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ERAFP - Etablissement de Retraite Additionnelle de la Fonction Publique Pension Scheme

PRI reporting framework 2017

You are in Direct - Listed Equity Active Ownership » Engagement

Engagement

Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Indicate what your engagement policy covers:

01.3. Attach or provide a URL to your engagement policy. [Optional]

01.4. Provide a brief overview of your organization’s approach to engagement

ERAFP intends to be an active shareholder and, to that end, maintain dialogue or engage with those issuers in which it invests or with the authorities that define its investment framework. Accordingly, in 2012 ERAFP adopted shareholder engagement guidelines, which it updates yearly. Its engagement guidelines establish priority engagement themes for the year as well as the voting policy that ERAFP's delegated asset managers must apply at general meetings. The ERAFP engagement principles are based on issuers' ESG transparency, respect of national and international rules and long term investment.

In 2016, ERAFP has focused in, particular on collaborative initiatives, covering the following main themes:

—the fight against climate change, the promotion of strategies to reduce corporate greenhouse gas emissions and contribute to the transition to alternative energy sources;

—combatting aggressive tax optimisation, in particular by promoting greater transparency in financial reporting by multinational groups;

—ensuring consistency between companies’ sustainable development commitments and their lobbying practices;

—the prevention of employee-related risks in the supply chain

01.5. Additional information [optional]


LEA 02. Reasoning for interaction on ESG issues (Not Completed)


Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

other description

          The themes and sectors to be targeted are defined in collaboration with our Board of trustees.
        

03.3. Additional information. [Optional]

Then, the selection of individual companies to be targeted is made internally based on an analysis that include the following criteria:

 Size of ERAFP holdings and duration of shareownership

 Location of headquarters (we will consider having more influence with French or European companies)

 ESG ratings and ranking of the company within its sector over the past three years

 Existence of controversies related to the engagement theme and level of responsiveness


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take following your engagements.

04.3. Indicate whether your organisation defines milestones and goals for engagement activities carried out by internal staff.

04.4. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

04.5. Additional information. [Optional]


Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements

05.3. Additional information [Optional]

The themes and sectors to be targeted are defined in collaboration with our Board of trustees.

Then, the selection of individual companies to be targeted is made internally based on an analysis that include the following criteria:

- Size of ERAFP holdings and duration of shareownerhip

- Location of headquarters (we will consider having more influence with French or European companies)

- ESG ratings and ranking of the company within its sector over the past three years

- Existence of controversies related to the engagement theme and level of responsiveness


LEA 06. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take following your collaborative engagements.

06.3. Indicate whether your organisation defines milestones and goals related to engagement activities carried out via collaborations.

06.4. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

06.5. Additional information. [Optional]

Ahead of the engagement process, a letter is sent to the company so as to present the objectives of the engagement. Then during company meetings, we mention to the company the rooms for improvement that we have observed. Depending on the nature of the engagement, we either evaluate the response of the company to our questions or we evaluate the next corporate reporting released by the company if the engagement process is mainly about disclosure.


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

09.2. Additional information. [Optional]


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of engagements your organisation participates in.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

10.2. Additional information. [OPTIONAL]


Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort

11.1. Indicate the amount of your listed equities portfolio with which your organisation engaged during the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion (to the nearest 5%)
Specify the basis on which this percentage is calculated

Individual / Internal staff engagements

180 Number of companies engaged
60 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Collaborative engagements

32
13 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. Indicate the proportion of engagements that involved multiple, substantive and detailed discussions or interactions with a company during the reporting year relating to ESG issue.

Type of engagement

% Comprehensive engagements

 

 

Individual / Internal staff engagements

 

 

Collaborative engagements

11.3. Indicate the percentage of your collaborative engagements for which you were a leading organisation during the reporting year.

Type of engagement

% Leading role

 

 

Collaborative engagements

11.5. Additional information. [Optional]


LEA 12. Engagement methods

12.1. Indicate which of the following your engagement involved.

12.2. Additional information. [Optional]


LEA 13. Engagements on E, S and/or G issues (Not Applicable)


LEA 14. Companies changing practices / behaviour following engagement

14.1. Indicate whether you track the number of cases during the reporting year where a company changed its practices, or made a formal commitment to do so, following your organisation’s and/or your service provider's engagement activities.

14.2. Indicate the number of companies that changed or committed to change in the reporting year following your organisation’s and/or your service provider's engagement activities.

Number of company changes or commitments to change

Individual / Internal staff engagements

66

Collaborative engagements

10

14.3. Additional information [Optional].


LEA 15. Examples of ESG engagements

15.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

Topic or ESG issue
          Climate Change
        
Conducted by
Objectives

Our objective is to make sure that the companies we target have implemented a robust strategies for a transition to a low carbon economy

Scope and Process

We are leading investor of the IIGCC-led initiative /corporate programme on utilities sector and are the leading investor with three companies. The engagement initiative started in early 2015 and we had discussions with three companies.

In 2016, the engagement initiative published a guide “Investor Expectations of Electric Utilities Companies/ Looking down the line at carbon asset risk”. This document sets out guidance for constructive engagement by investors with the boards and management of electric utilities. We have sent this guide to the three companies and we had a call with one of them to get its feedback on the guide.

Outcomes

Progress will be measured mainly when their annual report is published as disclosure was seen as an area for improvement.

Topic or ESG issue
          Social standards in the supply chain for agricultural sector
        
Conducted by
Objectives

Our objective is improved company practices and enhanced company disclosure regarding the social dimension of the agricultural sector's supply chain.

Scope and Process

We are leading investor with one company. In 2016, we had a call with the company. 

Outcomes

Progress will be measured mainly when their annual report is published as disclosure was seen as an area for improvement.

Topic or ESG issue
          oil and gas activity in the Artic high seas
        
Conducted by
Objectives

To seek an unlimited moratorium on oil and gas activity in the artic high seas

Scope and Process

ERAFP, with three other investors, leads an investment group of 19 investors in a statement relating to oil and gas exploration in the Arctic. This statement was directed to oil and gas companies that have been involved in oil exploration in the Arctic, as well as Arctic Council members. It was an urgent call to protect the Arctic from future oil exploration activities and align national climate change pledges with the future of the region, which hosts significant hydrocarbon resources.

This statement is a part of ERAFP's involvement in an engagement platform related to offshore oil drilling in the Arctic specifically targeting 6 companies with exploration licenses in offshore Arctic waters.

Outcomes

2 companies have answered or planned to answer to our statement and are opened for further discussion. We have sent 4 follow-up letters for other companies that have not answered or whose answer was not enough convincing.

15.2. Additional information. [Optional]


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