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Trecento

PRI reporting framework 2020

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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 Our ESG analysis models need to be updated on a regular basis, to incorporate new and modified criteria that further support the robustness and relevance of our extra-financial analysis. Our analysts have the key role here to detect new ESG criteria and make suggestions to the ESG committee.
Describe The Environmental analysis conducted on each issuer includes the assessment of climate-related risks and opportunities. The criteria, model and indicators used need to be updated on a regular basis and analysts also have the key role here to detect new climate criteria and make suggestions to the ESG committee.

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

          We have implemented a sectoral exclusion policy and we apply a best-in-class policy for the non excluded sectors.
        

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

For the initial assessment, we are worked based on the assumptions of the Paris agreements, which is often the scenario also used by issuers to assess and implement their climate-related policy and actions. We then identify and select the specific climate-related risks and opportunities of each sector & sub-sector amongst the 18 criteria that we focus on for the Environmental analysis on each issuer.

The scenario, criteria and indicators chosen during the initial assessment need to be updated on a regular basis. Our analysts also the key role here to detect new climate criteria and make suggestions to the ESG committee.

Describe

Our investment process always includes issuers’ ESG analysis. The Environmental part of this ESG analysis includes the assessment of their environmental and climate policy as well as the climate-related risks and opportunities of their activities.

The principal criteria assessed is obviously the existence of an environmental policy as regard global warming and the existence of programs or initiatives to help reduce global emissions of the Greenhouse Gases (GHG) that cause climate change through its ongoing operations and/or the use of its products and services.

More broadly, depending on the characteristics of each sector/sub-sector, the following other environmental criteria (often linked to climate risks) are also analysed and assessed:

- Characteristics of the electricity consumed and percentage coming from renewable energy sources (e.g. on-site production, grid renewable electricity, etc.).
- Existence of an energy efficiency policy and associated action plan (like ISO 50001), of environmental certifications (such as ENERGY STAR) and implementations of indicators to monitor the energy consumption.
- Product development according to the concept of eco-design (respect of the ecosystem) or circular economy approach (recyclability of products).
- Implementation of measures in order to manage water use efficiently in areas of high water stress and optimize water consumption (installation of water meters, rain harvesting, close-loop systems, alternative sources for process water, etc.). Existence of performance indicators with regard to water consumption.
- Equipment of production plants with wastewater treatment plants or systems.
- Equipment of production plants with air filtration systems
- Monitoring by the company of performance indicators with regard to level of air emissions.

Describe

As we engage with issuers on ESG issues all year round, discussing climate-related risks is a key focus, to better understand issuers’ policy and actions and promote new actions for the issuers to seize opportunities to further reduce their emissions and better improve their environmental/climate policies.

specify

          Sectoral exclusion policy of the most controversial sectors.
        

Describe

We have excluded some sectors that massively contribute to global warming like Coal, Oil Sands and Oil Shales.

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

As a long-term investor, evaluating and incorporating climate-related risks is critical to support the Paris Agreements and its long-term temperature goal to keep the increase in global average temperature to well below 2 °C above pre-industrial levels; and to pursue efforts to limit the increase to 1.5 °C. We reckon that these climate-related risks and opportunities can materialise at any time, depending on their nature and type. We therefore assess them on the short, medium and long term.

It means that we are evaluating the potential impact of climate-related risks on our investment strategy beyond the usual investment time horizon of our funds.

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
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.

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

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

14.5. Additional information [Optional]

Trecento AM manages two thematic funds that are Trecento Santé (Trecento Healthcare) and Trecento Robotique (Trecento Robotics). 

These two funds have the objective to invest in companies that find solutions by innovating and developping new technologies (on their respective investment universe) to adress key long term trends like the increase and ageing of the population and the resource scarcity. They also incorporate climate-related risks and opportunites as part of their SRI strategy.


SG 14 CC.

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

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.

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

As we engage with issuers on ESG issues all year round, one of our key priorities is to encourage issuers to be more transparent regarding ESG incorporation and Corporate Social Responsibility as well as to release their approach and policies as regard CSR and extra-financial performance (KPI).

As regard climate-related risks, the disclosures recommended by the TCFD are very relevant and useful for all investors so we encourage issuers we engage with to adopt them.

This engagement policy applies to all issuers whose securities are held by our investment funds as well as the issuers of the investment universes of our funds that may be included in our funds following a fundamental and extra-financial analysis.


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.

92 %

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

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

Brief description and measures of investment

100% of our fixed income non financial corporate securities are dedicated to the financing of solar and wind farms as well as the production of green hydrogen.

89% of our private equity holdings are in companies involved in the production of green energy (solar and wind farms) and of green hydroge

Asset class invested

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

Brief description and measures of investment

The listed equity holdings we manage in the healthcare sector are invested through our two thematic funds: Trecento Sante ISR (100% invested in global healthcare stocks) and Trecento Robotique ISR (26% invested in the healthcare sector).

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



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