Integration
After ten years of Socially Responsible Investment (SRI), La Financière l’Echiquier has made a new commitment: to extend its expertise in Environmental, Social and Governance (ESG) issues to all of its funds.
Why this approach and why now?
Our ten-year commitment to SRI has fuelled our strongest conviction, namely that the most virtuous companies on ESG issues are also the most successful. This large-scale ESG integration plan is aimed at gradually aligning the practices of the entire range of funds with those used in our flagship SRI funds – Echiquier Major and Echiquier Positive Impact.
Our aim: continue to manage your savings responsibly with an enduring obsession for performance!
Having know-how…
Our ESG methodology, forged ten years ago, has been enriched over the years. We apply it systematically and rigorously to all the stocks present in our SRI funds. We have adapted it to analyse 100% of the securities invested in our non-SRI funds (versus 60-70% today). Governance remains our starting point and has a dominant weighting in our non-financial scoring of firms.
As shareholders, we have a say in the governance of the companies in which we invest. By exercising our voting rights at general meetings, we make our contribution to its improvement. Early on, we set the minimum holding threshold at which voting became mandatory at 1%. We felt that we did not have a sufficient interest to wield influence below that threshold. But times are changing! Our dialogue with companies, including some whose market capitalisations amount to tens of billions, proves that we can make a difference, even in companies in which we own only a tiny share of the capital. Replicating our practice for the securities held in SRI funds, we have set ourselves a new target for 2018: vote for all the securities held in our funds, regardless of the percentage ownership.
Our team of analysts and managers will also use each meeting with management teams to engage in dialogue on environmental, social and governance issues, and suggest areas for improvement.
Aware that reputational risk can affect companies’ value, we have also created an ethics committee to rule on the most controversial companies.
… and having it be known!
The notion of ESG integration encompasses very different practices. This letter and the documentation available on our site outline our approach clearly. Our commitment to greater transparency will materialise in the coming weeks as we adapt our monthly reports. You will find information on the average ESG rating of the portfolios, as well as the carbon footprint of most of our funds. La Financière de l’Echiquier is committed to a process of progress, mirroring the approach it expects from the companies in which it invests. These new indicators will allow our clients to track our progress in integrating ESG issues over time. Continuing along the path taken more than ten years ago, our objective is unchanged: deliver the best performances.