VIAC/Finpension 3a Greenwashing - Large sustainability deviation between Swisscanto and UBS funds

Banks, Insurances & Third Pillar
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There is a large difference in approach between the two funds of funds Global Sustainable 100 in Viac’s 3A pillar.

Swisscanto’s funds ESG approach seems surprisingly flimsy, with limited exclusions; while UBS uses an MSCI Selection index, promoting high ESG scoring companies.

I compared the two World Equity funds (ex-CH) from UBS and from Swisscanto.

Swisscanto excludes Berkshire Hathaway, Netflix, AbbVie, Chevron, Oracle while keeping large investments in Apple, Amazon, and Meta.

MSCI excludes Apple, Amazon, Meta, Broadcom Inc, and the very carbon intensive Berkshire Hathaway of course.

What do you think? My goal is to avoid greenwashing as much as possible, while remaining reasonably diversified.

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What I think, honestly? I think ESG is long dead as a concept. If it ever was alive at all.

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I think it’s greenwashing in either case and don’t expect investments in ESG funds to have any actual benefit, so I use funds that track the normal indices.

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While I can understand that, I still want to be broadly invested while avoiding companies with significantly negative impact.

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I don’t know whether it would be broad enough for you but you may want to take a look at Inyova (possibly in combination with index funds at VIAC/finpension).

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UBS had supposedly preferential TERs (even zero, I think though I couldn’t find the document they’d sent me) for UBS funds held in UBS accounts, but they’re ALL ESG which I actively avoid.

It’s a fact of life, for-profit rapes whatever they can to make more profit, there’s no two ways about it and I doubt it’s possible to avoid. For every moustachioed zillionaire on a bicycle there’re ten thousand saps getting loans, uploading their lives on social media, buying crap they neither need or can afford off Temu and Amazon, to be transported burning petrol or lithium batteries, packaged in 3 trees’ worth of carton, spreading powdered microplastic from the tires. And most of that stuff never gets used anyway, or is returned and then loaded on a ship and dumped on a beach in Ghana (literally - 1mn items of clothing per week). To be honest we need them :wink:

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That’s very cynical tho, individual action also matters (up to everyone to figure out the most impactful, personally I feel like political action still trump stuff like ESG at my scale, also I’m mostly focused on climate action vs the rest of ESG).

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You’re right, I am dead cynical. I used to be very idealistic and socially/humanly conscious but life beat it out of me. Currently my moto is “I’ll only give explanations to my wife and kids, and the law”.

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ESG is so broad and vague a concept that it is utterly useless for any real purpose and intent. The reason is that it combines three different things that have little/nothing to do with each other (environment, social impact, governance). A company can have a terrible environmental record, but still get a great ESG rating based on gender equality, for example.

The model is very common among rating agencies, comparison platforms, etc: You adapt your rating system in such a way so that all potential customers can get a decent rating. In the case of ESG, the potential customers are the companies that pay the agencies for ratings. If a company is ready to pay your agency a million dollars for a good ESG rating, you will find a way to make them qualify for a good rating, and the flexibility you get by mixing three unrelated topics means this is generally always possible. Simply put: It’s a business.

In my opinion, a much more logical approach would be to have much more specific ratings. There have been some interesting developments in the market, with new funds for a much wider scope of specific ethics/preferences. I also see the (weak) trend towards funds giving voting rights to investors (proxy voting) as a very positive development.

Ultimately though, the power for environmental change lies entirely with consumers, in my opinion. ESG and the like are just another way to pass the buck.

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I think we’ve already had the ESG discussion in this forum what feels like 100 times. My personal conclusion: If you want to pay attention to the environment etc., then you have to do stock picking and decide for yourself which companies you want to invest in. However, the focus of this forum thread is on 3a. And in 3a stock picking is not possible. There is often only “normal” or ESG. In other words, very bad or bad (from an environmental perspective). At least as far as VIAC is concerned. @leman: In this respect, it probably makes sense to also compare funds from other 3a providers (for example: @jay has already mentioned Inyova. And there is also Radicant with an own ESG-Rating. But such providers are often expensive).

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Another option is not to worry about this issue in your portfolio and instead make an annual donation to an environmental organization of your choice. You can also do this mathematically: Let’s assume an environmental fund is 0.5% more expensive and the 3a portfolio is CHF 100,000. Then you could donate CHF 500 a year (0.5% of CHF 100,000). I believe that this would achieve even more. The political imbalance (billion-dollar companies vs. environmental organizations) is often a money problem. And you can even deduct the donation from your taxes.

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