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CNP Assurances

PRI reporting framework 2020

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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.

Principles: Secure the commitments made to policyholders and above all offer a steady, optimised performance year after year;

Be a long-term investor and responsible shareholder;

Contribute to economic development by providing the necessary stability allowing public and private players in all business sectors to pursue their growth plans

 

Taking ESG criteria into account in the assessment of an investment contributes to value creation and optimises the yield-to-risk ratio over time, CNP Assurances has gradually deployed a responsible investor strategy covering all of the asset classes. This management approach reflects the Group’s commitments to the Global Compact.

CNP Assurances lays down and shares the four principles of the Global Compact that guide the integration of these criteria into the management of its financial assets in accordance with methods tailored to each asset class.

In addition to complying with national regulations, CNP Assurances adheres to international agreements signed by France. For instance, in accordance with the Ottawa and Oslo conventions, CNP Assurances excludes manufacturers of anti-personnel mines or cluster munitions from its portfolios.

It also excludes speculation on agricultural commodities from its investments.

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.

1/ Physical risks and opportunities

CNP Assurances has mainly focused on analysing the physical risk exposure of its property and woodland assets, directly-held equities and corporate and sovereign bond portfolio.

Exposure to physical risk through our forests is relatively limited. The analysis of the physical risk was carried out on our property portfolio based on two IPCC scenarios. For the most part, CNP's exposure is low or zero. In 2018, CNP Assurances began a study of the physical risk of its equity and bond portfolios in order to deepen the vision of the physical risk to which it could be exposed. In 2019, CNP measured the financial impact (VaR) of physical risk on its equity and corporate bond portfolio.
 

Measures taken to reduce physical risks: With regard to real estate assets, based on the analysis of physical risk carried out, CNP Assurances will reduce its exposure by asking its asset managers to propose adaptation solutions. With regard to forests, CNP Assurances' investment policy has allowed for a good geographic diversification of the portfolio in France. For equity and Bond, CNP makes shareholder engagement with companies on measuring and reducing their exposure to physical risk.

2/ Transition risks and opportunities

 The value of assets is potentially exposed to regulatory, technological, market and reputational risk. Measures taken to reduce risks: CNP Assurances has managed these transition risks for many years through several approaches:

- Identification of the most material risk in 2015 concerning thermal coal. CNP Assurances thermal coal policy was reinforced in 2018 and 2019 by lowering the turnover threshold to 10% and by committing to no longer investing in the companies involved in the development of new coal power plants or new coal mines;

-Calculation of the carbon footprint since 2016 on the shares and bonds of companies held directly to highlight the companies most exposed to transition risks (with the target to reduce it by 47% by 2021). CNP Assurances has set up dialogues with key stakeholders. Since 2017, CNP Assurances has stepped up the alignment of its equity portfolio with model portfolios composed of European securities promoting or accompanying the energy transition.

- CNP Assurances also monitors GHG emissions avoided by building renovation works undertaken since 2012, and has a target of 40% decrease of the property portfolio’s carbon footprint by 2021.

-The completion in 2018 and 2019 of a 2°C alignment study on the equity and corporate bond portfolios by 2Dii. The study is based on a Sustainable Developpement Scenario (SDS) and provides a scenario analysis on 5 sectors: fossil fuels, automotive, cement & steel, aviation & marine transportation, electricity generation, according to different energy sources. In 2019, CNP measured the financial impact (VaR) of transition risk on its equity and corporate bond portfolio.

Green investments in favor of the energy and environmental transition are an opportunity. CNP had a target to invest €5billion between 2018 and 2021, which has been reached at end 2019.

 

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.

The analysis of the physical risk was carried out on its property portfolio based on two IPCC scenarios in 2050. The study of the physical risk of the equity and bond portfolios was also carried out with a 2050 horizon. The financial impact of the physical and transition risk (VaR) was assessed with a 2100 horizon.
 

Transition risk exposure is expected at short-term (coal sector) and middle term (energy, real estate, agriculture). Transition opportunities are longer term.

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


 Monitoring climate issues
 The Group's climate strategy is subject to the approval of the Chief Executive Officer and then the Board of Directors.
 Climate issues are presented once a year to the Board of Directors and the Audit and Risk Committee. The commitments made in the fight against global warming are presented there specifically, allowing CNP Assurances' governance to monitor the implemented actions 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 (an internal committee set-up by CNP to identify and manage material climate-related risks and opportunities) was presented to the Executive Committee and to the Audit and Risk Committee in November 2019. These two bodies benefited from training on climate risk.

 Assessing and managing climate risks

 The CSR department is in charge of steering climate issues at Group level. It relies on the Climate Risk Committee that the CNP Assurances set up in early 2019. This committee meets quarterly to monitor the actions put in place to integrate the climate risk dimension into all components of the business (investment, insurance, internal operations).
 In addition to the investment department, the group's general secretariat and the CSR department, the climate risk committee benefits from the expertise of the group risk department and the group actuarial department. The sharing of information during this quarterly committee promotes interaction and exchanges between the various operational functions:
 • the investment department is responsible for the investment portfolio
 • the group acturial department is responsible for evaluating technical provisions and supervising underwriting activities
 • the group risk department is responsible for cross-functional risk measurement and management. It assesses the impact on solvency and steers work on climate stress tests.
 The roadmap of the Climate Risk Committee breaks down the actions on the various activities of the company: risk mapping and measurement, strategy to reduce risks. The progress of the roadmap is monitored during the committee and regularly supplemented with new actions.

 In addition, the investment department has implemented a quarterly green finance reporting to measure and disseminate to internal stakeholders the evolution of KPI related to climate issues. Within the investment department, the implementation of the responsible investment strategy relies on the head of the risk management department and a network of appointed correspondents for each asset class. They deploy this strategy with the various asset management companies.

 The internal SRI committee monitors the operational implementation of the responsible investment strategy by asset class.
 The group risk department controls the correct application of the exclusion rules in the asset portfolios.
 The CSR department is in charge of exercising voting rights at general meetings and shareholder engagement. The voting guidelines proposed by the CSR department are validated by the CEO or the CIO.

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

specify

          Sustainable Investment 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.

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.

Committees bring together different directions to define the principles of investment rules (SRI committee, Investment Committee). A department is dedicated to control the application of investment rules. The investment strategy is presented to the Board of directors.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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