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Eurazeo

PRI reporting framework 2020

You are in Strategy and Governance » ESG issues in asset allocation

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 Eurazeo conducts scenario analysis that consider ESG factors, such as human resource and environmental trends in specific business sectors.
Describe Eurazeo conducts scenario analysis to identify future climate-related risks and opportunities. Climate-change is included as a key component of the Group’s overall ESG assessment processes. Climate-related risks included in scenario modelling range from topics such as the development of carbon quotas or allowances to evolutions in energy prices.

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

          Eurazeo integrates CSR at all stages of the investment cycle: during acquisition, support and divestment phases for all investment branches.
        

13.3. Additional information. [OPTIONAL]


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

Climate-change is included as a key component of the Group's overall ESG assessment processes. Climate-related risks included in scenario modelling range from topics such as the development of carbon quotas or allowances to evolutions in energy prices.

Describe

Depending on the materiality of climate-related criteria at investment targets, specific audits are conducted including a climate chapter and tailored scenario modelling. The results are used to define ESG-climate roadmaps and are included in financial modelling.

Describe

Scenario analyses are used to develop ESG-climate roadmaps which are monitored during the holding period.

13.5 CC. Indicate who uses this analysis.

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

Eurazeo evaluates the impacts of climate-related risk, as well as all CSR related topics beyond the investment time-horizon.

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:

          EU ETS
        
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.

other description (1)

          Consumers-social trends
        

other description (2)

          Regulatory trends: Analysis of the potential future development of carbon quotas/allowances (for 2030 or even 2050)
        

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.

Eurazeo's share in low carbon and climate resilient investments does not correspond to a specific framework or taxonomy.

Some examples of low carbon/climate resilient investment include portfolio companies contributing to the transition towards a low carbon economy (e.g. companies in the renewable energy sector, companies providing energy efficiency solutions, etc.).

other description

          Launched the “Climate Initiative 2020” (iC20): The commitment of French private equity players to measure, manage and reduce the greenhouse gas emissions of their portfolios.
        

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

other description

          Measurement of reduced carbon impacts in portfolio companies (see comment below), measurement of costs related to carbon tax.
        

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

Climate related emissions risks are disclosed in the annual report and on Eurazeo’s website.

14.5. Additional information [Optional]

Since 2015, Eurazeo has measured the impact of its social and environmental actions to demonstrate the financial value created by CSR policies. Eurazeo has established a methodology for assessing impacts reduction with a specialized firm. Over the last nine years, CSR programs helped avoid more than €243 million in expenditure, with direct savings totalling over €107 million. The companies reduced their emissions up to 1,068,000 metric tons of CO2 equivalent.


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
          Inform investment decisions and annual monitoring
        
          tons of CO2 equivalent per unit or MWh per unit
        
          Targets are defined by each portfolio company, methodologies may vary
        
Weighted average carbon intensity
          Annual monitoring
        
          tons of CO2 equivalent
        
          The metric was calculated as recommended by the Task Force on Climate-related Financial Disclosure (TCFD). It covers scope 1 and 2 emissions.
        
Carbon footprint (scope 1 and 2)
          Annual monitoring
        
          tons of CO2 equivalent
        
          During the annual CSR reporting, a carbon footprint is measured based on energy and fuel consumption.  The emissions factors used to convert the data to CO2 emissions come from the Intergovernmental Panel on Climate Change (IPCC) 2006 and the  International Energy Agency (IEA) (electricity consumption), in accordance with the methodology of the Greenhouse Gas (GHG) Protocol
        
Portfolio carbon footprint
          Annual monitoring - portfolio mapping
        
          tons of CO2 equivalent
        
          During the annual CSR reporting, a carbon footprint is measured based on energy and fuel consumption.  The emissions factors used to convert the data to CO2 emissions come from the Intergovernmental Panel on Climate Change (IPCC) 2006 and the  International Energy Agency (IEA) (electricity consumption), in accordance with the methodology of the Greenhouse Gas (GHG) Protocol
        
Total carbon emissions
          Annual monitoring - portfolio mapping
        
          tons of CO2 equivalent
        
          Since 2017, Eurazeo measures the full Scope 3 emissions of its portfolio companies.
        
Carbon intensity
          Annual monitoring - portfolio mapping - Inform investment decisions
        
          tons of CO2 equivalent as a proportion of EBITDA 	
One of the 2020 objectives of Eurazeo's CSR strategy is that 100% of portfolio companies reduce their environmental impact. To monitor this reduction, Eurazeo measures the number of portfolio companies to have decreased their carbon emissions as a proportion of EBITDA.
        
          The percentage of portfolio companies having decreased their carbon emissions as a proportion of EBITDA was 38% in 2016, 33% in 2017, 53% in 2018, and 45% in 2019.
        
Exposure to carbon-related assets
          Inform investment decisions
        
          -
        
          The Group mapped its largest portfolios’ exposure to carbon-related assets.
        
Other emissions metrics
          Monitoring
        
          € / tons of CO2 equivalent
        
          The Group measures carbon costs for its carbon-intense investments and the related financial impacts to their activities.
        

14.7 CC. Describe in further detail the key targets.

Target type
Baseline year
Target year
Description
Attachments
          2014
        
          2020
        
          100% of portfolio companies to have decreased their carbon emissions as a proportion of EBITDA. Scope: Eurazeo's CSR strategy - Eurazeo’s CSR strategy covers all
        

          
        
          
        
          
        

          
        
          
        
          
        

          
        
          
        
          
        

          
        
          
        
          
        

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

Climate-related risks and opportunities are systematically included within the Group's responsible investment approach and are evaluated through the overall ESG assessment and monitoring processes (both at acquisition and during the holding period).

  • At acquisition: Using a materiality-assessment approach, for specific sectors and investment targets, climate-related risks are assessed through specific ESG Due Diligence.
  • During the holding period: When material climate-related risks are identified and depending on the level of influence on portfolio companies, the Group provides support for the assessment of the climate-related impacts of its portfolio companies and for the definition of mitigation and reduction strategies.

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.

Please describe

In the framework of the IC International initiative, Eurazeo is committed to measure and reduce the carbon footprint of its portfolios.


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

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

31.5 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

0.9 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • l-PuIse develops innovative technologies based on high power electrical impulses. These procedures have applications in numerous industrial sectors (petroleum, mining, metal industry) and enable new applications and utilization and production cost reductions while improving energy and environmental footprints.
  • IES Synergy designs and manufactures solutions for the fast charging of the fuel cells used by the new generation of electric vehicles.
  • ForseePower is a leading electric battery manufacturer, providing electrochemistry and battery management systems to mobile and stationary energy storage markets.
  • Sunfire manufactures systems allowing to replace fossil fuels in the renewable industrial gas and fuel production.
  • Seatower designs foundations for offshore wind turbines.
  • Meteoswift leverages meteorological and production data to offer a forecasting tool for the future production of wind and solar power plants.
  • Volta installs free charging stations for electric vehicles through outdoor digital advertising.

Asset class invested

0.1 Percentage of AUM (+/-5%) per asset class invested in the area
0.7 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Reden Solar  is a major player in the photovoltaic energy sector in France and internationally. Currently operating in six countries, Reden Solar has built more than 550 sites representing cumulative power of 575 MW, of which about 450 MW operated by the Group today.
  • UNITe - French renewable energy provider (Wind, Hydroelectric and Solar).
  • Sunrun manufactures home solar panels for individuals
  • Zola Electric offers solar power and smart storage solutions.

Asset class invested

0.1 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Segex is a company specializing in urban and landscape construction.

Asset class invested

0.2 Percentage of AUM (+/-5%) per asset class invested in the area
0.1 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Organic Alliance is a producer of 100% organic agriculture.
  • Ynsect produces sustainable and high quality animal feed and fertilizers from insect protein.
  • M2i provides biocontrol solutions for animal and crop health, specialising in pheromones for crop protection and animal health.

 

Asset class invested

19.9 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of investment strategies:

  • Eurazeo Growth supports high-growth companies, particularly in sectors driven by digital transformation and focusing on changes in lifestyle and consumption (mobility, online shopping, collaborative models, etc.). It provides the necessary financial (potentially in several tranches, with an initial investment ticket of around €15 million to €20 million) and human resources for their development.
  • Idinvest Venture - specializing in innovation capital and the digital sector, Idinvest Venture has financed the launch and growth of most French and European startups (Sarenza, Dailymotion, Leetchi, Criteo, Peakon, Wefox, Meero, etc.), thereby becoming an undisputed French and Euro Tech player. Drawing on this expertise, it has developed valuable know-how in different web-based business models and created a top-notch ecosystem.
  • October is an online platform enabling the financing of SMEs by connecting them with private and institutional lenders.

 

Asset class invested

3.2 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Sommet Education is a network of hospitality schools in Switzerland, Spain, China, Jordan, United Kingdom and the U.S. The schools offer degrees to suit a wide range of personalities, career goals and country preferences.
  • Grandir (previously “Les Petits Chaperons Rouges”), has been a key player in the private nursery sector in France for over ten years. A sector pioneer, the group is recognized for the commitment of its teams, its operational excellence, and the excellent quality of its social and pedagogical project.
  • WorldStrides is a premier experiential education provider serving students of all ages. The company has had a strong presence in the United States since its founding in 1967. Today, WorldStrides provides experiential education to more than 400,000 students annually from more than 7,000 schools and universities, travelling to over 100 countries around the world.

Asset class invested

4.7 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Péters Surgical: Péters Surgical designs, produces and distributes single-use medical equipment for operating rooms. In addition to surgical sutures, its main product ranges are implants for parietal reinforcement, surgical glue and hemostatic clips. 3,000 products are marketed and distributed in over 90 countries.
  • In'Tech: In’Tech Medical manufactures orthopedic surgical tools to be used in the highly demanding spinal surgery sector. In’Tech Medical group is a world leader in the following markets: knees, shoulders and hips.
  • Doctolib: Doctolib is Europe’s leading online booking platform and web services provider for healthcare professionals. Doctolib provides professionals and healthcare facilities with appointment management software, as well as services to manage their consultations, communicate with patients and work with other healthcare professionals.
  • C2S: C2S Group is the eighth largest private clinic operator in France and a regional leader in Auvergne, Rhône-Alpes and Burgundy Franche-Comté. It operates 14 clinics, primarily specializing in short and medium-length stays in general medicine, surgery and follow-up care. It also owns the buildings for seven of its clinics. The group has 700 medical practitioners, nearly 2,500 employees and around 300,000 patients.
  • DORC: DORC operates in the medical technology sector and is a leading specialist of vitreoretinal surgery.

Asset class invested

0.1 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Organica Technologies is a supplier of products and services enabling customers to build space and energy efficient biological wastewater treatment plants.
          Circular economy
        

Asset class invested

1.6 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Examples of portfolio companies:

  • Europcar is also part of the service economy with its car rental business. To reduce the environmental impacts associated with the use of its fleet, Europcar offers consumers vehicles with a reduced environmental impact thanks to efficient maintenance programs, the low average age of its fleet and the proportion of its vehicles fuelled by alternative energy sources, including hybrid cars and electric vehicles.
  • Backmarket is an online platform selling refurbished products, mainly phones, laptops and tablets, but also tvs, speakers, cameras and household appliances.
  • Vestiaire Collective is an online platform of second-hand luxury items connecting private buyers and sellers. Every piece sold on the platform is checked and certified by experts, facilitating the online sale of second-hand luxury products. 

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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