Measurability & transparency in impact investing in listed equities – we continue to improve our approach

A responsible investor for close to 35 years and a pioneer of impact investing in listed equities in France since 2017, La Financière de l’Échiquier (LFDE) is publishing three impact reports audited by Better Way1, together with a third Climate and Biodiversity Strategy report. These annual reports are a reflection of the priority given to transparency, which lies at the heart of the responsible investment approach we share with our majority owner, LBP AM. 

The impact reports for our three impact funds (classified as Article 9 funds under the SFDR) are freely available on our website, lfde.com; they detail the impact generated by the portfolio companies and the engagements undertaken by the management team in 2023. They present the full range of methods applied to contribute to the impact theses of the following strategies:  

• • The sixth Impact Report of Echiquier Positive Impact Europe, a strategy based on the United Nations Sustainable Development Goals and LFDE’s first impact fund.
  • The third Impact Report of Echiquier Climate & Biodiversity Impact Europe, a fund focused on climate transition and biodiversity.
  • The second Impact Report of Echiquier Health Impact For All, a fund dedicated to access to healthcare.

   

  We formalised our approach as an impact investor in our 2021 Impact Doctrine, which is being continuously enhanced through our active contribution to industry working groups. In 2024, inspired by the work of the Institut de la Finance Durable (IFD)2 to which our teams have actively contributed, we formalised the theory of change3 for each of our impact funds. This process aims to illustrate the impact thesis for each of our funds and to identify the external factors which may limit the achievement of the intended change and which must therefore be the focus of increased efforts. 

  In parallel, we are consolidating our position as a pioneer in impact investing through a process of continuous improvement. In 2024, we will be one of the initial signatories to the IFD’s Investor Impact Charter. Accordingly, we will publish a grid to evaluate the potential impact of each of our impact strategies, resulting in a positive overall score for each fund; it will then be submitted to the Board of Directors of the Echiquier Impact SICAV for verification. In our opinion, this innovative exercise represents a means of enhancing our impact approach and identifying potential areas for future progress. This approach demonstrates our ability to innovate and our leadership on impact matters in listed markets. 

  The third Climate & Biodiversity Strategy report of LFDE presents a full and instructive explanation of our sustainability approach with regard to the climate and biodiversity, which goes further than the regulatory requirements of Article 29 of the French Energy-Climate Law (LEC). This exercise is structured in three parts and reports on action undertaken in 2023 in pursuit of the nine undertakings of this strategy.  

  Olivier de Berranger, CEO and co-CIO of La Financière de l’Échiquier, states:“Impact investing in listed equities is a prime focus that we share with our long-term majority owner, LBP AM. It forms part of the pioneering commitment of our parent company to sustainable finance.” 

  Coline Pavot, Head of Responsible Investment Research at La Financière de l’Échiquier, adds: “We believe that impact assessment is key, in particular for explaining to savers the impact of their investments. In our opinion, these instructive, transparent reports are essential. We are also proud of additional developments in our impact approach this year, which are based on the hard work of the Institut de la Finance Durable on this issue.”  

    

  Disclaimer Investors are advised that investing in the sub-fund does not generate a direct impact on the environment and society; instead, the sub-fund seeks to select and invest in companies that meet the specific criteria defined in the management strategy. These funds entail the risk of capital loss, equity risk, the risk of investing in small and mid-cap stocks, foreign exchange risk, discretionary management risk, and risk related to sustainable investing. The decision to invest in these funds should not be based solely on its non-financial aspects and should take into account all other characteristics of the fund, in particular its risks, as described in its prospectus. For more information on the characteristics, risks and fees of these funds, please read the regulatory documents available on our website www.lfde.com.