Sustainability and performance

Since September 2001, Munich Re has been involved in a project called Environmental and Sustainability Transparency for the Stock Markets, which was set up by the Institute for Environmental Management and Business Administration at the European Business School. One of the aims of this project was to gather more knowledge on the concrete connections between ecological and social aspects on the one hand and the economic success and performance of investments on the other. Sponsored by the Federal Ministry of Education and Research under the patronage of Professor Klaus Töpfer, the project was completed in 2004.

One significant outcome of the project was an econometric study carried out by the Centre for European Economic Research in Mannheim and the Swiss Bank Sarasin. It examined the effects of the environmental and social performance of European companies on their average monthly share yield in the period between 1996 and 2001. The main finding was that economic performance is not impaired if sustainability factors are taken into account. However, there was no evidence of a significantly positive correlation either.

A second study carried out as part of the research project analysed the performance of sustainability funds and indices compared with conventional investments. The main result of this study is that selecting shares on the basis of ethical, ecological and social considerations does not systematically imply having to accept underperformance.