Responsible investing
Since 2018, a responsible investing policy has been an integral part of the Fund’s Investment Regulations. The aim of that policy is for the Fund to take into account environmental, social and governance (ESG) factors when devising its investment strategy and managing its assets, so as to favour investments in asset classes and companies that have adopted good practices regarding sustainability-related topics.
In 2023, that policy was supplemented by a climate policy intended to set out formally the Fund’s commitment, through its investments, to the Paris Agreement .
These two policies, developed in collaboration with the Nestlé Group, ensure that the Fund is aligned with Nestlé’s ESG values and climate commitments.
In 2025, the Fund continued its ESG monitoring of investments according to established practices, and the main points to note are set out below.
1. ESG assessment of asset managers tasked with managing the Fund’s investments
We found that all asset managers are aligned with the Fund’s responsible investing policy. The assessment looked at how asset managers incorporate ESG criteria explicitly into their investment processes, including their performance regarding shareholder engagement, voting in annual general meetings and the human and material resources they devote to these topics.
2. Assessment of ESG risks in the Fund’s investment portfolio
To assess the investment portfolio’s ESG risks, we compile a list of companies which are particularly exposed to ESG risks and in which the Fund’s asset managers have invested as part of their equity and bond investment mandates, with reference to the topics covered by the Fund’s responsible investing policy. Those topics are based on the 10 principles of the United Nations Global Compact, of which the Nestlé Group has been a signatory since 2001, together with a further two topics relating to climate change and corporate governance. A company whose practices are deemed to show a low level of compliance in relation to any of these topics will feature on the list.
The analysis showed that the Fund has limited exposure to companies that are subject to ESG risks.
3. Monitoring of climate commitments in relation to the Fund’s investments
The Fund’s climate policy establishes a framework and measurable targets for managing the climate impact of the Fund’s investments.
In 2025, the measurable climate targets set by the Fund were achieved for all asset classes assessed (corporate bonds, listed equities, Swiss real estate and infrastructure). These results need to be confirmed over the long term, and in particular until end 2027.
4. Quantification of climate risk
In 2025, a new analysis of the financial impact that climate change could have on the Fund’s investment portfolio was carried out using the model and related assumptions of an external consultant specialising in this field.
The analysis assessed the financial impact on the Fund of an extreme “High Warming” climate scenario in which temperatures increase by 20C relative to pre-industrial levels by 2050, and by 3.70C by 2100, resulting in large physical climate risks for the economy. This scenario reflects the current situation, with no additional measures taken to limit climate change.
The main conclusion of the analysis is that the financial losses which the Fund can expect to arise from such an extreme climate scenario would be bearable. However, it is important to note that a scenario involving a transition to a net-zero economy in which the Paris Agreement targets are hit would be financially more beneficial for the Fund. Accordingly, the climate commitments for investments defined in the Fund’s climate policy remain crucial in order to reduce the probability of a “High Warming” scenario.
Conclusion
The analysis and assessments carried out in 2025 in relation to responsible investing show positive results for the Fund’s investment portfolio. However, the Fund will continue its efforts to engage with asset managers so that these good results are maintained with respect to the companies, real-estate and infrastructure assets in which it invests.
[1] The aim of the Paris Agreement (COP 21) is to limit global warming to 2°C (and to 1.5°C if possible) compared with pre-industrial temperatures by reducing greenhouse gas emissions. To achieve that target, the world needs to achieve net zero greenhouse gas emissions by 2050.
[2] https://www.globalcompact.ch/focus-areas/the-ten-principles
