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Rothschild & co Asset Management

PRI reporting framework 2018

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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

In accordance with the Energy Transition Law in force in France and our convinctions, our RI policy includes Carbon emissions related issues; we are able to calculate the carbon intensity of both (i) our directly managed funds (equities/ FI/ convertible bonds) and (ii) our funds of funds (long only).

Regarding Directly managed funds:

- we explain the gap in terms of carbon intensity  between our portfolios and the reference index (is it related to sectors selection? stock picking? etc.)

 - we provide a carbon picture of the funds including the concentration of the carbon intensity per sector and companies

- we focus on the TOP 5 carbon intensity contributors: we analyze their practices, initiatives, objectives, trajectories in terms of emisions and we thus assess the carbon risk associated. 

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

Rothschild Asset Management ("RAM") has integrated Environmental, Social and Governance (ESG) issues into its investment processes and policies for a few years; (i) as a responsible and committed investor, we have created an ethical investment framework and we have built a dialogue with our participations on the ESG issues and (ii) and as a responsible fiduciary investor, we have integrated ESG risks and opportunities into our investment processes to protect and prepare our portfolios.

Our RI policy includes for instance:

- An exclusionary policy that ensures an ethical base to all our investment vehicles,

- A sustained policy of dialogue and engagement (voting policy,etc.),

- The integration of ESG factors in our analyses which allows us to have a strenghtened vision of the companies we invest in and which participates in our convexity analysis,
- Climate-specific indicators on our portfolios, in order to study more precisely the risks and opportunities associated with them.

Focus on assessing the trajectory of both ESG practices and climate policies is key in our RI philosophy and dialogue with companies we meet.

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

Three types of SRI processes are co-existing within our portfolio management expertises and most of our reported assets comply with one of them:

Most of our directly managemed funds (equities/ FI)  follow a comprehensive process: exclusions of companies that do not comply with the Oslo and Ottawa Treaties and a number of fundamental principles, management of the portfolio's ESG rating  (common minimum portfolio rating objective ) and calculation of carbon intensity, commitment policy, etc.

Some of our directly managed funds follow a streamlined process: compliance with the Oslo and Ottawa treaties and construction of an ESG reporting (calculation of the portfolio ESG rating and carbon intensity).

A part of our alternative investment funds (long only fund management) follows also an ESG process relying on the compliance with the Ottawa and Oslo Treaties, the verification of ESG questionnaires sent to fund management companies we invest in to check their ESG practices and construction of ESG reporting tools (calculation of the portfolio rating and carbon intensity).


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

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

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          In accordance with the Energy Transition Law in force in France and our convinctions, our RI policy includes Carbon emissions related issues; we are able to calculate the carbon intensity of both (i) our directly managed funds (equities/ FI/ convertible bonds) and (ii) our funds of funds (long only)

Regarding Directly managed funds:
 we explain the gap in terms of carbon intensity  between our portfolios and the reference index (is it related to sectors selection? stock picking? etc.)

we provide a carbon picture of the funds including the concentration of the carbon intensity per sector and companies

 we focus on the TOP 5 carbon intensity contributors: we analyze their practices, initiatives, objectives, trajectories in terms of emisions and we thus assess the carbon risk associated.
        

URL/Attachment

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

02.4. Additional information [Optional].


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.

There are three broad categories of conflict of interest relevant to Rothschild Asset Management:

  1. one which might arise between clients of separate Business Lines as the Group has four main activities: Investment Banking, Merchant Banking, Wealth and Asset Management;
  2. one which might arise among a same Business Line;
  3. one which might arise between an employee’s family or him/herself and  his/her professional function.

Our overriding principle is to act in the best interests of the client. Sometimes, there might be contradictory interests that make it difficult for Rothschild to fulfill its duties impartially. Members of staff must discuss material conflicts with their relevant Compliance Officer as soon as they arise and escalate as appropriate in accordance with their local business procedures. In addition to procedures for reviewing and discussing conflicts on a case-by-case basis there are additional procedures that might be implemented, specific to each business line, to allow us to demonstrate that a particular type of conflict is being appropriately managed and monitored. All these procedures are designed to maintain the confidentiality of sensitive information and address real or perceived conflicts of interest.

03.3. Additional information. [Optional]

In general, Rothschild Asset Management’s employees must respect ethical guidelines published by the AFG (Association Française de Gestion), the French Association of Asset Management. The employees of the company must pay particular attention to clients' interest.

At all times, employees must strive to manage clients’ interest efficiently, with loyalty, neutrality and discretion. They must strive to manage the assets, both collectively and individually, of which they are in charge, with complete independence. In this respect and at all times, choices regarding which stocks to buy or sell and the date of purchase and sale must be conducted only in the clients' best interest.

The Markets in Financial Instruments Directive (“MiFID”) requires targeted firms to implement a procedure dealing with conflicts of interest. Such procedure must cover any circumstances which might create a conflict of interest. Therefore the Rothschild Group has set up a detailed dedicated procedure in order to identify and anticipate cases in which conflicts of interest might arise.

By “conflict of interest” Rothschild & Cie Gestion Group means “any professional situation in which evaluation or decision-making power of an employee, a company or an association can be influenced or affected in its independence or integrity by a third-party personal opinion or lobby”.

The Group relies upon the existence of robust and clear “Chinese Walls” to prevent conflicts of interest arising between separate Business Lines. The "Chinese Wall" procedures ensure that the Bank can conduct its different activities independently from each other, thereby avoiding situations that could lead to a conflict of interest.


SG 04. Identifying incidents occurring within portfolios (Private)


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