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Sustainable investments

Principles for Responsible Investments – Investing responsibly

At Munich Re, responsible management has top priority, not least for the sake of profitability. Our asset management therefore follows the United Nations Principles for Responsible Investment (PRI). We helped to draw up these principles and we were the first German company to sign them.

A holistic investment strategy aligned with ESG (environmental, social, governance) also has a beneficial effect on risk and return. That is why, on 27 April 2006, we were one of the first signatories to the United Nations Principles for Responsible Investment (PRI), which we played a prominent role in drafting. Behind these principles is the view that investment decisions often take insufficient account of the need for sustainable development and thus the needs of future generations.

“I am firmly convinced that environmental, social and corporate governance [ESG] topics will become mainstream for the investment community. And PRI, with support from UNEP Finance Initiative and UN Global Compact, will be a catalyst and thought leader for this development.”

Dr. Wolfgang Engshuber, outgoing Chief Administrative Officer of Munich Re of America, since 1 January 2011, Chairman of the investor-led initiative PRI

Principles and recommendations for action for investment decisions

Six principles are described more closely in a list of 35 recommendations for action. These enable institutional investors to take account of ecological and social aspects, together with topics of good corporate governance, in their investment decisions. Munich Re is committed to fulfilling the PRI in an appropriate and forward-looking manner.

The following examples show how Munich Re is putting the six UN principles into practice:

No.	Principle	Examples of measures
1	“We will incorporate ESG issues into investment analysis and decision-making processes.” Sustainability ratio	We apply the best-in-class approach to the investment process, which means that, taking all sectors into account, we select especially sustainable securities from the pool of investible equities and corporate bonds. If two » risk-return profiles are identical, we select the more sustainable issuer.
2	“We will be active owners and incorporate ESG issues into our ownership policies and practices.” Active investor	We communicate our investment criteria and address these in dialogue with the companies we work with. Our aim here is to motivate companies to improve their SRI rating or achieve a positive SRI rating for the first time. In this way, Munich Re also promotes issuers’ awareness for SRI.
3	“We will seek appropriate disclosure on ESG issues by the entities in which we invest.” Sustainability disclosure	For the funds MEAG Nachhaltigkeit, MEAG KlimaStrategie and MEAG FairReturn, we request information relevant to our sustainable investment criteria from the issuers. We have taken sustainability criteria into account when purchasing real estate since 2007.
4	“We will promote acceptance and implementation of the Principles within the investment industry.” Patron of PRI	We announce and stress our principles via publications in the financial press and by participating in presentations and congresses on sustainability. In January 2011, for instance, MEAG organised a workshop for institutional investors. With individual funds and activities, we show how responsible management can be put into practice: RENT (Renewable Energies and New Technologies) MEAG Nachhaltigkeit MEAG KlimaStrategie MEAG FairReturn
5	“We will work together to enhance our effectiveness in implementing the Principles.” Cooperation to realise the PRI	Through its PRI membership, Munich Re contributes to the further development and propagation of the principles. We are driving the exchange of experience forward with other PRI members in Germany and around the world.
6	“We will each report on our activities and progress towards implementing the Principles.” Reporting on activities and progress relevant to PRI	We participate in UNEP’s annual PRI Reporting and Assessment Survey. When reporting on PRI and our activities in this context, we make use of various communications channels (e.g. financial reports, SRI analyst meetings). Munich Re participates in SRI ratings and takes account of the estimates in its corporate planning.