Investors are undoubtedly in for a tough ten months, but Swiss bank Sarasin & Co is optimistic about sustainable investing in 2009. In its Sustainable Investment Guide Sarasin uses the additional funding provided by government support programmes, new political agendas, client interest and investment research as the basis for its positive outlook.

Sustainable investors are well positioned to benefit from new economic stimulus packages, the report says, as they traditionally have a strong bias towards investments in infrastructure. This is set to be a major beneficiary of the planned fiscal initiatives. Developments in the political arena will also have a positive impact on the performance of sustainable investments, the report's authors argue.

The agenda of the new US administration includes a number of important sustainability topics, such as climate change, renewable energy and energy efficiency, as well as health and education. Aside from the US, governments around the world are considering using fiscal stimulus programmes to modernise and upgrade their infrastructure and bring it into line with new environmental standards.

The report notes the increasing importance of ethical standards: as the financial crisis has deepened, good corporate governance has become even more important to investors. Corporate scandals in these uncertain times can cause severe damage to company reputations.

In this context, supply chain management is increasingly relevant. With a growing portion of the production process being outsourced to low cost countries, critical issues such as labour rights, working conditions and environmental pollution need to be treated very seriously and monitored adequately at all times.

“One of the biggest advantages we see in conducting sustainability research on companies and countries and applying sustainability ratings to them is the fact that this highlights the critical nature and viability of their long-term business practices and subjects them to important public scrutiny,”said Andreas Knoerzer, Sarasin's head of sustainable investment, in a statement.

“In times of economic hardship, when the relations between companies and their stakeholders are being tested, we expect the sustainability component of our investment style to become even more relevant to investors.”

The Sarasin Group is now represented in 18 locations in Europe, the Middle East, and Asia. At the end of June 2008 it managed total client assets of SFr 81.4 billion ($69.46 billion) and employed around 1,300 staff. Within Switzerland, Sarasin has offices in Basel, Geneva, Lugano, and Zurich.