Concerning the external managers, two categories can be distinguished:
=> the 4 asset management firms for which we delegate the management of three of our open-ended funds and one dedicated fund: the three partners that managed equity and monetary funds on behalf Edmond de Rothschild Asset Management (France) are accountable to implement at this stage our negative screening approach related to the exclusion of companies whose business is related to cluster bombs and anti-personnel mines - in compliance with an internal policy applicable to all Edmond de Rothschild Asset Management (France)'s funds (managed in house or sub-advised).
For delegated outsourced management, we have not made any specific ESG requirements in terms of engagement so far. Only two of our four management delegations are equity funds; that said, the management companies that manage these two funds (i.e. EDR Japan and EDR US Growth) apply their own voting policy, but one of them has been reporting to us on its voting statistics for several years, and the other since the end of 2017. For the other two management delegations, one is a money market fund and the other a traditional multi-management fund - in their cases, asking them to carry out ESG engagement on our behalf with the underlying stocks would not be appropriate.
=> the asset management firms for which at least one fund is currently approved for investment within Edmond de Rothschild Asset Management Multi-Management / Funds selection and Asset allocation in external funds activities activity: for this category, as we are an investor among others within their funds, we cannot impose the implementation of an ESG incorporation policy but we are asking for a qualitative information related to their responsible investment practices in order to open a constructive dialogue with them.
In addition, after introducing its first ESG and SRI questionnaire and sending it to 257 funds managed by 117 asset management companies in 2016, in 2017 the Funds Selection team formalised an advanced ESG integration process in which the questionnaire is completed every two years and active, constructive ESG dialogue is held with asset management companies based on the analysis of information provided in the questionnaire.
This influence strategy is intended to encourage asset management companies whose funds are selected by our team to commit to responsible investment, by signing up to the PRIs for example. In 2018, through this close dialogue, we are seeking to encourage adoption of RI best practice, particularly in terms of transparency regarding key information such as the carbon footprint of selected funds.
Also in 2017, the team developed the sustainable fund selection expertise that formed the basis, in winter 2017, of the newly launched SRI mandate for the Edmond de Rothschild Group’s private clients.