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Novethic

Service Provider Reporting Framework 2017

You are in Strategy and Governance » Responsible investment policy

Responsible investment policy

SG 01. Responsible investment policy

01.1. Describe how your organisation’s philosophy incorporates environmental, social and governance factors, and the link to your business offerings.

          Novethic is a research and media expert in sustainable finance based in Paris. The subsidiary of the Caisse des Dépôts group pursues three main goals: 

FOSTERING QUALITY OF RESPONSIBLE INVESTMENT 
Novethic is a pioneer in certification in Europe. It has years of experience in the labelling market. Since 2009, it has created and promoted a label scheme that indicates the sustainable and environmental quality of financial products. Novethic offers two types of labels: ESG labels and Green labels. Furthermore, Novethic offers high-quality training to investment professionals to deepen their knowledge of sustainable and ESG issues. These training include Master Classes, which offer investors thorough training courses built on the experiences of their peers, and The Sustainable Investment Training Course, which trains financial advisors to integrate ESG and ethics factors in their investment advice. 

HIGH QUALITY RESEARCH
Novethic publishes high-quality research reports about the latest Responsible Investment trends, for instance figures on responsible investment market. In depth, it analyses the sustainable impact the investment process or climate commitment of investors might have. Moreover, Novethic describes exhaustively the mobilization of investors to tackle climate change. It has developed CarbonRisk, a tool to easily identify the investment risks associated to climate change. Regularly, it updates reports about this unique market development.  

RAISING AWARENESS FOR ESG TOPICS
Novethic’s ESG event has quickly become one of the major annual Responsible Investment events exclusively dedicated to asset owners. More than 300 people participate each year, both French and international. On top of that, The French editorial team publishes articles on topics as varied as the energy transition, working conditions in the subcontracting chain, and controversial companies.
        

01.2. Indicate whether you have policies that formalise the incorporation of your beliefs in your business offerings.

01.3. Indicate the components/types  of your policy

Policy components/types

01.4. Indicate how these are put into practice internally across the organisation.

          Certification process
        

01.5. Additional information [OPTIONAL]

It is our core mission to foster the quality of responsible investment markets and to disseminate reports and information about the latest market trends. Unlike other service providers, we fully focus our activities on responsible investment and corporate social responsibility.


SG 02. Publically available policies

02.1. Indicate which of your policy documents or statements (if any) are publicly available. Provide the URL and an attachment of the document.

Policy or document name

02.2. Additional information. [OPTIONAL]


SG 03. Norms used to develop policies

03.1. Indicate what standards you have used to develop your organisation’s policies. Tick all that apply.


SG 04. Policy offerings to clients

04.1. Indicate whether you offer any of the following policies to clients.

Off the shelf
Tailored
Asset class-specific RI guidelines
Sector-specific RI guidelines
Screening/exclusions policy
Engagement policy
(Proxy) voting policy
RI guidelines set out within the Investment Policy Statement (IPS)
RI guidelines set out in a freestanding RI policy
Multi-year RI implementation project plan
Conflict of interest management policy
Stockbroker allocation policy
Securities lending policy
Other, please specify (1)
Other, please specify (2)
Other, please specify (3)
None of the above

04.2. Provide a brief description of the key elements, any variations, or exceptions applying to these policies.

With our exclusive reports (Notes Orange) which are not publicly disclosed we provide guidance to an exclusive club of asset owners. In these reports, we address specific ESG aspects which might have a strong ESG and financial impact on investments,e.g. water treatment or the agroindustry.


SG 05. ESG/RI in business offerings

05.1. Describe how you include ESG/RI factors as an integral part of your business offerings.

Business area

Research and Data Provision

How you include ESG/RI factors

In our Notes Orange, distributed to an exclusive club of asset owners, we highlight the importance of ESG criteria into business decision.

Furthermore, we conduct surveys and publish reports about recent market development

Planned reports in 2017

  • Green funding in Europe
  • Climate and finance - current state of different approaches (divestment, Green funding, engagement etc.)
  • Impact investing - categorization of different approaches and their alignment with the Sustainable Development Goals
  • The impletation of Article 173 of the French Energy Transition law by Asset Owners.
  • ESG integration - latest market developments 

SG 06. Outsourcing of services (Private)


SG 06.2. Outsourcing of services (Not Applicable)


SG 07. Providing training/education

07.1. Indicate whether you provide training/educational services on ESG/RI. Tick all that apply.

07.2. Describe the main components of your training/educational services on ESG/RI and any variations depending on the group you provide training/education to.

ESG TRAINING

Novethic offers high-quality training to investment professionals to deepen their knowledge of sustainable and ESG issues. These training include Master Classes, which offer investors thorough training courses built on the experiences of their peers, and ESG training for beginners which explain the basics of specific responsible investment themes.

ESG trainings are available for the following topics (as of March 2017)

Master classes (the price of ESG risks)

  • The automotive sector
  • Oil and gas - the high-risk business cases
  • The pharmaceutical industry
  • Big Data
  • Pay gap
  • Water – a poorly managed business risk
  • The downside of excessive tax optimisation

ESG training for beginners:

  • Article 173 (energy transition law)
  • Green Bonds

07.2. Describe the main components of your training/educational services on ESG/RI and any variations depending on the group you provide training/education to.

See above


SG 08. Level of involvement in collaborative organizations and/or initiatives

08.1. Select the collaborative organisation and/or initiatives of which your organisation is a member, or in which it participated during the reporting year and the role you played.

Collaborative Organisation/Initiative

Provide a brief commentary on the level of your organisation’s involvement in the initiative [OPTIONAL]

          We conducted a joint survey about the Montreal Carbon Pledge.
        
          Climate Bond Initiative
        

Provide a brief commentary on the level of your organisation’s involvement in the initiative [OPTIONAL]

          
        
          Green Bond Principles
        

Provide a brief commentary on the level of your organisation’s involvement in the initiative [OPTIONAL]

          We are observer of the GBP
        

08.2. Additional information. [OPTIONAL]


SG 09. Applying, advancing and promoting the PRI principles

09.1. Describe how your organisation applies, advances and promotes the PRI Principles.

Our core mission is perfectly aligned with all of the six PRI principles.

With our reports and other publications we draw attention to the development of RI markets and explain which ESG criteria might be important for investors.   

As auditor of different certification schemes we accompany investors to integrate systematically ESG factors in their research and investment process. In this regard, we evaluate their selection as well as their engagement activities and take the reporting on this topics positively into account.  

Our ESG training solutions help investors to better understand why it is crucial to fully understand these criteria and how to integrate them in their own research and investment process.

09.2. Highlight whether there are any ways that your organisation would like to engage further with the PRI. [OPTIONAL]

We are always interested to conduct joint studies as we have done in the event of the Montreal Carbon Pledge study.


SG 10. Actions taken to promote responsible investment

10.1. Indicate which of the following actions your organisation has taken to promote responsible investments, independently of collaborative initiatives.

10.2. Additional information. [OPTIONAL]


SG 11. Long term trends

11.1. Indicate which of the following long-term trends are addressed in your product outputs.

11.2. Explain how this long term trend affects your product outputs.

We have published market reports which explain the link between climate change and investments, in particular how investors are tackling this issue (for instance divestment, green finance, engagement, etc.) Furthermore, as auditor of the Green French Public Label (EETC certification) we award funds which actively contribute to a energy transition.

11.2. Explain how this long term trend affects your product outputs.

We have published exclusive research reports which show the negative effect of resource scarcity on certain industries, for instance the agroindustry on water supply.

          Supply chain risks
        

11.2. Explain how this long term trend affects your product outputs.

We have published exclusive research reports which show the negative effect of a bad supply chain management on certain industries.


SG 12. Business certifications/accreditations (Private)


SG 13. Interaction with asset owners

13.1. Indicate whether you interact with asset owner clients.

13.2. Indicate the typical frequency and type of interactions with your asset owner clients.

Type of interaction

Frequency

          Annual event, exclusively dedicated to asset owners
        

Frequency

13.3. Tick boxes across level of employment of investor contact (C-level, PM etc.) and subject areas typically addressed with the contact(s).

Level of employment

Subject area(s)

          Development of policies and standards for Responsible Investment (for instance our CEO is member of the EU High-level Expert Group on sustainable finance)
        

Subject area(s)

          see above
        

Subject area(s)

          Dialogue about the quality of the research and investment process within the audit of SRI and Green Funds.
        

Subject area(s)

          see above
        

Subject area(s)

          see above
        

SG 14. Aligning approach with investor goals

14.1. Describe how you align your organisation’s philosophy on and approach to ESG/RI with investor goals.

14.2. Additional information. [OPTIONAL]


SG 15. ESG recommendations not aligned with investor goals

15.1. Describe what steps you take, if any, when your ESG recommendations are not in line with investor goals.

15.2. Additional information. [OPTIONAL]


SG 16. Seeking feedback from clients

16.1. Indicate whether you seek feedback from clients on your RI/ESG services and product offerings

16.2. Describe how you use this feedback on your RI/ESG services and product offerings.

We receive direct feedback from asset managers about the quality of our audit process. We integrate this feedback in the design of our questionnaires and use it as input for our research studies.


SG 17. Managing conflicts of interest

17.1. Indicate whether your organisation has a policy for managing potential conflicts of interest.

17.2. Describe how you manage potential conflicts of interest.

We have established several measures in order to ensure that no conflict of interest takes place:

Media center:

All our journalists are strictly bound to professional press rules. In particular, the media center does not accept to write and publish paid media content with commercial purposes. Furthermore, the media center is not involved in business development activities.  

The media center is entirely funded by our mother company which ensures a high journalistic independence.

Research Center:

As stated in public documents, all fees invoiced in the event of certification activities are paid in order to cover audit cost and to process the application. The fees are in no way be construed as a payment made in order to obtain the Label.  

The research center is a separate and independent body from the business development team. The latter is in charge to close commercial agreements. On the other side, all documents related to certification are saved on a specific server; accessible only to research center members. The business development team cannot consult and disclose this information to sponsors. Additionally, studies are primarily funded by our mother company which ensure a high research independence.

17.3. Describe how you ensure that company employees do not derive any personal gain from the use of information collected during your work process.

see above  


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