Broader integration of ESG criteria

Today, we must go beyond simply developing specific ‘SRI’ processes and products; the aim now is to ensure that environmental, social and governance (ESG) criteria are taken into consideration in all management products and processes.

The depth and precise forms of this integration may vary according to asset class and investment process, but the common goal behind this broader integration is to improve the consideration of the ESG risks that can have a significant impact on the value of a sovereign asset or a company.

Responsible Investment Policy Core principles

The strategy of Groupama AM is founded on the company’s support for the major universal principles internationally agreed by the UN, the OECD and the Principles for Responsible Investment (PRI), and focuses on three main ambitions:

  • To promote the incorporation of Environmental (E), Social (S) and Governance (G) (ESG) issuesby raising the awareness of all our managers to the need to integrate these factors into their issuer selection criteria for portfolio composition and management.
  • To communicate the goals of RI (Responsible Investment) to all entities of the management company(management, marketing/commercial/reporting/communication etc.), in order to promote Responsible Investment to institutional and private investors and to the distribution networks of the Group and more generally to the financial industry as a whole.
  • To support our institutional clients in their own sustainable development strategy, and to incorporate Responsible Investment as a powerful tool of management for their engagement as responsible investors, in furtherance of the action principles laid down in their own corporate social responsibility (CSR) policy statements.

Monitoring compliance with ESG rules :
Internal Control

External Control

Internally, monitoring and control metrics are specially adapted to the defined SRI targets and implemented for each investment process. For example, in the case of the “best in class” management process for the RI products “Euro Capital Durable” and “Groupama Crédit Euro ISR”, three levels of control are exercised:

  • In real time: the manager ensures that all the securities in the portfolio genuinely belong to the eligible universe by means of advanced charting tools (Euro Capital Durable) and ESG ratings (Euro Capital Durable/Crédit Euro ISR).
  • Before placing an order: the order is passed through the value constraints server, and if it does not qualify for the eligible universe the manager receives an alert message and the order is blocked.
  • After placing the order: Risk Control checks that the securities in the portfolio comply with the specifications of the fund’s defined SRI process (eligible universe). This control mechanism is already in effect for the Euro Capital Durable investment fund and will be implemented for Crédit Euro ISR before the end of 2016.

External Control

There is no specific external control procedure for monitoring the ESG methodology of Groupama Asset Management.  However, for several years now, the transparency of the company’s RI/SRI investment policy has been regularly evaluated/vetted by external rating agencies and by external clients, in the course of:

  • evaluation and rating of the SRI investment processes
  • calls for bids in the field of SRI for which the management company submits an offer
  • SRI label award procedures (Novethic, French public SRI label etc.)
  • the label award procedure of the French trade union committee for employee savings (CIES – Comité Intersyndical de l’Epargne Salariale)