Through its investment policy, ERAFP aims to encourage issuers to respect international environmental, social (human rights and labour law) and governance standards. ERAFP's mandated investment managers may, after applying a shareholder engagement approach, exclude certain issuers from their portfolios in the case of breaches of certain international standards or non-compliance with environmental or socially responsible principles. In such cases a call for standard exclusion is made. The right the Scheme reserves to apply, in the case of the failure of shareholder engagement approaches, a standard exclusion is designed to protect ERAFP's reputation as a socially responsible investor.
The dialogue is initiated by the ERAFP delegated manager concerned by the investment or by ERAFP itself in the case of a direct investment. The securities of a company with which discussions have been initiated following a proven breach of international standards may be kept in the portfolio for as long as a shareholder engagement initiative targeting the controversy identified is in progress. If shareholder engagement measures are not enough to ensure that the company responds adequately to the issues raised or is in the process of responding, other actions will be considered:
- intense dialogue through the delegated manager in the context of preparing its vote at the general meeting of shareholders;
- any other means that protect ERAFP's interests;
- lastly, sale of the securities by the delegated manager.
ERAFP could also participate to the issue of a public statement, encourage its asset managers to file a shareholder resolution, vote against re-election of the relevant directors or vote against other relevant resolutions