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ERAFP - Etablissement de Retraite Additionnelle de la Fonction Publique Pension Scheme

PRI reporting framework 2020

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Outputs and outcomes

LEA 09. Number of companies engaged with, intensity of engagement and effort

Indicate the proportion of companies in your listed equities portfolio with which your organisation engaged during the reporting year.
We did not complete any engagements in the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion of companies engaged with, out of total listed equities portfolio

Individual / Internal staff engagements

1
0.21

Collaborative engagements

105
22

09.2. Indicate the breakdown of engagements conducted within the reporting year by the number of interactions (including interactions made on your behalf).

No. of interactions with a company
% of engagements
One interaction
2 to 3 interactions
More than 3 interactions
Total
100%

09.3. Indicate the percentage of your collaborative engagements in which you were the leading organisation during the reporting year.

Type of engagement

% leading role
  Collaborative engagements

09.5. Additional information. [Optional]

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). 

 


LEA 10. Engagement methods

10.1. Indicate which of the following your engagement involved.

(specify)

          Engagement could go through statement on a particular issue for a sector or even broader
        

10.2. Additional information. [Optional]

This year, ERAFP participates to several collaborative engagements. For some of them, ERAFP was lead investor. 

For all engagements, letters or emails are sent to inform and engage the dialogue with the company. For some of them, ERAFP could lead or participate to meetings with Investor relations, CSR teams and when it possible, board members.


LEA 11. Examples of ESG engagements

11.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

ESG Topic
Executive Remuneration|Climate Change|Sustainability reporting
Conducted by
Objectives

Our objective is to make sure that the companies we target have implemented a robust strategy for a transition to a low carbon economy and to reach carbon neutrality by 2050. In 2018, through the Climate Action 100+ initiative that ERAFP has joined when it was launched at the end of 2017, the objectives for companies have been organized in 3 points: 

- Implement a strong governance framework which clearly articulates the board's accountability and oversight of climate change risk

- Take action to reduce greenhouse gas emissions across their value chain

- Provide enhanced corporate disclosure in line with the final recommendations of the Task Force on climate-related Financial Disclosures (TCFD) and sector-specific GIC Investor expectations in climate change.

Scope and Process

We were lead investor of the IIGCC-led initiative /corporate programme on utilities sector and are the lead investor with two companies for Climate Action 100+ since the end of 2017. The engagement initiative started in early 2015 and we had discussions with three companies from Utilities since then.

In 2017, the engagement initiative has been integrated in the Climate Action 100+ initiative. This initiative plans to engage with the world’s largest corporate greenhouse gas emitters to curb emissions across the value chain, strengthen climate-related financial disclosures, and improve governance of climate-related risks that may affect companies. ERAFP remains lead investor for the engagement with the two companies it was leading through the IIGCC initiative since 2015. 

In 2019, ERAFP had several written exchanges and meeting with each company. The two companies have made progress on some issues of the engagement but still have to improve on some others. For instance, they have made more progress for setting intermediate and long term emissions' targets but still have to progress on their climate-related lobbying.

The engagement will accelerate for the next 2 years. 

Outcomes
ESG Topic
Executive Remuneration|Climate Change|Sustainability reporting
Conducted by
Objectives

In 2017, ERAFP has joined the IIGCC engagement sub-group on auto sector. At the end of 2017, the engagement has been included into Climate Action 100+ initiative. 

Investors expectations for this engagement are: 

- a proper governance structure ensuring that board and management responsibilities regarding climate change risks and opportunities are clearly defined

- the definition of a long-term strategy which makes the business resilient to climate change and which incorporates key industry trends

- a robust plan to reduce the greenhouse gas emission 

- companies' engagement with public policy makers to accelerate the transition to a low-carbon economy in line with a 2°c scenario

- transparency and disclosure

Scope and Process

ERAFP is support investor for the engagement with two auto sector companies. Since 2017, ERAFP has participated to several discussions with the two companies based on the IIGCC's investor expectations of automotive companies' guide and Climate Action 100+ framework. 

In 2019, we mainly discussed with one of the two companies. We continued to encourage the company to better disclose on its climate strategy and to improve its climate-related governance. The company is one of the best players in its sector with SBTi validated targets on 3 scopes but have to improve its communication on its climate-related strategy and especially climate risks. 

Outcomes
ESG Topic
Climate Change
Conducted by
Objectives

In 2019, ERAFP continued its participation to the engagement led by Shareaction called the Investor Decarbonization Initiative. This initiative encourages companies to adopt at least one of the following objectives:

- RE100: to supply with 100% renewables electricity

- EP 100: to increase its energy efficiency

- EV 100: to use electric vehicles

- SBTi: to adopt science-based targets to reduce their carbon emissions 

 

 

Scope and Process

Letters are sent to companies, followed by calls or meetings with companies to discuss with them about the objective to adopt. 

In 2019, ERAFP has signed 25 letters to companies in its portfolio to encourage them to adopt one of the objective.  

Outcomes
ESG Topic
Diversity
Conducted by
Objectives

Mirova, an asset manager mandated by ERAFP, leaded an investor coalition to support the Women’s Empowerment Principles and achieve Gender Equality. 

 

 

Scope and Process

ERAFP signed the statement led by Mirova to support the Women’s Empowerment Principles and achieve Gender Equality in the workplace. In addition to calling for increased transparency on this topic, the purpose of this statement was to encourage companies to sign the Women’s Empowerment Principles. This set of 7 principles, established by the UN Global Compact and UN Women, aims at helping companies create and implement effective equality initiatives that benefit workers, management, society and shareholders. 

Outcomes

11.2. Additional information. [Optional]


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