After the ESG screening process, we conduct an ESG integration process in the form of a detailed ESG analysis of an issuer, on the 3 key pillars E, S and G, that enables the analyst to assess the global ESG policy of the issuer and to allocate a proprietary ESG score (from 1 to 5, 5 being the highest score). This score is highly important for the weighting of the portfolio (overweight/underweight at sector and stock level) since :
- the average ESG score of the portfolio (position-weighted) must be higher at all times than the average ESG score of the universe of the fund (weighted by the market capitalisation in euros of each issuer) after excluding the 20% worst-rated issuers from the universe.
- controversies arising from an issuer result in a penalty affecting the maximum weighting of an issuer in our investment funds. In extreme cases, the issuer can even be added to the exclusion list of Trecento AM.