned companies have already implemented good environmental practices and have set themselves ambitious goals aimed at reducing their carbon emissions. For example, Microsoft is planning to turn carbon-negative along the entire supply chain by the year 2030 by reducing emissions and buying carbon offset certificates.

Not quite as comprehensive and quick, but ambitious all the same, Amazon intends to reduce its own carbon footprint (exclusive of the supply chain) to zero by 2040. But even if they manage to achieve their climate goals and start to obtain power from renewable sources in due course, they still do not create a positive impact for the climate or the environment with their products and services. They therefore represent no green investment to us.

Transparency is important

In order to separate the wheat from the chaff in the jungle of green investments, a new EU Regulation obliges financial institutions to categorise sustainable funds and disclose information on the investment approach. In the future, Article 9 funds will only be funds that intend to invest sustainably.

As far as Erste AM is concerned, this includes our Impact funds, e.g. Erste WWF Stock Environment and Erste Green Invest. Fund managers and Article 9 funds also have to regularly publish information about the sustainability impact of the fund and substantiate it with relevant indicators.

Article 8 funds are financial products that advertise environmental or social aspects. This category is in line with our responsible / sustainable funds, where we use our proprietary ESG rating to find the companies with the best environmental, social, and governance practices. Whereas Microsoft is investible for these funds on the basis of its good ESG performance, Amazon is no responsible investment for us due to numerous controversies in labour law; and it is certainly no green investment.

Legal note:
Prognoses are no reliable indicator for future performance.



Legal disclaimer

This document is an advertisement. Unless indicated otherwise, source: Erste Asset Management GmbH. The language of communication of the sales offices is German and the languages of communication of the Management Company also include English.

The prospectus for UCITS funds (including any amendments) is prepared and published in accordance with the provisions of the InvFG 2011 as amended. Information for Investors pursuant to § 21 AIFMG is prepared for the alternative investment funds (AIF) administered by Erste Asset Management GmbH pursuant to the provisions of the AIFMG in conjunction with the InvFG 2011.

The currently valid versions of the prospectus, the Information for Investors pursuant to § 21 AIFMG, and the key information document can be found on the website under “Mandatory publications” and can be obtained free of charge by interested investors at the offices of the Management Company and at the offices of the depositary bank. The exact date of the most recent publication of the prospectus, the languages in which the key information document is available, and any other locations where the documents can be obtained are indicated on the website A summary of the investor rights is available in German and English on the website and can also be obtained from the Management Company.

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Note: You are about to purchase a product that may be difficult to understand. We recommend that you read the indicated fund documents before making an investment decision. In addition to the locations listed above, you can obtain these documents free of charge at the offices of the referring Sparkassen bank and the offices of Erste Bank der oesterreichischen Sparkassen AG. You can also access these documents electronically at

N.B.: The performance scenarios listed in the key information document are based on a calculation method that is specified in an EU regulation. The future market development cannot be accurately predicted. The depicted performance scenarios merely present potential earnings, but are based on the earnings in the recent past. The actual earnings may be lower than indicated. Our analyses and conclusions are general in nature and do not take into account the individual characteristics of our investors in terms of earnings, taxation, experience and knowledge, investment objective, financial position, capacity for loss, and risk tolerance.

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It is expressly noted that this communication does not provide any investment recommendations, but only expresses our current market assessment. Thus, this communication is not a substitute for investment advice, does not take into account the legal regulations aimed at promoting the independence of financial analyses, and is not subject to a prohibition on trading following the distribution of financial analyses.

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