ESM an ESG investor
The ESM adheres to environmental and social principles when investing its €80.5 billion paid-in capital in securities and issuers that are aligned with Environmental, Social, and Governance principles (ESG). In 2019, entities such as governments, public agencies, and supranationals with a significant social and environmental contribution accounted for 69% of the €34 billion ESM invested capital (excluding cash).
Out of these investments, more than €1 billion had a targeted purpose such as the financing of social housing or environmental projects, more than doubling the amount invested at the end of 2018. The ESM aims to further integrate responsible investment principles into the management of its assets in the future, while ensuring that these investments remain in line with the ESM’s objective to guarantee its creditworthiness and liquidity.
The United Nations Principles for Responsible Investment
In February 2020, the ESM signed the United Nations (UN) Principles for Responsible Investment (PRI). The PRI is recognised as the leading global network for investors committed to integrating ESG considerations into their investment practices and ownership policies. By signing the PRI, the ESM commits itself to following the UN-PRI’s best practice principles in ESG. The ESM will incorporate those responsible investment principles in line with ESM investment guidelines and risk management policies.
The UN PRI is the world’s leading proponent of responsible investment. As such, the ESM is acting in line with financial institutions committed to responsible investment approaches. ESM will actively participate in working groups and engage with stakeholders to promote sustainable economic growth.
Sustainable usage of resources
The ESM is also committed to preserving the environment, as a sustainable user of resources in its day-to-day operations. To this end, the ESM has established several initiatives. For example:
The ESM has obtained the SuperDrecksKescht® Certification of the Luxembourg Government on the sound treatment of available raw material and energy sources and the recycling of waste.
The ESM is committed to green mobility, for example by providing electric car charging stations within its facilities or encouraging staff to participate in local initiatives promoting bike commutes to work.
The ESM is committed to finding sustainable solutions to disposable plastics. Therefore, the ESM signed up to the ‘Zero-Single Use Plastic Manifesto,’ an initiative by Inspiring More Sustainability (IMS) – Luxembourg’s leading sustainability network. By signing up to this manifesto, the ESM commits to eliminating single-use plastics throughout the institution by the end of 2020.
The ESM Carbon Footprint
As an important step towards integrating ESG best practices in its operations, the ESM started in 2019 to examine and report the carbon footprint arising from its internal operations. The identification, measurement and reporting of greenhouse gas emissions are key for designing and implementing appropriate reduction measures. In order to demonstrate its commitment to transparency and to enhancing its environmental performance over time, the ESM decided to publish its Carbon Footprint Report.