Sustainable returns since 2007
Since 2007 the Global Challenges Index, which includes shares from 50 international sustainable companies, has on average developed much better than the German stock index (DAX®), for example, or the Swiss Market Index (SMI®). Thus, responsible investing and returns can go together.
The Global Challenges Index (GCX) concretises the theme of sustainability and focuses on seven challenges that are critical for the future. The Index requires that listed companies satisfy strict and consistent performance criteria and identifies pioneering entrepreneurs who make sustainable use of the opportunities offered by global change.
The seven global challenges and their relationship to the Sustainable Development Goals
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Combat the causes and consequences of climate change
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Ensure an adequate supply of drinking water
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End deforestation and promote sustainable forest management
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Conserve biodiversity and the ecosystem
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Deal with demographic change and population development
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The fight against poverty
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Support responsible management/governance structures
In addition, the 17 Sustainable Development Goals adopted by the UN in 2015 will also be integrated into the selection process to further expand on the Millennium Development Goals. Our selection process examines the extent of which the products and services of applicant companies are conducive to achieving these goals.
Source: United Nations
The process of evaluating a company may be reviewed based on the three examples Lenzing AG, Sonova Holding AG and Fabege AB through the following Link. (click here)
Recognising challenges and using them as opportunities
Companies that actively face global challenges benefit the most. Through innovative strategic and operational measures, companies can act by addressing risks to their success arising from the seven challenges. This will allow them to take advantage of new opportunities to grow their business. For example by:
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Ensuring the permanent availability of resources, e.g., through sustainable forestry and fishing,
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Reducing market price risks, e.g., by increasing energy efficiency and ensuring access to raw materials,
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Maintaining competitiveness through technical innovations, e.g., in the field of renewable energies,
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Opening up new markets, e.g., in the field of microfinance,
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Maintaining and expanding social acceptance and reputation.
By basing growth on the principles of sustainability and ensuring high standards in the area of corporate governance, companies also contribute to addressing global challenges.
Selection methodology: a combined approach
Using an absolute best-in-class approach, i.e., defining industry-related standards for the inclusion of companies in the Index, combined with the application of extensive exclusionary and positive criteria, the GCX selection process includes multi-stage screening in which 50 out of a macrocosm of around 6,000 companies are included in the Index. (Please click here for the Ethius Factbook)
The aim is to create a mix of large global companies, as well as small- and medium-sized entreprises (SMEs), which contribute to sustainable development primarily through the range of products and services in their core business.
Growth of the Global Challenges Index
The Global Challenges Index
Global Challenges Index
GCX Since Edition
Source: Bloomberg
Ethius Invest's investment methodology draws on the "Global Challenges Index", which can already reflect on a 15-year history and an annualised return of 9.41 % as per the end of 2023.
The Ethius Global Impact Fund has been awarded with the Austrian ecolabel and may be traded daily on all conventional fund platforms in Switzerland and Germany.