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Fonds de réserve pour les retraites - FRR

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

The FRR expands its efforts towards integrating extra-financial data into its management processes by further engaging with its asset managers through regular exchanges on ESG issues.

The FRR promotes good ESG practices whilst at the same time seeking to reap the financial rewards from the materiality of certain SRI criteria, in other words the proven impact of social responsibility criteria on a company’s performance.

Since 2008, the FRR has had in place a system enabling it to monitor and prevent extra-financial risks that may have an impact not only on its investments but also its reputation. Indeed, risks for the FRR may arise from failure by a company in which it invests to observe universally recognised principles, such as those of the United Nations Global Compact and good governance, but also the International Treaties ratified by France.

To avoid legal and regulatory risks, money-laundering risks and reputational risks arising from the FRR’s exposure to various financial centers classified in some cases as "tax havens", the FRR has decided to exclude companies headquartered in countries identified in the French and European non cooperative jurisdictions lists. 

 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

According to the SDA-GEVA method conducive to “TCFD stress-tests”, the Global Equity portfolio and the Global Bond portfolio are on a 2-3 degree trajectory while their benchmarks are on a trajectory greater than 3 degrees. Only the Passive Management Developed Equity portfolio is aligned at 2 Degrees.

The Global Equity and Global Corporate Bonds portfolios are less exposed to the risks associated with stranded assets than their benchmarks. It should be noted that the Emergent portfolio and the actively managed equity portfolio each have a higher exposure to fossil fuels than that of the benchmark.

The Global Equity and Global Bond portfolios are slightly less exposed to physical climatic risks than their benchmarks.

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

Every year.

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

Since 2008, FRR assesses every year its portfolio regarding extra financial risks and environmental issues. 

An audit, based on those assessments is presented to the Supervisory Board every year and disclosed to the public. FRR uses all the metrics proposed by its auditors.

Risk department integrate the ESG issues.

A dedicated ESG committee meet evrery month to deal with ESG issues.

 

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.

specify

          Article 173 - French Energy Transition Law's report and Annual report
        

SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

URL/Attachment

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Consistent with its stated purpose and in light of the size of assets it delegates to external managers, the FRR has set up its management structure and governance in order to ensure :

  • Independence: This spirit is reflected in the law which created the FRR.
  • Transparency: Due to the nature of the Fund’s resources, its strategy,financial statements, the global portflolio is disclosed to the public at regular intervals (every quater). The process of awarding management mandates for the Fund’s assets is conducted in compliance with the French Procurement Code.
  • Close involvement of Unions, Regulators and Government via its Supervisory Board.

 

03.3. Additional information. [Optional]

Please find the codes of conduct and the internal rules & procedures of the FRR at the following adresses :

http://www.fondsdereserve.fr/documents/deontologie.pdf

http://www.fondsdereserve.fr/documents/regles-de-bonne-conduite-professionnelle-et-personnelle-du-FRR.pdf

http://www.fondsdereserve.fr/documents/Reglement_interieur_consolide_aout_2011.pdf


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

Different steps of the process (described in all mandates) on managing incidents are:

- Notification of breach to the asset manager.

- Monitoring of the incident by the middle office under the supervision of the Risk committee.

- Escalation to the Management Board to decide to put the mandate under scrutiny, request for financial compensation or to resiliate it.

- Closing of the incident by the Management Board.


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