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CNP Assurances

PRI reporting framework 2020

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ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe CNP Assurances undertakes scenario analysis for physical and transition risk analysis for real estate, forestry, listed equities and fixed income.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

Examples

- Real estate: physical risk

CNP Assurances started in 2017 a detailed analysis regarding the physical risk of its real estate in order to benefit from an exhaustive vision of the climate risk it might be exposed to in various scenarios (GIEC RCP4.5 and RCP 8.5) by 2050.

- ESG exclusion for coal industry or specific countries are example of ESG issues in strategic asset allocation.


SG 13 CC.

13.4 CC. Describe how your organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, its results, and any future plans.

Describe

The analysis of the physical risk was carried out on its property portfolio based on two IPCC scenarios. It allowed to have a good picture at the end of 2017 of the assets presenting high exposure to the various climatic hazards studied. For the main risks , CNP's exposure is low or zero: only buildings located around the Mediterranean and in cities that are prone to urban heat islands are at higher risk from the risk of heat waves and the rise in temperature.

 

 

Describe

  • With regard to forests, CNP Assurances' investment policy obtained a good geographical diversification in France. In addition, certain regions with significant natural risks have been avoided (eg in the south-east of France, with regard to fire risks). The geographical diversification of forest assets also reduces the risk of extreme events such as storms or drought. In order to improve the geographical diversification, a forest investment program in Scotland has recently been put in place. •
    Identification of the most material risk relating to coal, which led CNP Assurance to dispose of all securities held in companies with more than 20% of sales related to thermal coal, to no longer invest in companies whose turnover related to thermal coal represents more than 10% and to no longer invest in companies involved in the development of new coal power plants or coal mines;

    Appropriation of physical risks studies : Communication and sharing of results of the scenario on physical risks in listed equity and fixed income with the investment department, the risk department and real estate and forest asset managers

 

Describe


CNP Assurances will develop its dialogue activity with companies in the coal sector in 2020, following the scenario compatible with global warming limited to 1.5 ° C, as developed by Climate Analytics: coal activity will have to stop by 2030 in the countries from the European Union and the OECD, and by 2040, in the rest of the world.


Shareholder engagement with companies on measuring and reducing their exposure to physical and transition risk, based on publics studies (IPCC, IEA...)
 

13.5 CC. Indicate who uses this analysis.

specify

          The CSR department, in charge of exercising voting rights at general meetings and shareholder engagement.
        

13.6 CC. Indicate whether your organisation has evaluated the potential impact of climate-related risks, beyond the investment time horizon, on its investment strategy.

Describe

Scenarios of physical risk for real estate, equity and bond used projections until 2050. The financial impact of transition and physical risk study (VaR) was simulated until 2100.

13.7 CC. Indicate whether a range of climate scenarios is used.

13.8 CC. Indicate the climate scenarios your organisation uses.

Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other

Other (1) please specify:

          AIM
        
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

CNP Assurances has decided to intensify its action by setting new ambitions in December 2017: it undertakes to devote, by 2021, € 5 billion to new green investments in favour of energy and environmental transition (renewable energy, energy efficiency, sustainable mobility, green infrastructure, green bonds, energy efficient buildings and forests).

 

At the end of 2019, the target was exceeded by 39% with a total of € 7 billion in new green investments between 2017 and 2019.

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

other description

          Qualitative indicator
Dialogue with the most carbon-intensive companies.
Work on avoided emissions.
Green investment
        

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.


Climate issues are presented once a year to the Board of Directors and the Audit and Risk Committee during the review of the Group's CSR approach and the presentation of the Extra Financial Performance Declaration. The commitments made in the fight against global warming are presented there specifically, allowing CNP Assurances' governance to monitor the actions implemented and the level of achievement of these commitments. These commitments are also presented to shareholders at the general meeting of CNP Assurances.
In addition, the work of the Climate Risk Committee was presented to the Executive Committee and the Audit and Risk Committee in November 2019.
 

14.5. Additional information [Optional]


SG 14 CC.

14.6 CC. Provide further details on the key metric(s) used to assess climate-related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Climate-related targets
          Green investments
        
          euro
        
          New Investment and stock.
        
Carbon footprint (scope 1 and 2)
          to contribute to the energy and environmental transition
        
          tonnes of carbon dioxide equivalent per thousand euros invested
        
          Emissions under Scope 1 (direct GHG emissions) and Scope 2 (energy-related indirect emissions) are taken into account to calculate the carbon footprint. CNP Assurances estimates GHG emissions of portfolio companies without eliminating overlap, based on the portfolio’s gross asset value.
        
Portfolio carbon footprint
          Compare CNP Assurances situation to 1,5°c scénario
        
          the "green" part in the energy
        
          the comparison between the situation of CNP Assurances and the IEA.
        
Exposure to carbon-related assets
          to reduce stranded asset, Excluding the acquisition of new financial assets: companies mining coal or producing coal-based energy when more than 10% of their revenue is derived from thermal coal and No  longer invest in the companies involved in the development of new coal power plants. Exclusion from the portfolio of financial assets: companies mining coal or producing coal-based energy when more than 20% of their revenue is derived from thermal coal.
        
          amount of asset invested
        
          Trucost collects and analyses data obtained from companies, securing them by cross-referencing them with data collected by another specialised service provider and with information obtained during discussions with issuers.
        
Other emissions metrics
          renovation to reduce energy consumption
        
          CO2 equivalent emissions avoided by the renovation of buildings
        
          Renovation work serves to avoid CO2 emissions. CNP Assurances has monitored this indicator since 2012.
        

14.7 CC. Describe in further detail the key targets.

Target type
Baseline year
Target year
Description
Attachments
          2014
        
          2021
        
          47% reduction between 2014 and 2021
in the carbon footprint of the portfolio of directly held
listed equities
        

          2006
        
          2021
        
          40% reduction between 2006 and 2021(1)
in greenhouse gas emissions linked to the energy consumption
by property assets
        

          2018
        
          2021
        
          €5 billion between 2018 and 2021
in additional green investment flows in favour of the energy
and environmental transition
        

          
        
          
        
          
        

          
        
          
        
          
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risk management processes used for identifying, assessing and managing climate-related risks.

Please describe

CNP Assurances has implemented a risk management system.

The strategic priorities in terms of risk management are decided by the Board of Directors – particularly the Group’s risk appetite and how this breaks down on an annual basis – based on input from the Audit and Risk Committee. The risk management system is part of the comprehensive strategic management process led by the Chief Executive Officer.

The aim of identifying and assessing recurring risks is to provide governance bodies with the information needed to manage the risks inherent to each business activity and to define an overarching risk management strategy for the Group as a whole.

The Board of Directors has accordingly approved the inclusion of ESG criteria in asset management as part of its annual review of the investment strategy. The efficiency of the implementation of the approach is demonstrated by the SRI commitment of the two main delegated asset management companies, Ostrum AM and La Banque Postale AM, which manage the directly held assets.

This approach, which has been progressively rolled out since 2006 and covered 82% of the portfolio as at end-2019, effectively takes exposure to environmental, social and governance risks into account:
The climate risk committee was set up at the end of 2018. Its mission is to monitor climate risks, identify actions to be taken, monitor their implementation and their results.
 

14.9 CC. Indicate whether your organisation, and/or external investment manager or service providers acting on your behalf, undertake active ownership activities to encourage TCFD adoption.


SG 15. Allocation of assets to environmental and social themed areas (Private)


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