We have retained the services of Groupe Investissement Responsable (GIR) to provide an ESG rating for corporate issuers on the basis of four scores: environmental, social, governance and overall ESG. The weightings and justifications are detailed. The scores range from 0 to 10, with 10 being the highest score. The weighting of environmental, social and governance factors is defined by the issuer's sector of activity. For example, the environmental weighting, at 45%, is greater in the energy sector, whereas the social weighting, at 50%, is greater in the health care sector. We compare ratings of our portfolios with their benchmarks.
Our policy includes the following exclusions:
Coal: Companies that derive more than 25% of their income from coal-fired power plants. In addition, the Company must have demonstrated that in recent years it has reduced its Greenhouse Gas (GHG) emissions and plans to continue in this direction.
Tobacco: Businesses that derive more than 10% of their revenues from the manufacture of tobacco products.
Weapons: Any company involved in the manufacture and sale of anti-personnel mines, cluster munitions and biological or chemical weapons that contravenes the rules of International Humanitarian Law (IHL). Our ESG Committee reviews the prohibited and watch-list securities.