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

PRI reporting framework 2020

You are in Strategy and Governance » Governance and human resources

Governance and human resources

SG 07. RI roles and responsibilities

07.1. Indicate the internal and/or external roles used by your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for responsible investment.

Roles

Select from the below internal roles

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

Board members:

The Board of Directors sets the general direction for the socially responsible investment (SRI) policy. It adopts the SRI Charter and any future updates to it. In order to validate the main features of this investment policy, it relies on the work done by the specialised committees.

A Board committee dedicated to SRI has been created in order to monitor decisions relating to ERAFP' SRI policy. This committee ensures compliance with the principles of the socially responsible investment charter and drafts any future updates that may be necessary.

Chief executive officer and investment officer (the management):

The management shall be the operational body responsible for the implementation of the investment policy, under the authority and control of the Board of Directors. It shall therefore prepare Board decisions regarding the main features the investment policy. It shall report, inform and, where necessary, alert the Board, via its committees, about the implementation of the investment policy, including its socially responsible dimension. By organising quarterly meetings with the SRI Board Committee, the management assists Directors in their work to adjust, enhance and monitor ERAFP's SRI policy.

External managers or service providers, Portfolio managers:

External managers are investment companies which are mandated by ERAFP to make investments in accordance with its SRI Charter. They have the duty to inform and alert ERAFP about the implementation of the Charter. On a bi-annual basis, the compliance with ERAFP SRI Charter of the investments made on its behalf is discussed during investment committee meetings with investment managers.  In order to prepare these meetings, ERAFP recourses to the services of an ESG research provider who conducts on a bi-annual basis an exhaustive review of the portfolio aiming at monitoring the compliance of ERAFP's investment with its SRI requirements. Moreover, a monthly reporting of portfolio's issuers SRI rating is requested to asset managers.

Dedicated responsible investment staff :

ERAFP's dedicated responsible investment team monitors  the implementation of ERAFP's SRI policy by asset managers, develops  asset class-specific SRI guidelines, prepares SRI reporting, ensures the coordination of votes of delegated asset managers and participates/conducts collaborative engagement initiatives.

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

2 Number

07.4. Additional information. [Optional]


SG 07 CC. Climate-issues roles and responsibilities

07.5 CC. Indicate the roles in the organisation that have oversight, accountability and/or management responsibilities for climate-related issues.

Board members or trustees

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Risk Officer (CRO), Investment Committee

Portfolio managers

Dedicated responsible investment staff

External managers or service providers

07.6 CC. For board-level roles that have climate-related issue oversight/accountability or implementation responsibilities, indicate how these responsibilities are executed.

As we said before, a board committee dedicated to SRI monitors decisions relating to ERAFP's SRI policy including climate-related issues. Quarterly meetings are organised with the SRI board committee during which climate-related issues could be discussed.

Specifically, on a quarterly basis, a report on ERAFP's engagement activities, including engagements related to the priority theme of tackling climate change, is presented. On a bi-annual basis, the portfolios' SRI performance, including the environmental performance, are presented. Finally, on an annual basis, the SRI team presents the results of the portfolio's climate-related risks and opportunities evaluation to the SRI committee. All those information help board members to monitor and oversee progress on climate issues.

The board also receives training on climate-related issues on a regular basis.

Since the beginning of the Scheme in 2005, the board takes into account climate-related issues each time it reviews or makes guiding-decisions. In 2016, ERAFP’s board of directors validated the revision of the SRI Charter based on principles including "measurement of the effective impact of applying ESG criteria in the context of best in class, shareholder engagement and steady reduction of the portfolio’s carbon footprint is a growing priority for ERAFP’s stakeholders". In 2019, the board validated ERAFP's disengagement of coal and the addition of a new criteria into SRI framework to evaluate the compliance of the strategy of issuers from sectors facing high stakes related to climate change with the Paris Agreement objectives. Finally, at the beginning of 2020, the board approved ERAFP's membership to the Nez Zero Asset Owner Alliance.

 

07.7 CC. For management-level roles that assess and manage climate-related issues, provide further information on the structure and processes involved.

As we said before, the management shall be the operational body responsible for the implementation of the climate-related issues, under the authority and control of the Board of Directors. It shall therefore prepare Board decisions regarding the main features of climate-related issues. It shall report, inform and, where necessary, alert the Board, via its committees, about the implementation of the investment policy, including its climate-related dimensions. By organising quarterly meetings with the SRI Board Committee, the management assists Directors in their work to adjust, enhance and monitor ERAFP's climate-related issues.

Chief Executive Officer and Chief Investment Officer are specifically responsible for climate change since ERAFP strives to integrate into all its analysis and decision-making processes, in as detailed a way possible, climate change-related risks and opportunities. 

The management level could also make propositions to the board for enhancing climate-related issues governance and actions. For instance, in 2019, the management level proposed a disengagement from thermal coal and the integration of an additional climate-related criteria in ERAFP's SRI framework to the board. 

The SRI team, under the CIO's responsibility, works on the following missions: it monitors the well understanding and implementation by its asset managers of the ERAFP's climate strategy, of its voting policy regarding climate-related shareholder's resolutions; it monitors the effective implementation of the mission of climate-related services provider; it dialogues with companies on climate issues and participate to many different collaborative initiatives on climate

07.8 CC. Indicate how your organisation engages external investment managers and/or service providers on the TCFD recommendations and their implementation.


SG 08. RI in performance management, reward and/or personal development

08.1. Indicate if your organisation’s performance management, reward and/or personal development processes have a responsible investment element.

Board members/Board of trustees

08.1b. RI in personal development and/or training plan

08.2. Describe any activities undertaken during the reporting year to develop and maintain Board members’ skills and knowledge in relation to responsible investment.

In 2019, we have proposed two RI training sessions to our board trustees: one on ESG in unlisted investments and one on SRI basics and ERAFP's SRI policy for our new board members partially renewed at the end of the year. A training plan is defined every year for the trustees: it always includes SRI related training sessions (climate change, SRI in different asset classes, etc...)

 

Chief Executive Officer (CEO), Chief Investment Officer (CIO), Chief Operating Officer (COO), Investment Committee

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Portfolio managers

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Dedicated responsible investment staff

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

08.3. Provide any additional information on your organisation’s performance management, reward and/or personal development processes in relation to responsible investment.

For each new ERAFP's employee, the SRI Team organizes a RI training session.

ERAFP's SRI approach is fully integrated into the internal management. Portfolio managers collaborate with the SRI team for the good implementation of the SRI policy. They belong to the same department of "the financial management".

08.4. Describe the level of experience board members/trustees/chief-level staff have with incorporating ESG factors into investment decision-making processes.

          ERAFP's board of directors resolved on November 2005 to adopt an investment policy that takes into account the pursuit of the public interest. That led to the adoption of ERAFP SRI Charter in 2006 which specifies the orientation, tools and resources needed to apply the social responsible investment policy. Hence, the board members oversee the ERAFP SRI policy and its implementation since the beginning of ERAFP. 
ERAFP has been integrating ESG criteria in asset managers' solution process since the first Request for Proposal was launched in 2007. The process can thus be considered as robust. 
Most ERAFP's investment officers have been working at ERAFP for several years and are thus used to overseeing mandates with stringent SRI requirements. 
ERAFP's head of SRI is part of the investment committee.
        

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