Corporate Social Responsibility Report (CSR) 2024

Corporate responsibility

We are concerned about the effects of our actions in all directions.

Just as we measure other companies by their behavior, we also want to stand our ground from an ethical and moral perspective and live up to our social responsibility. By this we mean the contribution that Arete Ethik Invest can make to sustainable development.

Relevant aspects of our business activities

In 2024, we quantitatively assessed the impact of our business activities for the fourth time. To do this, we use the familiar ESG system from the Anglo-Saxon world, according to which we divide these into the areas of “Environment” (“E”), “Social” (“S”) and “Governance” (“G”) – whereby the areas are interlinked in many ways.

Sustainable development is the focus of Arete Ethik Invest’s business activities. What we can contribute with our product range is the subject of our detailed sustainability report at product level, such as for the PRIME VALUES Growth fund:

Effects on the environment

The global consumption of natural resources by humans is currently unsustainable and most of the resulting difficulties threaten to worsen in the future.
There are still few reliable methods for measuring a company’s impact on local – let alone regional or even global – biodiversity. For practical reasons, we therefore focus on calculating our greenhouse gas emissions (GHGs). This is objectively justifiable, as the negative external effects in this area are likely to predominate in our business activities – for example, we do not undertake any major construction projects and only generate low material flows – and as combating climate change in turn provides relief for many other ecological problem areas.

The approach of dividing company-related GHG emissions into three scopes was developed by the World Resources Institute and the World Business Council for Sustainable Development and is now the standard for reporting. Scope 1 covers the emissions that we cause directly through our activities. Scope 2 includes indirect emissions, i.e. emissions that are generated by other companies for our consumption, for example of electricity. The third area comprises all non-energy-related emissions that are primarily generated by suppliers and customers due to the existence and activities of a company, for example through preliminary products, consumables at suppliers, server capacity, product use and disposal.
As we set ourselves high standards, we try to take responsibility for all three areas. Due to the small number of employees, we refrain from having the data and process verified by external providers and instead work with the Zurich-based myclimate foundation. foundation myclimate. It is clear from the list above alone that assessing the third area of responsibility is a major challenge.

For 2024, we have again collected detailed data on our energy consumption, commuting behavior and business travel, and for other sources we use empirical values from the foundation. Our business activities caused emissions of around 42 tons_{of CO2 equivalents} in 2023.

These are broken down by source as follows:

This may sound like a lot at first, but it is still 4.5 tons per employee. However, this annual consumption only corresponds to the GHG emissions of a flight for a family of four in economy class to Dubai, for example.

At 17 tons, energy and digital services represented the largest burden on our business activities last year. This reflects the high data consumption required by a modern financial services provider.
As we rent the office space, we have no control over the heating energy source. After all, we obtain100% of our electricityfrom hydroelectric, solar and wind power with zero GHG emissions.
Mobility accounts for just under 12 tons. This figure is made up of commuter traffic and business trips, for which we try to avoid emissions. Nevertheless, we were unable to avoid fifteen flights due to scheduling and logistical bottlenecks. All employees are encouraged to use public transport or the train whenever possible.
For materials and waste, we rely on estimates provided by the methodology partner.
The overall figure has risen again for the first time since 2021, which is due to additional employees in sales and customer service.

Compared to other companies, we work in a relatively climate-friendly way, which is partly due to our business model.

However, if you consider in absolute figures that our employees also cause emissions in their private lives, the climate crisis takes on a different meaning: on average, 7 tons_{of CO2 equivalents} are emitted per person in the EU. If our climate protection targets for society as a whole are to be achieved, this figure would have to be 0.6 tons. So there is still a lot of work ahead of us!

Contribution to improving the environmental impact

By financing climate protection projects, companies can take responsibility for their non-savable GHG emissions – an opportunity that we are happy to take advantage of. Apart from the ethical aspect, this allows us to take into account the social costs of emissions in our business activities on a voluntary basis.

Since 2021, we have been "offsetting" our unavoidable emissions by financing certified projects from the myclimate foundation. This statement is not unproblematic, as we emit GHGs; however, we make sure that the financed projects not only have a hypothetical positive effect, but are already having a positive impact today.
In this type of offsetting, we, the polluter, finance investments in partner projects that serve to avoid emissions elsewhere. This is often particularly efficient when it is done across national borders, as poorer countries have a great need to catch up in terms of technology, which holds great potential for savings.
In fact, we offset various activities twice - via the business credit card of Zurich-based South Pole Carbon Asset Management using the same mechanism. We have been using this still innovative offer since 2012 and would like to continue supporting it.

Confirmation of CO2 project financing by Arete Ethik Invest AG:

Social aspects and corporate governance issues

The human being is at the center of philosophical thought.

Accidents at work, for example, the prevention of which is a central concern of corporate ethics, are almost unimaginable in our company.
We experience our work as meaningful.
Seven employees are also co-partners and therefore owners of the company. Classic corporate ethical concerns that arise from the scientifically well-studied principal-agent problem are thus defused in our company: our management is committed to the various stakeholder groups and the different dimensions of responsibility are safeguarded.
The other employees work for Arete Ethik Invest on a (part-time) basis of their own choosing.
The management chains are short and our hierarchy is flat.
Nobody left the company voluntarily, which indicates a high level of satisfaction in terms of working conditions.
We donate an appropriate amount of our pre-tax profit to social and charitable institutions each year - over 3% in recent years. We have pledged project support to the development aid organization Swissaid over several years in the spirit of supporting civil society engagement. In 2024, we paid a five-figure sum for a water project in Niger. The project goes beyond the mere infrastructure of wells and water pipes in the Boboye region: it promotes self-responsibility and the participation of the population. The villagers actively help with the planning and implementation of the project. This strengthens their sense of community and personal responsibility. In special training courses, they learn how to maintain and care for the water installations and how to use them properly.

Outlook

The transformation to a sustainable life in harmony with nature is also an ongoing journey for us, which we will continue to pursue.

Like some companies in the financial sector, we have a rather low negative environmental impact, especially compared to economic and social value creation. In our case, as an asset manager, the problematic impact of lending is also eliminated.

As we need to achieve net zero emissions for society as a whole within a few years, projects to offset emissions are only part of the solution in the long term. Avoiding emissions everywhere is more important.

We want to continue to try to make our business trips as environmentally friendly as possible and to pay attention to social and ecological aspects when purchasing products.

Corporate Social Responsibility Report (CSR) 2024