Assessing ESG risks, including climate-related risks, is a crucial process in the overall risk management of the company as regard investment selection.
Climate-related risks and opportunities are assessed by Trecento AM in the Environmental pillar of the ESG analysis that we perform on each issuer, depending on its sector & sub-sectors that influence the nomber of specific environmental risks that we analyse. The incorporation of the climate risk is therefore ubiquitous in the SRI strategy of Trecento AM since we :
- internally analyse issuers' strategy as regards environment and climate as well as the risks and opportunities of their activites on the environment ;
- also use external environmental analysis, including the RobecoSAM score for which the environmental criteria represents roughly 30% of the score.
The climate-related risk is also incorporated in our normative exclusion policy as we exclude issuers that have demonstrated strong violations of the principles set at the Rio Earth Summit. We also list all environmental controversies that arose for an issuer, in particular as regard climate change, and these controversies result in a penalty affecting the maximum weighting of an issuer in our investment funds.
In conclusion, the climate-related risks and opportunities are factored into the investments strategies at every step of our extra-financial analysis and fund management.