La Française Group's Responsible Investment (RI) Policy
05 July 2018
La Française Group’s Responsible Investment (RI) Policy details the Group’s practices in terms of integration of environmental, social and governance (ESG) factors in its asset management business.
The policy is structured into four chapters: investment concept and approach, application by asset class, implementation in the investment processes and Group level monitoring of RI policy.
Chapter 1: investment concept and approach
La Française Group is convinced that ESG factors significantly influence the financial performance of investments - both in terms of profitability and risk - and that this correlation is becoming stronger. This conviction is supported by the increasing number of academic papers. It is no longer appropriate to dissociate financial performance and sustainability. Responsible behaviour and sustainable finance are becoming synonymous with flexibility, responsiveness, innovation and therefore performance and profitability. Indeed, the question is not why integrate ESG factors into the investment processes, but why not?
La Française Group believes that climate change is a pivotal component of future economic growth and social stability. Tomorrow’s society will be based on a low-carbon economy. As such, the time has come for investment decisions to take into account climate considerations. The risks and opportunities associated with climate change are likely to affect all business activities and the financial performance of investments. A growing number of scientific studies showcase the emergence of a carbon factor influencing financial markets.
Traditional methodology applied in Socially Responsible Investment (SRI) is the exclusion of non-compliant assets based on ethical considerations. La Française Group applies such methodology to reflect internationally accepted standards like the UN Global Compact, but not only. La Française goes beyond exclusions. In its investment process, the group weighs ESG and financial factors equally. This is a positive approach that allows the exclusion of the lowest performing assets in terms of their sustainability profile.
In practice, La Française Group has developed a proprietary approach to facilitate RI, called Strategically Aware Investing (SAI). The SAI methodology stems from a partnership established in 2014 with a research company that today has become Inflection Point by La Française1. The SAI approach associates financial, strategic and ESG factors, all equally weighted...
1 Presentation in the appendix
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