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PRI reporting framework 2020

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities » Implementation processes

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities; and the breakdown of your actively managed listed equities by strategy or combination of strategies.

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
99.4 %
Percentage of active listed equity to which the strategy is applied — you may estimate +/- 5%
0.6 %
Total actively managed listed equities 195.4%

01.2. Describe your organisation’s approach to ESG incorporation and the reasons for choosing the particular strategy/strategies.

The responsible investment approach of METROPOLE Gestion emanates from its founding values.

Implementing a Value management style means investing in companies that have been discounted vis-a-vis their industrial value and therefore tend to be neglected by the financial markets. It necessarily calls for particular vigilance regarding the risks inherent to such companies ‒ not only the financial risks but also governance, social and environmental risks. In 2008, therefore, METROPOLE Gestion launched a Value and SRI style eurozone equities fund and subsequently established a partnership with the Clermont Auvergne University in order to apply academic rigour to the analysis of the ESG risks inherent to the companies, at a time when company reports on such matters were in their infancy and the associated responsibilities were poorly defined. In collaboration with the Clermont Auvergne University, METROPOLE Gestion therefore established a quantitative company rating methodology exploiting ESG criteria, covering some 150 fundamental indicators broken down into 4 analytical themes, namely Environment, Social, Governance and Stakeholders.

In addition to the risks companies face in these areas, we believed it was essential to encourage them to improve by adopting a responsible and sustainable approach to growth. We therefore apply a Best-in-class and Best effort methodology, engage with the companies from the very outset, integrate these criteria in the exercise of our voting rights and maintain direct dialogue with them.

In order to extend our approach and encourage academic research into such issues, since 2012 METROPOLE Gestion has funded a research chair at the Clermont Auvergne University Foundation to enable young researchers to work on ESG issues.

Since its founding, METROPOLE Gestion has always believed that exercising voting rights on behalf of our clients forms an integral part of establishing a dialogue with the companies, encouraging them to develop their ESG practices. Over the years we have also observed companies increasing propensity to give full consideration to shareholders’ votes and to establish dialogue with their investors.

The analysis of resolutions and the implementation of votes are monitored by the METROPOLE Gestion fund management team with the support of the analytics firm ISS.

In addition to exercising voting rights, the fund management team of METROPOLE Gestion has always maintained dialogue with the companies in which it invests on behalf of its clients, by meeting not only the companies’ CSR managers but also their CEOs and CFOs in order to assess their commitment to the sustainable development of their company. Over and above the process of direct dialogue with the companies, more recently METROPOLE Gestion commenced an annual process of thematic dialogue covering specific topics that are addressed by each company that is met. Lastly, through the auspices of the CDP (Carbone Disclosure Project), METROPOLE Gestion engages with companies within the framework of collective engagement designed to exert greater influence over their activities, notably in terms of their climate action.

METROPOLE Gestion has always applied a Best-in-class and Best effort approach to encourage companies to evolve towards sustainable development. In this regard, METROPOLE Gestion does not favour systematic exclusion preventing any form of dialogue with excluded companies, given the necessity of transition in certain sectors where alternatives are still in their infancy. We have nevertheless adopted a targeted exclusion policy fully in keeping with our policy of ESG engagement, focussing on all the Sustainable Development Goals of the United Nations, notably in terms of respect for human dignity, the environment and the objectives of the Paris Climate Agreement.

It is designed to exclude controversial weapons, the production and consumption of coal, tobacco producers and pornography.

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Within the context of its fund management activities, METROPOLE Gestion has adopted a single global and integrated process: Responsible Value Investment.

Our initial investment universe is composed of European companies with over 100 million euros of market capitalisation, with the exception of those subject to the exclusions specified in our policy. Our eligible universe therefore constitutes the starting point for portfolio construction.

Financial analysis and the selection of discounted securities vis-à-vis their industrial value constitutes the second filter that once again narrows the universe.

The third filter consists of  favouring the discounted companies with the best ESG ratings in their business sector and the Best efforts rating in terms of transition to better ESG practices. This approach encourages the companies to accelerate their transformation toward sustainable growth and seize the opportunities created by such transformation.

The catalysts likely to reduce the valuation discount and ESG controversies represent the final filter applied to the selection of securities that may constitute the portfolio.

Lastly, the fund management team applies a strict disposal policy if the valuation objectives are reached, if the quality of the company deteriorates in terms of ESG or in the event of a major controversy.


LEI 02. Type of ESG information used in investment decision

02.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

02.2. Indicate whether you incentivise brokers to provide ESG research.

02.3. Describe how you incentivise brokers.

METROPOLE Gestion is paying for research to brokers. This includes not only financial research but also ESG and climate change analysis research.

Every year, the list of research brokers is reviewed in order to assess the quality of the research delivered by them. 

02.4. Additional information. [Optional]

LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate whether your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]

(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by


METROPOLE Gestion excludes any companies directly or indirectly linked to the financing of controversial weapons, as provided for by international conventions. Are also excluded mining companies that generate more than 30% of their revenue through coal production, energy-producing companies more than 30% of whose production comes from coal, companies linked to tobacco production and companies linked to pornography.

This exclusion policy applies to all our funds.

Screened by


Our SRI approach is a multi-sector approach, Best-in-Class and Best Effort approach. We encourage companies to improve in the extra-financial areas: environment, social, governance and stakeholders.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

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.

LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure ESG screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.5. Additional information. [Optional]

LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached.

06.2. If breaches of fund screening criteria are identified, describe the process followed to correct those breaches.

Rules and criteria are input into the Portfolio Management System, which checks compliance with regulatory and statutory ratios and approves investment decisions in real time. The ratios are monitored at all times both by the investment team and by the control functions (compliance and risk management and  officers). The list of exclusions on ESG criteria are non over-ride rules.

06.3. Additional information. [Optional]

(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the proportion of actively managed listed equity portfolios where E, S and G factors are systematically researched as part of your investment analysis.

ESG issues

Proportion impacted by analysis




Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on robust analysis.

09.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your integration strategy.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information. [Optional]

LEI 10. Aspects of analysis ESG information is integrated into

New selection options have been added to this indicator. Please review your prefilled responses carefully.

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

          We follow a 360° analytical approach to the company. Fundamental analysis is completed with ESG quantitative and qualitative analyses.

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis.

10.3. Describe how you integrate ESG information into portfolio weighting.

In our SRI fund, we maintain an average ESG rating for the portfolio above that of Eurozone listed companies with a market capitalisation in excess of €5 billion (some 280 companies), after deduction of 20% of the lowest ratings, which is key for determining portfolio weighting.

When ratings are updated, weightings may be reviewed at the same time.

In addition to that, when reviewing controversies, portfolio weightings may be adjusted.

10.4. Describe the methods you have used to adjust the income forecast/valuation tool.

For each controversy that arise for any company we are invested in, we implement the financial consequence of it in our valuations metrics.

We also adjust in our valuation metrics the increase of capital expenditure that should be done in the next years in order to valuate the costs induced by the transition effect.

10.6. Additional information. [OPTIONAL]