1/ Screening / Exclusion
For sovereign issuers :
These exclusions relate to:
- The country' listed on the French list of non-cooperative states and territories or the GAFI list (jurisdictions that have strategic deficiencies in the standards for combating money laundering and terrorist financing).
For corporate issuers :
- Coal Policy : LYXOR has decided to divest of the most exposed actors by excluding companies whose turnover from activities related to the extraction of thermal coal is greater than 10% and companies that belong to the energy sector, of which more than 30% of electricity generation (energy mix) comes from coal.
These criteria are applied by the entities of the LYXOR's Group according to the notion of 'best efforts' and taking into account legal and commercial constraints.
-the Ottawa Convention, which prohibits the use, stockpiling, production, transfer and destruction of anti-personnel mines; Lyxor uses the services of ISS Ethix to identify companies that are considered in breach of its Defence Policy. This list is reviewed on quarterly basis.
For unlisted companies :
LYXOR applies exclusions in application of its SRI policy which presents the values and practices established by our organization to integrate Environmental, Social and Governance ("ESG") issues into our various solutions. investment.
These exclusions relate to:
-Respect of the ten principles of human rights, labor standards, the environment and the fight against corruption contained in the United Nations Global Compact;
-Specific sectors like Defense, Adult Entertainment, Human cloning, Tobacco, Thermal Coal (company with 20% of revenue in extraction or electricity)
2/ Integration of ESG criteria
For sovereign issuers , corporate financial and corporate ex financial issuers
LYXOR embraces ESG criteria across sovereign debt efforts.
LYXOR uses MSCI ESG data and a country's overall ESG score to assess its long-term economic sustainability. The calculation involves looking at the exposure to environmental, social and governance risks.
The new strategy involves calculating the total ESG score of the sovereign bonds available to invest in. The formula gives a weighting of 50% to governance, which leaves the societal and environmental factors with 25% each. The latest strategy involves overweighting sovereign bonds with good ESG scores. This does not mean they will disregard other sovereign bonds, instead a new focus will be aimed towards sustainable asset management.