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Integration of ESG criteria

ESG criteria play an important role in the investment approach for KfW's liquidity portfolio

Since 2008, KfW has included not only the credit rating of the issuers but also their sustainability rating based on ESG criteria (Environmental, Social and Governance) in the investment decisions for the liquidity portfolio.

The sustainability ratings of the issuers in the liquidity portfolio are provided by the sustainability rating agency ISS ESG. ISS ESG takes into account a large number of individual criteria that are assigned to the environmental, governance and social categories. When compiling the sustainability ratings, a sector-specific weighting of these criteria is usually used.

Examples of ESG criteria for companies:

Climate strategyEqual opportunitiesBusiness ethics
Environmental managementFreedom to organiseCompliance
Environmental impact of the product portfolioHealth and safetyIndependence of the Supervisory Board
Eco-efficiency: CO2, water, waste, energyProduct responsibilityCompensation
Energy managementSocial impact of the product portfolioShareholder democracy and shareholder structure
Water risks and impactsSupply chain managementTaxes