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PRI reporting framework 2018

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You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities

ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

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

01.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
100 %
Total actively managed listed equities 100%

01.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

Those strategies are best aligned with our public status and strategy as a long term fundamental investor in european listed equities.

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Screening is first used to adjust investment universe ( money-laundering and thermal coal exclusions) , ESG factors are then  integrated to the mainstream investment process by portfolio managers.Specific ESG issues (like carbon footprint reduction targets) are identified for each company depending on its sector and specificities and taken into account for investment selection and engagement with companies, the combination allows to improve the ESG scoring and the carbon footprint of the portfolio.


LEI 02. Type of ESG information used in investment decision

02.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

02.2. Provide a brief description of the ESG information used, highlighting any different sources of information across your ESG incorporation strategies.

Information received in o/o meetings with companies, obtained from research providers, press, thematic presentations organised by brokers or various national or international institutions is feeding the ESG opinion of the porfolio manager, before and during the investment.

On this basis, portfolio managers quantify ESG related risk on the equity and modifiy accordingly the total risk measure used for this equity. This in turn affects the target price and min and max weights of said equity.

02.3. Indicate if you incentivise brokers to provide ESG research.

02.4. Describe how you incentivise brokers.

ESG research is included in assessment of overall quality of research, which is (with quality of execution) one of the criteria for assessing broker performance, with a direct impact on brokerage fee allocation.

02.5. Additional information.[Optional]


LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate if your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

Sector: tobacco ( on the basis of sector classification), cluster munitions and landmines (on the basis of sector + specific research) are excluded.

Activity: we exclude companies deriving more than 20% of turnover from thermal coal

Country: an exclusion list based on incorporation tax havens is provided to our teams

Screened by

Description

Respect of the Global Compact principles is monitored and taken into account.  

04.2. Describe how the screening criteria are established, how often the criteria are reviewed and how you notify clients and/or beneficiaries when changes are made.

Controversial weapons have historically been excluded in order for the Group to be aligned with the ratification of the Oslo and Ottawa treaties by the French State. Coal is excluded for consistency with the Paris Agreement. Tobacco is excluded for consistency with public interest mission. Those criteria are stable, and the first two are publicly mentioned in our public RI Charter.


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.5. Additional information. [Optional]


LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached

06.2. If breaches of fund screening criteria are identified - describe the process followed to correct those breaches.

Following in depth discussion with the company, divestment can be decided.

06.3. Additional information.[Optional]


(C) Implementation: Integration of ESG issues

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate which ESG factors you systematically research as part of your investment analysis and the proportion of actively managed listed equity portfolios that is impacted by this analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

The ESG scoring tool is based partly on msci ratings and analysis, completed by in-house indicators
and assessments, notably on governance. Portfolio managers have the ability to correct the external
analysis based on their own research and diologue with the company.


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on a robust analysis.

09.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your integration strategy.

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information.[Optional]


LEI 10. Aspects of analysis ESG information is integrated into

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

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2a. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

10.3. Describe how you integrate ESG information into portfolio weighting.

On the basis of the ESG rating score, portfolio managers quantify ESG related risk on the equity
and modifiy accordingly the total risk measure used for this equity. This in turn affects the target
price and min and max weights of said equity.

10.4a. Describe the methods you have used to adjust the income forecast / valuation tool

On the basis of the ESG rating score, portfolio managers quantify ESG related risk on the equity
and modifiy accordingly the total risk measure used for this equity. This in turn affects the target
price and min and max weights of said equity.

Proportion of actively managed listed equity exposed to investment analysis

10.2b. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

10.4b. Describe the methods you have used to adjust the income forecast / valuation tool

On the basis of the ESG rating score, portfolio managers quantify ESG related risk on the equity
and modifiy accordingly the total risk measure used for this equity. This in turn affects the target
price and min and max weights of said equity.

10.5. Additional information.


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