With its long history of commitment to the principle of responsible investment, Groupama AM continues to affirm its conviction that the integration of environmental, social and governance (ESG) factors into the heart of an issuer’s management strategy can only improve the issuer’s performance.
Our responsible vision of finance is also expressed in a structured control mechanism that enables us to hedge our operations and evaluate the risk exposure of our clients. We deploy recognized high-performance portfolio construction tools to optimize the risk budgets of each portfolio.
Finally, our commitment to our clients and shareholders is also expressed by our own choice of clear, systematic and proactive governance.
The core mission of Groupama Asset Management is to protect the interests of its clients at all times. Individual commitments to each client are integrated in an overall approach that aims to ensure perfect security and serenity in the management of the entrusted investments.
PROXIMITY BASED APPROACH
Groupama Asset Management has made proximity the cornerstone of its client relations. It is this daily proximity that confers the ability to provide clients with reliable and responsive information, and to identify the specific benchmarks that determine the adaptation of its services to the new regulatory developments, such as Basel 3 and Solvency 2. Each client is kept regularly informed about the financial markets and the various financial products available.
OPTIMIZED POLICY FOR ORDER EXECUTION
The execution of a client’s order is subject to very strict in-house measures at Groupama Asset Management, with the aim of controlling and maximizing the results. The optimization policy is based on five rules, which constitute five commitments of Groupama AM:
This approach is in compliance with the application of the Markets in Financial Instruments Directive (MFID: conference of French Financial Markets Regulator AMF), which has been applicable since 1 November 2007.
Shareholder engagement is a crucial element of Groupama Asset Management’s SRI strategy and forms part of its overall ethic of fiduciary duty and social responsibility toward its clients. This proactive approach, expressed in actions and initiatives, has made Groupama AM a major driving force for progress in social responsibility.
Shareholder engagement designates all the positions, actions or initiatives that a player such as Groupama AM can take to guide companies towards a higher level of social responsibility and encourage them to improve their ESG practices. For Groupama AM, shareholder engagement has 3 fundamental modes of action:
DYNAMIC VOTING POLICY
For Groupama AM, voting in general meetings of shareholders is the first action of every actively responsible manager and is an integral part of the management process. Through its voting policy, Groupama AM encourages companies to go beyond regulatory constraints to promote the long-term increase in value of the investments.
Groupama AM also encourages the spread of best practices in governance and professional ethics, economic development, social cohesions and environmental protection.
The guiding principles of the voting policy are reviewed annually, because it is important to consider all the progress and change that can occur in a company or a sector of activity, such as changes in financial laws and regulations, changes in codes of governance, integration of market practices and recommendations from internal studies.
The commitment of Groupama Asset Management goes well beyond these exclusions, which were decided after putting the issuer selection methodology into effect. Since 1 May 2009, the group has applied a strict policy of exclusion of investment in companies known to be implicated in activities relating to cluster bombs and/or anti-personnel mines, applicable to all its portfolios under management. These activities concern production, storage, distribution and commercialization.
Ensuring the protection of financial operations is a major preoccupation for Groupama Asset Management. That is why the group has opted for a specific organization of its internal control setup, which consists of several specialized teams. These dedicated teams are responsible for limiting risks and controlling the various stages of the process, in order to guarantee every client total security of their investments.
The Risks department, which is in charge of second-tier control of investment risk (financial management of the mutual funds and mandates portfolios) is organized into two complementary functions: Management Framework Control (compliance with both specific and regulatory investment limits), and Risk Management (controlling the risks of financial management).
The Compliance team handles the regulatory and legal risks and the risks relating to reputation. For its part, the Internal Control team evaluates and manages operational risk. Finally, the CISO (chief information security officer) is responsible for managing the security risks relating to the information systems.
To ensure perfect application of the internal procedure and to cover different types of risk, three committees have also been established:
• Monthly risk committee: handles the risks relating to the financial management of investment portfolios. Every quarter, this committee also takes on a highly strategic dimension with the participation of the CEO, the heads of the three operational departments of Groupama Asset Management (Development, Management and Support activities) and the Head of the Audit, Controls and Legal department;
• Internal control committee: ensures the cohesion and efficiency of the entire internal control system;
• Audit committee: receives and examines the annual accounts, the evaluation report on the internal control system and the activities of internal audit, internal control, compliance and the CISO.