Sustainable finance

A RESPONSIBLE VISION OF FINANCE

Convinced of the need to include Environmental, Social and Governance (ESG) factors in investment analysis and decisions, Groupama AM has put its full weight behind a rethink of its profession, in order to place Responsible Investment (RI) at the heart of a strategic vision for the long term, with generalized incorporation.

A changing world

Groupama AM aims to offer its customers a resolutely active, conviction-based management approach, with an emphasis on medium to long-term investment. This conviction-based style of investment management requires a good understanding of the transformations taking place in our society, prompt and effective identification of risks and rapid detection of the new opportunities for generating added value. ESG provides a key to understanding the three transitions that are profoundly transforming today’s corporate models:

  • Energy and environmental transition: changeover from an economy founded on fossil fuels to an economy based on low-carbon energy sources, with management of the environmental impacts of their activities;
  • Digital transition: in-depth transformation of the internal processes of companies and of their relations with their customers and suppliers and with civil society, due to the use of new technologies and their capacity to store and manage data on a massive scale (“big data”).
  • Demographic transition: consequences of social trends – ageing population, urbanization and increasing inequalities – confronting companies with new challenges in the management of human capital and customers.

Pioneer of responsible investment

The Groupama AM strategy aims to meet three key requirements:

  • Incorporate the stakes of these three transitions in the fundamental analysis of issuers
  • Formalize the integration of these considerations in our investment decisions
  • Satisfy the demands of our customers with regard to responsible investment

Sans titre

Founding signatory of the PRI

The 6 Principles for Responsible Investment (PRI)

Groupama AM is one of the founding signatories of the Principles for Responsible Investment (PRI), a key initiative for responsible investment launched in 2006 in partnership with the UN. This initiative brings together the world’s leading asset owners and investors in support of six shared principles that aim to promote long-term responsible investment and the incorporation of ESG.

Every year, Groupama AM provides a report on our ESG strategy and our performance in the domain of responsible investment. This evaluation report is available to the general public.

The 6 Principles for Responsible Investment (PRI)

  • 1/ Incorporation of ESG issues into investment analysis and decision-making processes
  • 2/ Incorporation of ESG issues into investment policies and practices
  • 3/ encouragement of transparency on ESG issues by the entities in which we invest
  • 4/ communication and promotion of PRI within the asset investment industry
  • 5/ collaboration between the signatories
  • 6/ individual reporting by each of the signatories on the implementation of the PRI.

Meeting the needs of our customers

Groupama AM proposes the gradual, pragmatic incorporation of ESG criteria into its management mandates and will assist in defining and calibrating appropriate operational criteria for investors wishing to take ESG factors into account in their investment management.

INCORPORATION OF ESG CRITERIA

SHAREHOLDER ENGAGEMENT AT GROUPAMA AM

Our approach aims to incorporate ESG in every asset class (equity, credit and sovereign bonds). The approach is based on research that culminates in a single combined financial and ESG recommendation, with the identification of the highest-risk issuers in terms of ESG, by means of the List of Major ESG Risks. Proprietary tools disclose this internal research to the relevant deciders, so that ESG factors can be incorporated in the investment process, in accordance with the specific characteristics of each asset management mandate.

A single recommendation: With our fundamental financial and ESG analysis, we aim to identify the players that are best positioned or most at risk with regard to the three transitions – digital, demographic and environmental – that are currently causing upheaval in our societies.

2016 marked a further step in the incorporation of ESG, which was initiated in 2003 with the concentration of the roles of financial analyst and ESG analyst under a single job description.

Proprietary tools: The ESG ratings and research are available to all Groupama AM portfolio managers . For example, managers have access to the NotesESG© and AvisRecherche© proprietary tools, which enable them to display the results of analyses by sector and by value.

An SRI range composed of three funds:

  • SICAV Euro Capital Durable – Label ISR.
  • FCP GROUPAMA Crédit Euro ISR – Label ISR
  • FCP GROUPAMA Etat Euro ISR

SHAREHOLDER ENGAGEMENT AT GROUPAMA AM

For Groupama AM, shareholder engagement is a deliberate and constructive initiative by one or more investors to demand that identified companies make real efforts to improve their ESG practices. Our approach is based on both individual and collaborative engagement and on our strong presence on  the Paris market.

Shareholder engagement

Individual engagement

  • Direct and recurrent dialogue on ESG subjects with the top management of the European large caps;
  • A rigorous voting policy (in place since 2001), which is updated annually. Mobilizing managers, analysts and middle office, our exercise of voting rights covers more than 200 general assemblies in all the countries of the European area.
  • In addition to voting at shareholder meetings, Groupama AM is able to hold upstream discussions with these companies on the draft resolutions to be presented at their General Meetings.

Collaborative engagement: participation in collective actions to promote shareholder dialogue as part of the PRI platform. Since 2017, Groupama AM has taken part in the actions concerning cybersecurity.

Voting policy

Report on voting 2018

Shareholder Commitment 2017

Strong presence on the Paris market

Groupama AM has been one of the leading engaged influencers on the Market since the early 2000s. Groupama AM plays a key role in various working groups, in the aim of promoting and improving responsible investment practices. Most notably, Groupama AM has chaired the Responsible Investment committee of the French Asset Management Association AFG (“Association Française de Gestion”) since May 2015 and co-chaired the extra-financial committee of the  French Society of Financial Analysts SFAF (“Société Française des Analystes Financiers”) since 2014.