Portrait of a Leading Group with 7 Principles and 2 sets of Sustainable Objectives
AG2R-LA-MONDIALE has been entrusted by its stakeholders with integrating ESG criteria in its investment process, developing a range of sustainable investment solutions and with managing a growing portion of their assets according to ESG. AG2R-LA-MONDIALE’s ESG/SRI strategy is structured around seven principles and two sets of sustainable objectives adopted in 2016 in the wake of the French law on Energy Transition for Green Growth and its article 173-VI.
1. Looking for coherence between political and financial commitments:
more than 85% of the issuers within AG2R LA MONDIALE’s portfolio are signatories of the UN Global Compact.
2. A global approach to performance and security:
Particular attention is being paid to extreme societal risks; a thorough review is also being made for the key sensitive industry criteria within the ESG lay-out and for the companies which do not comply with the commitments which they have signed up to (Global Compact).This ESG risk management framework is complementary to the risk-budgeting approach (which also includes extreme scenarios) to portfolio building in the sense it aims at securing financial returns.
3. Adaptation to all investment universe:
SRI and ESG integration now encompasses almost all asset classes (including Private Equity), strategies (including multi-management) and “territories” (Pension and insurance portfolios, employee saving schemes). The construction of SRI portfolios relies on a proprietary tool “EthiScreeninG” based on an algorithm which processes the extra-financial data both gathered by AG2R LA MONDIALE’s SRI analysts and provided by the 3 information providers. AG2R LA MONDIALE subscribes to Vigeo-Eiris, Oekom & Sustainalytics. “EthiScreeninG” is structured around 4 sustainable domains (Human capital, stakeholder capital, environment and governance), 14 sub-domains and 38 criteria. Obviously, EthiScreeninG™ allows for weighting each dimension and sub-criterion adjusted relatively to the sector.
2016 proved to be active on the front of research with the full ESG review of 25 sectors, a thorough analysis of 60 “core” issuers and research notes on five thematic issues (Energy transition, Supply-Chain…). The financing of an academic Chair with “Kedge Business School” dedicated to SRI and impact investing with an annual budget of € 100,000 which already produced three PhDs, and one book, “Finance Reconsidered”, published in 2015 in French and 2016 in English (Emerald) is one expression of that strategy. The support of the 11th edition of the FIR-PRI Award, the publication of two handbooks (French SIF, AF2i) to help institutional investors and asset managers understand the new regulation on climate reporting, and a research program with Carbone 4 to better assess the financial sector Scope 3 impact (a key issue for an insurance portfolio) participate of this progress strategy.
- With companies and issuers of the investment universe on the basis on “one-to-one” meetings (approximately 40 each on an annual basis).This is considered a key contributor to AG2R LA MONDIALE’s voting policy especially when it comes to examining controversial issues and to decide on a key resolution ahead of an AGM.
- With the partnering asset management companies (around 20) within the SRI multi-management review process.
AG2R-LA-MONDIALE’s reporting principles aim at:
- Anticipating criticisms towards SRI and ESG integration in their capacity to prove their performance and positive impacts,
- And offering its stakeholders a maximum level of transparency.
A specific module to EthiScreeninG™ has been developed, which allows measuring the effective contribution of AG2R LA MONDIALE’S portfolio to a sustainable economy.
The ESG reporting stresses the following indicators: Global Compact signatory, freedom of association, ESG remuneration of managers, number of women at board level, carbon intensity. With its new partner “Carbon 4”, AG2R-LA-MONDIALE has built up a set of six climate and energy transition indicators in line with the requirements of the new French regulation on climate reporting and is able to measure the carbon footprint of all its portfolios for all asset classes and 1-2-3 scopes.
AG2R-LA-MONDIALE’s active participation to SRI market place activities and events which it participates to or organizes stands at the heart of its SRI promotion strategy: 12 events during the last five editions of the “SRI National Week”. AG2R-LA-MONDIALE also aims at becoming a major contributor to SRI development and dissemination through several memberships: French SIF as a board member since 2013 & vice-chairman since 2014, the creation (Dec 2013) with Novethic, of the “Cercle des Investisseurs”. AG2R-LA-MONDIALE has obtained in January 2017 the new French governmental SRI label for three of its funds with an aggregated market value of € 3bn, making it at this stage the largest contributor to the success of this strategic initiative.
Two sets of sustainable objectives:
1. Reconciling economic and social performances through a financial support of actors (corporates, governmental agencies…) contributing to sustainability.
A green bond portfolio worth €900 million has been built in order to support sustainable projects. Energy transition and climate change stand at the heart of AG2R-LA-MONDIALE’s with concerns with ambitious objectives in terms of both certification (50%) and energy consumption (-30%) by 2019. AG2R LA MONDIALE also looks for a positive impact on territories through:
- Its Private Equity strategy: 65 funds, 40 asset managers, 8 strategies, € 700 million committed representing an indirect investment in 530 French companies employing around 373,000 people in France and having created 86,500 (since the entry of the fund).
- In the field of impact investing: The support, both financial (6% of its capital) and human of “France Active”: €56 mios invested, 930 projects supported and 34,000 jobs saved or created over the last three years.
2. Influencing economic actors and encouraging them to adopt better practices in the different ESG fields: in 2016, 150 AGMs, 2,500 resolutions examined, 21% opposition rate.
AG2R-LA-MONDIALE is a leading life and asset insurance group in France operating in all regions. The Group insures individuals, companies and branches to protect health, safeguard assets and income, provide for accidents and prepare for retirement. AG2R-LA-MONDIALE is a company that combines two forms of governance (joint-representation and mutualism), and boasts a unique insurance model that closely links profits, solidarity, performance and social commitment. AG2R-LA-MONDIALE has €96 Billion AuM and through a SRI/ESG framework methodically rolled out over the past 15 years ranks among top French ESG/SRI Institutions.