Since 2009, METROPOLE Gestion has been keen to establish a methodological basis independent of the major ESG rating agencies by establishing an academic collaboration with the University of Clermont Auvergne in order to produce an in-house company rating system.
The framework is the architecture of the screening system and it is laid out across two axes which define four orthogonal pillars (Internal – External / Human Capital – Capital and Public goods) which are then broken down into items comprehensively reviewed:
- Environment: measures the impact of the company's activities on the ecosystem
- Social: measures the impact of the company's activities on its human resources
- Governance: measures the quality of relations between Management, shareholders and the Board of Directors
- Stakeholders: measures the quality of relations with stakeholders
Our ESG approach is a 360° analytical approach to the company, taking into account three aspects: extra-financial analysis, financial analysis, balance sheet analysis.
The screening combines quantitative and qualitative analysis.
As for the quantitative analysis, the screening is based on our extra-financial database which provides stable data over time, combining official corporate data (annual reports, sustainable development reports) and details of any controversies sourced from press agencies. Using this data, we build 150 indicators to measure each element of our standards, favoring outcomes over drivers deployed (75% - 25%).
- Each pillar is equally weighted.
- Best in Class rating: each company is rated in relation to its sector to obtain a Best in Class rating.
- Best Effort rating (1 to 5 stars): this takes into account the change in extra-financial rating over the past four years, with additional weighting given to the last year.
- Ratings are reviewed annually.
The quantitative analysis is supplemented by a qualitative analysis:
- Taking into account any ongoing controversies:
- all controversies regarding stocks held in the portfolio are reported and monitored on a weekly basis.
- in the case of new companies under consideration, in addition to the quantitative rating, controversies are analysed over the last three years.
- Analysis of sector-specific risks.
- Dialogue with companies through interviews with CSR managers and senior management (at least once a year for companies in the portfolio), designed to explore in depth the risks identified, to detect any risks not identified during the rating process to influence company strategy.
Processes and screenings methods have not been changed since 2009. If any change in the future, it would be highlighted on our website through our SRI documentation.
Policies and procedures are updated when changes are effective and the documentation is made available to the clients on our website.