Sovereign, municipal and supranational bonds are managed in-house. ERAFP's investment team is thus directly in charge of the implementation of the SRI policy defined by the Board. This approach is based on an ESG rating framework comprising ERAFP's five values (Human rights, Social progress, Employee democracy, Environment, Governance and transparency) which are declined into about forty criteria adapted to the specificities of countries and local governments.
Aside from the integration of best in class ESG criteria the Board of Directors decided to add three specific exclusion criteria for sovereign bonds. Are excluded from the investment universe, countries which:
- have not abolished the death penalty,
- practice torture,
- have recourse to child soldiers.
Our investment universe for direct investment is relatively limited since it only comprises € denominated bonds issued by OCDE countries. As a consequence rather than implementing issuer selection rules based on a ranking of European countries, it has been decided to set a minimum ESG average score to obtain in order to be eligible for investment : ERAFP cannot invest in a country with an overall ESG score which is below the average (50/100).