OUR POSITION REGARDING CARBON RISKS
Edmond de Rothschild Asset Management is strongly committed to accompany its institutional clients so that they can better address this emerging risk and thus meet their fiduciary duty and their own commitments. We also want to give them access to investment opportunities that have a positive impact on the energy transition for green growth.
- A responsible and prudent approach
Identify and manage risks, assessing the impacts of our investment decisions at the outset.
Reconcile financial performance, fiduciary responsibility and climate change solutions, avoiding knee-jerk reactions that could precipitate abrupt changes with negative short-term economic and social impacts. Understanding the extent to which risks have been integrated into the price of a security is an essential step to facilitate investment decisions.
=>Measurement of the carbon footprint of portfolios, Identification of securities/sectors at risk, individual and collective engagement.
- A proactive and positive contribution to tackle climate change
Identify and seize the opportunities in promising markets reconciling growth and sustainable development, while exercising caution on markets which are not yet fully mature in terms of volumes, financial and ESG performance and which have shown weakness in the past.
=> Assets and funds integrating the energy transition for green growth theme, green infrastructure, sustainable real estate, etc.
OUR INITIAL COMMITMENTS TO ADDRESS CLIMATE CHANGE
- A key step : signing the Montréal Carbon Pledge (see SG 14.5)
A 2°C roadmap 2017-2040 defined in 2017 in cooperation with our clients, especially the institutional investors.
In 2016, Edmond de Rothschild Asset Management developed a first public document, “Our Contribution to Tackling Climate Change”, to articulate its reflections and positions regarding the management of carbon risks and opportunities and the ways in which it seeks to support its institutional investors in fulfilling their fiduciary duty on this subject. These first reflections have been developed in 2017 with the launch of a dedicated 2°C roadmap, itself part of the 2017-2020 Responsible Investment strategy.
To know more about Edmond de Rothschild Asset Management's Climate change positive contributions, you can access our Climate brochure through this web link : http://www.edmond-de-rothschild.com/SiteCollectionDocuments/asset-management/isr/EDRAM-EN-Climate-Brochure.pdf . The key components of our 2°C roadmap is described within the additional Climate-related questions of our PRI reporting.
EDRAM focus on sectors with high carbon intensity such as cement, coal, etc. The analysis is done in absolute terms and in relative terms and include the scope 3 in a qualitative manner. EDRAM is convinced that the biggest risk are borne by 10% of the companies in less than 10 economic sectors..
On the funds levels, we concentrate our efforts on high intensive funds such as energy, and /or funds which perform well below their benchmark. Regarding our engagement policy, Edmond de Rothschild Asset Management (France) identified 60 among 180 top emitters globally over which it will concentrate its dialogue and engagement.
Our climate research also tends to focus on the climate opportunities. The review of five pillars (resource management, sources of energy, products and services, markets, and degree of resilience) has enabled us to identify 19 opportunities related to climate change, 10 of which are to be seized immediately.
It is used for all funds and especially the dedicated fund Nikko Green New Deal, a thematic fund on environment, (such as energy efficiency, renewables energy, etc). and the fund EdR Euro Sustainable Growth, whith the focus on growth opportunities including the climate solutions.