Update on... ECHIQUIER POSITIVE IMPACT EUROPE | November 2025
Adrien Bommelaer, Co-Head of Impact & Environment, Paul Merle, Fund Manager, Luc Olivier, CFA, Fund Manager/Analyst, La Financière de l’Échiquier
Echiquier Positive Impact Europe is an impact fund aligned with the UN Sustainable Development Goals (SDG). It has the long-term objective of delivering financial returns by investing in companies operating activities that provide solutions to sustainable development challenges, and which stand out for the quality of their governance, social policies and environmental policies. We therefore select European stocks that contribute to achieving the SDGs, have a high-quality ESG profile, and which we believe offer attractive upside potential. We engage in close dialogue with management, and share areas for improvement with companies to help enhance their impact and ESG practices.
To date, the fund’s performance in 2025 has been hindered by macroeconomic and geopolitical factors favouring sectors that are excluded by its philosophy, namely banking, defence, tobacco, mining and metals. At the same time, sectors with a strong structural presence, such as technology, healthcare, natural ingredients, professional services and sustainable packaging, have underperformed. Nevertheless, the fund stands out for its positive selection of stocks linked to the energy transition (SDG 7), such as Legrand, Spie and Nexans, and to SDG 3 (good health and well-being), such as EssilorLuxottica and Allianz, for its exposure to health insurance.
OPERATIONS
Tactical operations
Echiquier Positive Impact Europe’s investment philosophy enables exposure to various management styles and market capitalisation sizes. Although this framework is limited by ESG and impact exclusions, we have been able to strengthen small and mid-sized companies, particularly value-style (undervalued) companies. We have therefore created positions in mid-cap value stocks, including water treatment leader Kemira (SDG 6, clean water), electrical cable specialist Nexans (SDG 7) and Rockwool (SDG 7), a specialist in mineral wool insulation. Since the beginning of the year, we have also continued to make the portfolio more defensive and to reduce its average valuation.
Fundamentals
The post-Covid market environment is characterised by higher interest rates and inflation than in the previous decade. Against this backdrop, we have increased our exposure to financial stocks (insurance and reinsurance) and reduced our holdings in stocks with high debt or low cash generation. Additionally, we have examined two sectors not currently represented in the fund, namely banking and telecoms. According to our research, only mutual banks are transparent enough to analyse their impact. This is the case with Triodos, which has been in the portfolio since this summer. Triodos is a pioneer in the Netherlands, historically mutualist, and exclusively finances social and ecological transition. The telecoms sector appears to be the main driver of digital inclusion in developing countries. We have therefore taken a position in Telenor, a Norwegian telecoms operator with a presence in several Asian countries with poor network coverage.
INVESTMENT STRATEGY
Despite numerous setbacks in public policy and private commitments to sustainable development in recent years, our investment strategy remains unchanged. The fund maintains its ESG exclusion policy, notably excluding fossil fuels, tobacco and alcohol, as well as its impact exclusions, notably traditional banks and mining companies. Qualitative ESG analysis, enhanced by quantitative tools, remains systematic. Finally, the portfolio turnover rate is low, with an average holding period of almost five years, which demonstrates our long-term commitment to the companies in which we invest. We believe that our responsible investment discipline continues to drive long-term performance.