Social impact investment: Towards a more inclusive economy
Amundi, a major player in European asset management, is also a pioneer in responsible impact investment. Laurence Laplane-Rigal, Head of impact investing at Amundi, tells us more about this ambition.
Have you seen growing pressure from your investors to implement responsible investment strategies?
Since its creation, Amundi has made Responsible Investment (RI) one of its four founding pillars. As a result, the ratings of our portfolio companies have always combined both financial and non-financial criteria.
The growing interest of investors has been supported - and probably accentuated - by the emergence of territorial initiatives around sustainable development.
A global framework was then established, first in Europe with the arrival of numerous labels (SRI, Greenfin, etc.), guidelines, and regulations aimed at better defining responsible investments and encouraging them.
The movement spread out fast, particularly in the United States, with the creation of the Sustainable Development Goals (SDGs) enacted by the United Nations; the SGDs serve today as the basis for social and environmental impact.
This growing trend reinforces the idea that the finance industry is truly committed to this ambition to contribute to the common good. But at the same time the question is how to make clear and readable the huge amount of information given to the retail investor, who might have trouble finding his or her way despite a real desire to invest responsibly.
What are the ambitions you have set for yourself to meet these customer needs and expectations?
Once again, more than an ambition, responsible investment is part of Amundi's raison d'être.
To illustrate this, let's take the example of the high social impact fund. It is invested in unlisted securities (equity and debt) of small and midsize companies focused on social utility and mutual help. The roadmap set up in 2018 aimed to increase the fund from €150 million to €500 million in assets under management by 2021 and establish it among the regional banks of Crédit Agricole Group in France. Today, with €500 million in assets under management, Amundi has of course set itself new, more ambitious objectives to keep the fund growing.
We should point out that this success has been made possible largely thanks to nearly one million1 committed savers through their employee savings schemes. That said, if we want the economy to reach a higher level of commitment one day, the participation of commercial companies and institutional investors is still largely lacking. For those, I believe an educational effort is needed to raise their awareness of the interweaving of social and environmental issues.
In order to get large investors (corporate and institutional) on board, we probably need to change the angle and approach the environmental transition from the perspective of its necessary social inclusion component. We are now talking about a "fair transition", which combines environmental impact (and therefore a certain level of financial return) with social inclusion.
What is the level of education and transparency that you implement to share the performance of your funds with savers and investors?
I would say that there are two levels of education: the one aimed at investors, which we will come to, but also the one aimed at the invested companies, which is just as critical.
In addition to establishing a rating - both financial and non-financial - for the companies in portfolio, Amundi establishes a permanent dialogue with these companies. Amundi has set up a voting policy fitting its responsible investment strategy and votes at 95%1 of the shareholders general meetings. This is possible thanks to the entire value chain, from ESG to custodians such as SGSS.
Returning to social impact investment activity, a dedicated website presents the impact reporting2 that illustrates the performance of the high social impact fund mentioned above. The performance of the fund must be considered as the result of combining social impact and financial performance. We have chosen to highlight simple impact measurement indicators, which have been co-constructed with the companies in our portfolio: i.e, the number of homeless people housed, the number of jobs created or the number of micro-credit beneficiaries… those are indicators that a retail investor considers tangible and understandable.
I am convinced that earning our clients’ confidence is a common responsibility of all players in the asset management chain, from the analyst to the custodian, including of course the manager and salespeople.
Laurence Laplane-Rigal, Head of Social Impact Investing, Amundi
1Amundi internal source