Swiss Responsible Bond Index

In April 2024, Ethos launched the Swiss Responsible Bond Index (SRBI), a sustainability index for bonds denominated in CHF. This index is made up of issuers included in the benchmark Swiss Bond Index AAA-BBB (corporate, city, regional, sovereign or supranational bonds) that have an Ethos ESG rating of at least A+, A- or B+ (on a scale from A+ to C).

Key Features of the SRBI:

• An issuer's sustainability performance is assessed according to its exposure to ESG risks and the way it manages them. For corporate issuers, this assessment is carried out in three stages: analysis of the governance, analysis of the sustainability strategy (transparency, clarity and consistency of objectives, ambition and management skills) and the way in which it interacts with its various stakeholders. For 'sovereign' or 'regional' issuers, the assessment takes into account the management of risks, the environmental footprint and social challenges, such as inequality, human rights and decent living conditions, as well as the management of structural risks linked to governance. The result of these analyses is a comprehensive assessment of issuers' policies and management systems (G) in relation to the environmental (E) and social (S) challenges they face;
• The analysis is completed by exclusion criteria. All corporate issuers whose products are incompatible with the values set out in the Ethos Foundation Charter - i.e. those whose sales exceed 5% in the arms, tobacco, gambling, pornography, GMO, nuclear energy or non-conventional fossil fuel sectors - or whose behaviour does not respect the fundamental principles of ethics and sustainable development, are excluded from the SRBI index. Sovereign issuers are also subject to exclusion principles. This occurs when the country's situation and institutional framework are deemed incompatible with the fundamental principles of sustainability. The assessment focuses on three aspects: international sanctions, an alarming human rights situation and non-ratification of key treaties on non-conventional weapons. Finally, in addition to exclusions linked to products and issuer behaviour, instruments identified by SIX as asset-backed securities are also excluded from the SRBI.

The aim is to encourage investment in issuers that manage their ESG issues with conviction and whose extra-financial performance is better than that of their peers.

The base universe of the SRBI is the SBI. Therefore, the SRBI follows the composition of the SBI less the exclusions determined on a monthly basis by Ethos. The index review takes place monthly, in line with the implementation of the monthly review of the SBI Index. The SRBI was launched on April 2, 2024 and was standardized on March 28, 2024 with a base value of 100 points.