ERAFP’s equity investments are made through French-registered investment funds (FCPs) whose management is delegated to investment companies.
As a result, ERAFP:
- does not directly own the shares in the portfolio but instead owns shares in the FCPs;
- does not therefore directly exercise the voting rights associated with the shares making up the portfolios.
However, ERAFP’s investment mandates specify that the mandate-holder agrees to exercise the voting rights attached to the FCP’s financial instruments in the exclusive interests of ERAFP, applies a shareholder engagement with portfolio's companies and monitors controversial issues in accordance with its orientations, and, in particular, in compliance with the SRI Charter. Asset managers' engagement plans for portfolio's issuers are discussed with ERAFP.
Nevertheless, ERAFP is determined to support, on a long-term basis, those organisations in which it has decided to invest, by exercising its responsibilities as shareholder or stakeholder in such a way as to sustainably promote, within these entities, practices that respect the values it supports. As engagement's results above demonstrate, ERAFP tends to favour collaborative engagement, in so far as:
- A group of investors can exert more influence capitalistically on a company than one investor in isolation;
- The resources needed to carry out the engagement (research, time, etc.) can be pooled between the participants;
- It facilitates the sharing of good practice among investors.
In 2019, ERAFP has engaged with 105 companies of its listed equity portfolio on different ESG issues reflecting its four prioritized thematic for engagement but also its SRI values (social issues in supply chain, climate-related issues in different sectors, tax, gender equality...). Engagement mainly has gone through letters or statements but for some companies, ERAFP could have several discussions including physical meetings (for the engagements it leads for instance).