Our integration process relies on the following key elements:
Exclusion criteria :
We ban companies that have land Mines & Cluster munitions activities and identify companies that do not respect Fundamental Principles in the field of human rights, labor, environment and anti-corruption, criteria which are mainly derived from the UN Global Compact's ten principles.
Qualitative analysis: For each sector we invest in, we identify the main ESG challenges and opportunities (common approach and analyses with the Listed Equity investments).
We then analyze the response of companies (through our own analysis or through external research): for each E, S, and G criteria we highlight strengths and weaknesses. We pay a particular attention to the trend in terms of initiatives and integration of E, S and G problematics by TOP management.
We also identify the main carbon contributors of each portfolio and we analyze these companies specific carbon risks and trajectory.
Quantitative analysis :
An ESG score is attributed to each company. We have created an internal ESG rating for each company in our investment list for both European and US equity and FI. This is partly based on the independent ESG rating provided by MSCI which is enriched with our own assessment of ESG analysis for each company we cover. Our rating methodology includes both absolute criteria to take into account sector challenges and relative criteria to highlight the best / worst performers among the sectors we invest in.
Common objective: We set a common minimum rating objective among our portfolios. Ratings and data are increasingly integrated in our funds management tools (reporting / common data base…).