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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 » Objectives and strategies

Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

In 2019, among our main SRI objectives were:

- to achieve an analysis on impacts of a coal exclusion policy's adoption.

- to deepen our analysis in terms of climate risks and opportunities including the publication of portfolios' temperatures and exposition to fossil fuel 

- to renew several SRI markets (votes and climate-related providers).

- a better integration of SRI data from our ESG provider and our asset managers

 


SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          develop and maintain board members' skills and knowledge in relation to responsible investment
        

Progress achieved

In 2019, two training sessions on ESG for the board took place. The first focused on the topic of ESG in the unlisted investments; the second reminded the SRI fundamentals and ERAFP's SRI policy for the board new members (the board has been partially renewed at the end of the year). 

Key performance indicator

          develop and maintain board members' skills and knowledge in relation to responsible investment
        

Progress achieved

Each quarter, an update on ERAFP's engagement activities is made by the SRI team. At this occasion, the board members ask questions and discuss with the SRI team.

Key performance indicator

          a better understanding of our SRI policy's impacts and engagements.
        

Progress achieved

ERAFP tries to involve all its employees on SRI issues. In 2019, the ERAFP SRI's strategy for short and medium terms has been presented to all employees. Moreover, a morning has been organized with all employees on the topic of "ERAFP and the energy transition"

Key performance indicator

          monitor and engage with issuers on their ESG weaknesses
        

Progress achieved

In 2016, the revision of the SRI Charter has  endorsed the fact that ERAFP's dynamic best in class approach continues to prevail and gain in efficiency by being supplemented by in-depth monitoring of controversial issues and more resolute shareholder engagement.

ERAFP's asset managers have to monitor controversies related to international environmental, social and governance standards and engage with companies that breach those standards. Asset managers report on controversies monitoring and shareholder engagement on a bi-annual basis. ERAFP encourages its asset managers to engage with issuers for a better governance of ESG issues.

Moreover, ERAFP engages directly with issuers mainly through collaborative initiatives on various ESG topics. The good governance, mainly in Asia, was one of its priority themes of engagement in 2019.

Key performance indicator

          Identify material ESG issues of each asset; better integration of environmental issues
        

Progress achieved

In 2016, we reviewed our ESG framework in order to better appreciate the main ESG risks and opportunities for each sector and issuer. ERAFP's SRI rating agency has affected specific weights to ESG criteria according to their materiality for each sector. In 2019, we added two new criteria in ERAFP's ESG framework to better evaluate issuers' strategy of compliance with the Paris Agreement goals and exclude issuers whose revenue is related to thermal coal for more than 10% (unless the issuer demonstrates that it plans to reduce its thermal coal exposure in order to comply with Paris Agreements’ goals or the investment is Green Bonds).

          Improved monitoring of issuers' ESG performance
        

Key performance indicator

          Issuers' ESG performance
        

Progress achieved

In 2019, ERAFP has pursued the implementation of an internal tool to better monitor ESG data from its asset managers and services providers aiming at improving its guidance of portfolios' ESG performance 

Financial performance of investments

Key performance indicator

          relation between financial performance and ESG
        

Progress achieved

In 2019, ERAFP has led an investigation towards its asset managers in order to better understand the relation between SRI and financial performances based on their implementation of ERAFP's SRI framework. We note that ERAFP's portfolios selected on the basis of SRI framework globally better perform than their benchmark. Especially when there is a crisis, issuers with ESG best practices tend to better perform than others.

ESG characteristics of investments

Key performance indicator

          ESG ratings
        

Progress achieved

ERAFP looks for ESG best issuers and/or best ESG potential in each category. 

ERAFP takes into account the specific nature of some asset classes as the real estate asset class by incorporating a dynamic approach consistent with the investments’ lifespan. In practical terms, real estate assets with strong improvement potential can be selected for ERAFP's portfolio. In 2019, the ESG rating of Real Estate portfolio has improved compared to 2018 and should continue to improve, at equal scope, as many assets have a potential SRI rating higher than their current SRI ratings. Globally, ERAFP tries to improve its portfolios ESG performance year after year.

Other description (1)

          Improve investments' social and environmental positive impacts
        

Key performance indicator

          ESG impacts' indicators
        

Progress achieved

In the updated SRI charter, ERAFP has endorsed the fact that 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. 

As a consequence, ERAFP is developing several ESG impacts indicators with its asset managers. 

As regard its climate-related impacts, ERAFP is working on indicators trying to evaluate its risks (carbon footprint, fossil fuels activities' exposure, stranded assets...). In 2019, it added for instance the evaluation of portfolio's temperatures and exposition to fossil fuels. Finally, ERAFP continues to work on forward-looking measures and deepest analysis of its climate risks. 

In 2019, ERAFP also signed the french public investors charter promoting SDG's which requests to monitor ERAFP's investments impacts on SDG's.

Other activities

Key performance indicator

          Reinforce ERAFP's current participations in RI initiatives and join initiatives
        

Progress achieved

In 2019, ERAFP continued to participate in various RI initiatives where it was already engaged last year. In particular, ERAFP follows its engagement through IIGCC and the Climate Action 100+ initiative focusing on power and auto sectors. 

At the end of year, ERAFP also signed the French public investors charter in support of SDG's and the tobacco free finance pledge

Key performance indicator

          number of issuers engaged-Investor Decarbonization Initiative
        

Progress achieved

we try to follow results of our engagements. For instance, as participant to Investor Decarbonization Initiative, we follow issuers' participation to RE100, EP 100, EV 100 and SBTi. it's encouraging to see participation growing especially through SBTi.

Key performance indicator

          illustration of ERAFP SRI policy's implementation
        

Progress achieved

For instance, in our 2018 annual report, we focused on two case studies: Ecovadis and OpenClassrooms in which ERAFP invests.

In our 2019, we detailed our engagement through Climate Action 100+ initiative

06.2. Additional information.


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