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LBPAM La Banque Postale Asset Management

PRI reporting framework 2019

You are in Strategy and Governance » Investment policy

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

Other description (1) Aside from climate change, LBPAM also integrates a pillar whose purpose is to favour local social and economic development. By doing so, our aim is to identify companies which are promoting local employment and innovative activities, attracting local talents, and sharing technologies, skills and knowledge.

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

We consider that risks and opportunities could arise as a result of: demographic changes, urbanization, climate change, other environmental challenges, agriculture, public health and food. As such, we are deeply convinced that tomorrow’s leaders are the one which anticipate the most these issues and embrace a longer-term vision.

Our ESG approach, called GREaT, relies upon four pillars with the intent to identify companies and sectors which offer innovative solutions to these challenges. The pillars refer to:

1) Responsible governance : board effectiveness and ethics

2) Sustainable management of resources: management of environmental impacts, employees and suppliers

3) Energy transition: contribution to the low carbon economy

4) Local development: commitment to local job creation and product/service offer

The last pillar is consistent with LBPAM’s DNA, since our main shareholder is a public entity which plays an important role with regard to local development (ensuring public service in rural and disadvantaged areas).

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]

01.6. Additional information [Optional].

          
        
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SG 01 CC. Climate risk

01.6 CC. Indicate the climate-related risks and opportunities that have been identified and factored into the investment strategies and products, within the organisation's investment time horizon.

Our ESG framework GREaT is composed of four pillars which aim at identifying the companies which are the best aligned with a sustainable world. The Energy Transition is one of the four pillars and it assesses whether business models are oriented towards the economy of the future and whether they are aligned with a low carbon economy. It also encourages companies to anticipate and promote solutions to address climate change. We factor climate-related risks and opportunities into our investment strategies in 4 manners

First, we measure the CO2 emissions of our portfolios through a dedicated tool developped internally. The tool helps determining the main contributors to portfolios' CO2 emissions (sector or stock selection) and identifying companies exposed to coal activities.

Second, we systematically determine the exposure of all sectors to this challenge as the Energy Transition is one pillar of our ESG framework. This assessment is documented and reviewed on a yearly basis by the RI Team. In addition, the results serve as an input for our scoring system.

Third, the RI Team also assesses  the performance on the Energy Transition pillar at an issuer/stock level. This is done on a quantitative basis via our scoring system (called AGIR) and complemented by a qualitative assessment when appropriate. The score ranges from 1 to 10, 10 being for the worst performers. The scores are used to determine elegible universes of the RI strategies and are also integrated in all the front office tools of LBPAM's portfolio managers

Finally, we have also developped a dedicated research to determine whether a company's business model is contributing to the energy transition. This assessment consists in calculating the share of revenues generated from products and/or services which can be considered as being aligned with the low carbon economy (green share).

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

01.9 CC. Indicate whether the organisation publicly supports the TCFD?

01.10 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

Management of climate-related risks and opportunities is factored within LBPAM's ESG methodology via the Energy Transition pillar of our GREaT methodology. As such, the procedure applies throughout the organisation.

We are currently working on a set of policies to reconsider our investment to industries which we consider as being of high importance with regard to climate change mitigation. Such policies are meant to be applied throughout LBPAM as well.

1.12 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

specify

          Yearly reporting for the SRI labelled funds and the funds with at least EUR 500M of assets under the French art 173.
        

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

URL/Attachment

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

Other description (1) LBPAM has defined nine sustainable thematics which relate to renewable energies, circular economy, sustainable agriculture, green buildings, environmental solutions, health, sustainable mobility, financing the real economy and inclusive growth. Their purpose is to help identifying companies offering sustainable business opportunities relevant to each thematiuc.

02.3. 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.

According to the AMF General Regulation, LBPAM is endowed with a policy to prevent and manage conflicts of interest, including an alert process to the Compliance and Internal Control (CIC) division. This policy is available on LBPAM's website.

LBPAM Compliance Manual defines the organisation and the principles which ensure that LBPAM conducts its activities to serve its clients' best interest and treats equally each investor.

The process aims at identifying existing, or potential, conflicts of interest and implementing the appropriate organisation to prevent and manage them. An independent control is guaranteed by the supervision entrusted to the CIC department which directly reports to the Board.

The main pillars of the process are:

  • LBPAM governance which relies on a Supervisory Board and an Audit Committee composed of a majority of independent members
  • Activities' organisation complying with information barriers
  • A set of procedures covering the selection of intermediaries, the execution of trades, voting rights, remuneration policy, plurality of function and personal ethics. These procedures are regularly updated and submitted to a permanent control conducted by the CIC department.

A mapping of potential conflicts of interests is regularly updated, together with a list of experienced conflicts of interest.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within portfolio companies.

04.2. Describe your process on managing incidents

We have formalised an exclusion policy which prohibits investments in companies which have seriously and repeatedly violated one or several of the Ten Global Compact principles (Human rights, working conditions, environment and fight against corruption). This exclusion list is compulsory for RI Funds. Excluded companies are selected by the RI Team and then submitted for validation to the SRI Exclusion Committee, which is composed of Portfolio Managers of each department and the CIO. The SRI Exclusion Committee meets on a bi-annual basis and is chaired by the head of Research.


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