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Ircantec

PRI reporting framework 2017

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Indicate what norms you have used to develop your investment policy that covers your responsible investment approach.

01.5. Describe your organisation’s investment principles, and overall investment strategy, and how they consider ESG factors and real economy impact.

Principle of the approach

Long-term investment performance not only depends on the impact of the financial strategy, it also depends on the company’s interactions with its social, economic and financial environment. The inclusion of SRI criteria in portfolio management allows a full assessment of risks and opportunities of companies in which Ircantec invests.

The Institution believes that respect of these criteria allows companies to have a positive impact on their valuation, improve their social behaviour and reduce the risks to which they are exposed and to which they expose the community.

The performance sought through investment of the Institution’s assets must contribute to the development of the community.

01.6. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

1. Shares and corporate bonds

Approach adopted by Ircantec

• Reference framework

Ircantec will assess companies’ social responsibility in particular by examining:

- their ratification of the UN Global Compact; those that have not ratified must be able to explain their position,

- their participation in the economic development of the regions where they are located,

- their remuneration policy, which should allow their employees to enjoy a satisfactory standard of living,

- measures taken concerning the health and safety of workers, the promotion of social dialogue and employee training.

• Exclusion

In principle, no industry is excluded from the investment universe.

This rule applies in the following areas (non-exhaustive list):

. forced labour and child labour,

. violation of the freedom of association,

. major industrial accidents and environmental pollution

attributable to the company’s negligence,

. corruption, money laundering and support for authoritarian

regimes.

The following companies will be excluded:

- companies that manufacture and market weapons prohibited by international conventions,

- companies that are guilty of failing to abide by the following fundamental principles:

      . Universal Declaration of Human Rights,

      . ILO declaration on Fundamental Principles and Rights at Work,

      . Rio declaration on the environment and development,

      . UN conventions (in particular anti-corruption).

-  Companies with heavy coal exposure.The exclusion criteria are as follows:
                   . For mining companies, excluding any companies which coal-related turnover represents more than 1% of the overall market share,
                   . For energy-producing companies, the exclusion of any companies which coal-fired energy mix is greater than 30% or which carbon intensity exceeds 500 gCO2 / kWh,
                   . For the two sectors concerned, the turnover linked to coal must not exceed 20% of the total turnover.
                   However, there may be agreement on a case-by-case basis, particularly if the company demonstrates a strong commitment to energy transition. For example, a GreenBond issued by a company meeting the criteria for divestment can be subscribed as it allows an improvement of the energy mix of the activity.

 

 

• Environmental, Social and Governance (ESG) selection

The Board requires that management companies adopt «Best in class» investment processes based on the selection of the top-rated companies in each sector in ESG areas. More specifically, Ircantec would like to select companies that:

- focus on human aspects and foster social progress,

- are concerned with the preservation of the environment and sustainable local development,

- have exemplary governance.

For the Ircantec Board of Directors, these values are developed as follows:

Focus on people and promote social progress

To assess the degree of companies’ compliance with human rights and the measures they take to promote

social progress, Ircantec refers to:

- companies’ respect for fundamental social principles,

- non-discrimination in all its forms, in particular with respect to the elderly and women,

- freedom of opinion and expression, including the right to organise,

- human rights at work.

The Institution is also particularly attentive to the issue of work and employment in its different dimensions and

favours companies that:

- respect the fundamental rules of labour law and social partners,

- contribute to the development of employment both quantitatively and qualitatively (promotion and career

development, male/female gender equality, refusal of child labour, etc.),

- have pre-emptive employment strategies (lifelong learning, development of acquired experience, retraining,

restructuring support),

- have specific projects that promote the development of employment (research and development).

Preserving the environment and sustainably local development Ircantec will assess the environmental responsibilities of companies by taking into account the environmental impact of their activities and their production process, including the following aspects:

- the fight against climate change and the control of CO2 emissions,

- energy efficiency,

- prevention of industrial accidents,

- management of water resources and waste treatment,

- the development of «green jobs».

Establishing exemplary governance Ircantec intends to determine its choices by evaluating companies with respect to several major themes:

- the existence and respect of rights of the various control bodies,

- independence and competence of directors,

- transparency of executive compensation,

- internal control and conflict prevention mechanism,

the fight against corruption and laundering, business ethics,

- transparency concerning the activity, financial and nonfinancial situation as well as development strategy.

 

2. Sovereign bonds

The identity and values of the Institution tend to lead it towards supporting public policies that plan over the long

term to ensure resources for future generations and place public interest at the centre of their ambition.

Approach adopted by Ircantec:

The Ircantec Board of Directors has decided to focus onStates that:

• promote social progress

Ircantec will assess the social dimension of a State especially with reference to the following aspects:

- education,

- health.

• implement environment-friendly policies

The Institution is particularly sensitive to the following environmental aspects:

- protection of natural resources,

- the fight against global warming,

- protection of biodiversity.

• have exemplary governance

Ircantec pays particular attention to the actions implemented by States in terms of:

- fighting corruption,

- freedom of expression,

- solidarity between countries.

• have ratified international treaties and conventions (including prohibited weapons).

 

3. Real Estate

SRI principles on property investments are applied in the two following domains:

• social – by investing in Ehpad1 or nursing homes as well as in student halls of residence (in particular in

the form of «Club Deals» or open funds, depending on opportunities),

• environmental – through:

- contracts to improve office buildings or residential buildings,

- the scheme’s sustainable development policy, for existing assets, aims to improve the environmental quality

of buildings and the quality of life for tenants.

 


SG 02. Publicly available RI policy or guidance documents

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

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Indicate if your organisation’s investment principles, and overall investment strategy is publicly available

02.4. Additional information [Optional].

Our SRI Charter includes specific subsections regarding :

- Asset class-specific guidelines (pages 4 - 6)

- Screening/exclusion policy (page 4)

- Active shareholding policy (page 7) :     

     Our voting policy includes specific guidelines regarding :

-      Corporate governance factors (pages 5-6)

-       Social factors (pages 7-11)


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Our conflict of interest policy is laid out in our bylaw regarding ethics considerations. It includes specific provisions on board members’ reporting of any potential conflict of interest regarding their mandates. It also contains provisions on the use of financial privileged information and perceiving unfair advantages likely to compromise our administrators' independence.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

          Ircantec is using a controversy provider (Vigeo Eiris) which monitors portfolio companies. If a controversy occurs, we ask the portfolio managers to provide us with their own analysis of the situation. After the review of the situation, depending of the accuracy and the gravity of the situation, we engage with the portfolio managers in order to sell the position or to engage with the company.
        

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