CPR AM believes that investing in financial markets can be a way of fostering better practices among public and private sector players.
Selecting investments according to criteria that go beyond the simple financial aspects by introducing an Environmental (E), Social & Societal (S) and Governance (G) dimension helps to promote responsible and sustainablegrowth.
Socially Responsible Investment (SRI), the embodiment of sustainable development for the asset management industry, also offers a wider perspective on economic players which helps to assess their global risks and opportunities and therefore their long-term performance potential. To conduct this selection within the investment funds, CPR AM leverages on the extensive resources provided by Amundi Expertise ISR - the centre for extra-financial research and analysis shared by all the subsidiaries of our shareholder, the Amundi Group.
Recognising the importance of taking an active part in think-tanks on Responsible Investment, CPR AM sits at the Commission in charge of SRI at the French Investment Association (Association Française de Gestion Financière - AFG). Alongside its shareholder, CPR AM has been committed to the Principles of Responsible Investment (PRI) promoted by the United Nations Global Compact since 2006.
Our convictions are reflected in the 17 Sustainable Development Goals (
) established by the United Nations, through 3 main axes: our ESG analysis criteria, our ESG solutions and our commitment policy. For more information:
An AFNOR-certified SRI approach - Service commitment
As an extension of its commitment to responsible finance, CPR AM obtained in February 2014 the Service Commitment Certification "Socially Responsible Investment approach to portfolio management" issued by AFNOR Certification, an independent certification and evaluation body for systems, services, products and people in France. Taking into account non-financial criteria: Environmental, Social and Governance (ESG), this certification guarantees the quality and transparency of approaches to distribution networks, institutional or individual investors. It is renewed annually and is based on a complete set of assessment criteria to assess in particular:
The quality of non-financial analysis (diversification of sources, analysts' skills, impartiality in the process, reliability of tools and updates);
Compliance with SRI rules in portfolio construction;
The robustness and independence of SRI compliance controls;
The application of the voting policy and shareholder dialogue;
The completeness of the reports and information documents sent to investors.
ESG criteria integrated into all our management processes
Regardless of the active management mode adopted, the values are the subject of an ESG rating. Established on the basis of an internal reference system, these ratings are scaled from A (designating ESG best practices) to G (designating ESG worst practices).
Thus, G-rated securities are systematically excluded from all portfolios, regardless of asset class. In this category G, companies involved in the manufacture or marketing of anti-personnel mines, and/or cluster bombs, companies producing or marketing chemical weapons, biological weapons and depleted uranium weapons and companies that are in serious breach of the principles of the Global Compact are included.
The scope of the G-rated securities was extended in 2016 to issuers that generate more than 30% of their revenue from coal mining or, following a qualitative and prospective analysis, companies producing 100 million tonnes or more of coal per year. More broadly, our management teams are attentive to ESG criteria and they are taken into account in the assessment of securities, even if the portfolios concerned have not formally adopted an SRI approach. The degree of integration varies depending on the approach chosen, the investment universe and the trust entrusted by each client.
Significant non-financial research resources CPR AM's equity managers have all the ratings issued by the ESG Analysis Department, which is the non-financial analysis centre common to all Amundi group entities.
ESG Management Process - A risk-based approach
Based on the ESG Analysis team's rating framework, CPR AM has developed an "ESG approach based on risks or weak signals". We believe that the integration of non-financial data into management processes creates value over the long term if it is conducted efficiently. Our studies show that in order to take into account the materiality of ESG information, it is important to take into account both the different rating levers (criteria, components, overall rating) and regional specificities.
The ESG rating is indeed an average, subject to offsetting effects between underlying criteria, and it is therefore interesting to take into account the information directly at the level of the criteria to identify different behaviours that are likely to have financial materiality. However, not all criteria have the same materiality and it is necessary to be able to identify those that are informative. These are referred to as "weak signals". On the other hand, many environmental and social regulations are often local, which argues for a differentiated approach by geographical area.
In particular, we base our approach on the identification of the 5 most financially successful criteria (on the 15 generic criteria of the Amundi benchmark) for each geographical area (Europe, North America, Japan, Asia excluding Japan, Emerging). The identification of these 5 determining criteria is reviewed annually to take into account both an improving information history and possible changes in the market's perception of the associated financial materiality.
Our ESG approach ultimately consists in filtering the investment universe both on the basis of global ESG ratings and on the basis of ratings associated with the criteria used for the geographical area concerned.
INVESTMENT SOLUTIONS DESIGNED TO ADDRESS INVESTOR NEEDS
For several years now, CPR AM has been developing management solutions based on an SRI approach:
2006: CPR AM integrates an SRI approach into its first institutional mandate.
2007: CPR AM provides its clients with one of the first SRI money market funds: CPR Monétaire SR.
2008: CPR AM launches one of the first SRI international equity funds for an employee savings scheme.
2009: CPR AM launches the CPR Progrès Durable Europe fund, the first "European Equities" fund to take into account, in its management process, the ESG dynamics of securities across the entire portfolio ( "Best effort" approach).
2010: The bond funds CPR 1-3 Euro SR, CPR 3-5 Euro SR and CPR 7-10 Euro SR adopt an SRI approach.
2011: CPR AM is one of the first managers to offer flexible diversified management, selecting investment vehicles that comply with SRI principles, with the launch of CPR Reflex Responsable.
2012: CPR AM wins an SRI management mandate for convertible bonds and launches its first flexible SRI solidarity fund.
2012: CPR AM launches its solidarity fund, CPR Reflex Solidaire, which was awarded the Finansol label the same year.
2014: CPR AM obtains certification of its SRI approach by AFNOR.
2015: SRI assets managed by CPR AM amount to around €2 billion.
2016: SRI assets managed by CPR AM exceed €3 billion.
2017: SRI assets managed by CPR AM exceed €4.5 billion.