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DNCA Finance

PRI reporting framework 2019

You are in Strategy and Governance » Innovation


SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

Our ambition is to offer an innovative and differentiated ESG process that will evolve according to the emergence of new issues. To this end, our RI approach and our ESG analysis are based on two concepts : Corporate Responsibility (CSR) and Sustainable Economic Transition. This combined analysis is based on a deep understanding of social and economic trends along with well-recognised SRI expertise.

Our innovation is based on the following:

- Proprietary Model: ABA, Above and Beyond Analysis

- In-house ESG analysis (no external providers) based on a proprietary model and internal collection of data

- Very regular meetings with the companies we invest in (approx. 150 company meetings per analyst) which allow our database to be very reactive to any changes and updated constantly

- Systematic integration in companies' valuation (via the premium risk) - model proposed to every PM

- Dedicated range of SRI products: DNCA INVEST BEYOND (French SRI Label)

- Conviction management and impact driven

We are convinced that Corporate Responsibility is not an investment opportunity anymore but provides a great pool of information to anticipate companies’ risks, especially in their relations with their stakeholders: employees, supply chains, clients, local communities, governments, shareholders…, across sectors and the activities. Our mission is to finance the economy based on a long-term perspective. The sustainable economic transition is before anything else a source of tremendous investment opportunities. Our objective is to identify relevant sustainable investment themes in order to select the winners of today and tomorrow.

Internal Research

- Control and understanding of the analysis
- In-house development and flexible model
- 4 independent and complementary pillars of ESG analysis (Shareholders, Environment, Employees, Society)
- Data sourcing from companies' reporting, meetings and newsflow

The aim is to offer a detailed analysis with high added value to complement the traditional financial valuation. DNCA Finance ESG Model is built on this principle and provides ESG recommendations of which we control the entire construction.

The information coming from companies form the major part of our input. Regular dialogue with top managements and site visits reinforce our knowledge and constitutes very valuable inputs in our analysis.

We have developed a proprietary model shared by all DNCA Finance investment teams. This tool will integrate continuous updates according to new ESG trends emerging and becoming material.

Global integration

ESG analysis is complementary to traditional financial analysis by identifying emerging risks and new drivers on a long-term basis. The objective of ESG integration is to deepen our fundamental knowledge of companies in order to select in our portfolios the best performing and best positioned on the long run. A conversion map enables to integrate the ESG recommendation into companies’ valuation through the risk premium.