Amundi Outlook Investment Konferenz 2018
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Amundi Outlook
Investment Konferenz 2018
Environment – Social – Governance
Amundi’s approach to Responsible Investment
Thierry Bogaty, Head of Amundi’s Responsible Investment Expertise
München, 8. März 2018
For Broker/Dealer Use Only and Not to be Distributed to the Public.
Agenda
1. A fast growing market
2. Responsible Investment: an integral part of Amundi’s strategy
3. Amundi’s ESG analysis
4. Amundi’s offer
2 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
01
A fast growing market
3 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
A Global Responsible Investment Market of more than $23Tn*
Asia : 2%
Canada : 5%
Europe : 53%
USA : 38 %
Australia/NZ :
2%
EUROPE $ 12 Tn NORTH AMERICA $ 9.8 Tn AUSTRALIA / NZ $ 0.5 Tn
+12%* +41%* +248%*
BEST IN CLASS
EXCLUSION EXCLUSION
ENGAGEMENT & VOTING ASIA $ 0.5 Tn
FRANCE € 3.1 Tn ** +912%**
Focus E Environmental EXCLUSION
USA $ 8.7 Tn
UK € 1.6 Tn ** Focus G Governance ASIA ex Japan $ 0.05 Tn
Focus G Governance Focus E Environmental
CANADA $ 1 Tn
NORDICS € 1 Tn ** Focus G Governance
JAPAN $ 0.5 Tn
Focus E Environmental S Social Focus G Governance
*GSIA; Global Sustainable Investment Review, 2016 **Growth of SRI Assets by Region 2014–2016 Eurosif 2016
4 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
A response to Investors’ expectations
RISKS DUTIES
o Reputational o Fiduciary duty
o Operational o Legal or regulatory
constraints
o Regulatory
o Investors/ NGO*
o Financial
influence
VALUES RETURN
o Ethical reasons o Financial Opportunities
o Impact (social,
environmental…)
*Non-governm ental organisations
5 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
Links between ESG and return: a broad international consensus 6 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
02
RI: an integral part of Amundi’s strategy
7 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
One of Amundi’s four founding pillars 8 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
Amundi & RI: a long-standing history
Amundi is convinced that ESG issues will play an increasingly important role in both
Equity and Fixed Income portfolios. ESG expertise allows the integration of intangible
risks linked to corporate activity.
1989 2003 2006 2013 2016 2018
1st SRI fund Dedicated Founding SRI process 1st company €172bn
launch department signatory of officially to obtain the SRI AuMs2
the PRI certified by SRI Label for
AFNOR1 several funds
Mainstream
1
1 French certification
2 As of 31 January 2018
9 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
Amundi, a rewarded & certified ESG company
Our awards
Rated A+ by the PRI Best Asset manager
for SRI /ESG
PRI annual assessment: Amundi rated A + in 2017 for 1st place in the SRI & Sustainability ranking
the third consecutive year for its responsible investment published by Extel and UKSIF, in 2015, 2016 and 2017 in
approach funds.. the Asset Management Best Firms category for SRI/ESG..
SRI prize for the quality of its Best firm and analysts
Responsible approach for SRI & Corporate Governance
Investor Awards 2017: Amundi won the SRI award Top 3 in 2014, 2015 and 2016 of the IRRI ranking which
among 40 companies in the running. rewards the best governance and SRI analysts.
Our certifications
Amundi is also the first company to obtain the SRI
First asset management company certified by AFNOR Label created by the Ministry of Finance and Public
for its SRI approach. Accounts for several funds.
10 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Around € 200 bn in Responsible Investment AUM*
Breakdown of Amundi Responsible Investment
Environment
ESG Impact Investing
& Energy Transition
-
ESG analysis / Exclusion policy /
-
Innovative solutions to finance the energy
-
5 main investment themes: Housing / Employment /
Engagement policy transition and fight global warming Health / Environment / International Solidarity
SRI offer 1 29%carbon
Low Social impact
Customized ESG filters 2 Green bonds
Thematic funds 3
Real assets
1 Considerationof E, S and G according to Am undi Best-in-class approach
2 Considerationof E, S and/or G (all criteria taken together or separtely) according to our clients criteria
3 Green technologies, water, etc. *including €170 bn in SRI AUM
11 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.A dedicated ESG governance
ESG ADVISORY
COMMITTEE COMMITTEE
MEDICI
COMMITTEE
12 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.03
Amundi’s ESG analysis
13 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.A combination of quantitative and qualitative approaches
Quantitative approach Qualitative approach
⎯ Brokers & Financial analysis ⎯ Continuous dialogue with companies
⎯ Extra-financial data providers
⎯ Extra-financial data providers
Analysis
More than 5,000 issuers covered
100% MSCI World
96% Barclays Global Corporate
14 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.A standardized and pragmatic approach
⎯ The analysis is based on 15 general & 21 sector specific quantifiable & measurable
criteria
E S G
Emissions & energy use Employment practices Board independence
Water Community involvement Audit and control
Green cars* Access to medicine* Remuneration
Green financing* Digital device* Shareholders’ rights
⎯ Criteria weightings depend on sector
* Sector specific
Source: Amundi – 08/2017
15 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.CASE STUDY 1 The water criterion at electric utilities 2/2
⎯ GPS data, type of plant; production capacity, parent company (ENIPEDIA)…
⎯ Superposition with water stress in the world (WRI)
Source: www.google.fr/maps - 31/12/2016
Type: Nuclear
Output: 17 700 000 MWh
CO2 emissions: ~0
Withdrawal: 223 293 l/MWh
Consumption: 5 023 l/MWh
________________________
Water need: 10/10
Water Stress risk: 5/10
Trend 2030: x1,5
Risk score: 10/10
Engagement with the company
Source: Amundi; World Resource Institute and ENIPEDIA - 31/12/2016
16 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.CASE STUDY 2 The water criterion in the shale gas industry (1/2) ⎯ Distribution of operating wells according to local water stress Source: FracFocus, Amundi - 31/12/2016 17 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
CASE STUDY 2 Water stress exposure in the shale gas industry (2/2)
% of well in water stress
Source: Amundi; World Resource Institute and Fracfocus - 31/12/2016
18 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.CASE STUDY 3 Mining – exposure to water related risks Sample: 250 projects out of the 331 analyzed Source: AME and www.wri.org/our-work/project/aqueduct - 31/12/2016 19 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
CASE STUDY 4 Palm oil – tracking burning Source: WRI / Global Forest Watch/ NASA/ The Guardian - 31/12/2016 20 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
Transparency and traceability
S Rating
ESG Rating
G Rating
E Rating Rating on
criteria
Rating on
providers
21 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Breakdown of the issuers based on Amundi’s ESG ratings 22 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
Amundi exclusion policy: 3 types of “G rated issuers”
1
o No direct investments in companies involved in the production or sale of
Norms based screening1 anti-personnel mines and cluster bombs, prohibited by the Ottawa
Regulatory motivation and Oslo conventions2 and the French law.
o Exclusion of companies involved in the production or sale of chemical,
2 biological and depleted uranium weapons.
o Exclusion of companies whose coal extraction activity exceeds 30% of their
Amundi sector policy turnover or, after a qualitative and prospective analysis, companies producing
100 million tons and more of coal per year.
o Exclusion of tobacco companies from all SRI open-ended funds.
3
Norms based screening1 o Exclusion of companies that violate, repeatedly and seriously, one or
Amundi self-regulation more of the ten principles of the Global Compact.
1 Definition: Screening of investm ents according to their com pliance with international standards & norm s.
2 Conventions ratified by 162 and 66 countries respectively (including European States and excluding United -States).
23 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Amundi’s SRI rules
Scope RI: ESG / Environment & Energy transition / Impact Investing
Responsible => Systematic exclusion of issuers rated G for all active strategies
Investment (RI)
Exclusion of Average ESG score of
E, F, G SRI portfolio
scores >= C
SRI rules
ESG average rating in
the portfolio 90 % minimum
>= of issuers in the
ESG rating of the portfolio rated in terms
benchmark / of ESG
investment universe
⎯ Example of an SRI portfolio distribution by ESG rating:
24 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Amundi’s three-steps engagement policy
Dialogue nearly Votes at
Key figures1
with more than 250 >2600
300 pre-AGM General Meeting
worldwide
1 Amundi’s
companies engagement
data as of 30 December 2017
25 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Focus engagement for influence How are engagement issues chosen? ⎯ Frequently subject to controversy ⎯ Strong legislative momentum ⎯ Risks ⎯ Topics not covered by competitors Topics covered since 2013: ⎯ The living wage ⎯ Coal management in electricity generation sector ⎯ Eliminate child labour in the supply chains of tobacco and cocoa sectors ⎯ Compliance of minerals from Conflict areas: mines ⎯ Responsible exercise of influence practices: pharmaceutical and automotive industries ⎯ Respect for human rights and the mining and oil sectors ⎯ Access to nutrition and fight against food waste in the agri-food and retail sector • Available on amundi.com 26 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.
EXAMPLE N°1 Food loss and waste in food and food
retail industries
1.3 billion tonnes
~ USD 1 trillion
1/9 people in the world
undernourished or ~800 mln
people
If just 1/4 of currently lost or
wasted food is saved feed
almost all hungry people in
the world
Lack of transparency from
Source: Food and Agriculture Organisation Source: Food and Agriculture Organisation companies in 2013
⎯ Theme engaged with companies in 2013, ahead of international conventions and norms set in
2016.
⎯ Reviewed in 2015, and closed in 2017 with positive outcomes at companies:
⎯ Strengthened existing strategies, or increasingly taken actions upon acknowledgement of the financial
materiality of fight of food loss and waste
⎯ Implemented Performance Indicators:
⁃ % of food donated to associations, food banks
⁃ % of waste food / revenue Amundi supports UN SDGs
27 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.EXAMPLE N°2 Child labour in the cocoa and tobacco
industries
152 million children in Child
Labour in 2016.
Child Labour in cocoa and
tobacco plantations : worst
forms of child labour
Lack of transparency from
companies
Source: International Labour Office
⎯ Theme engaged in 2016, reviewed in 2017 with positive outcomes at companies:
⎯ Cooperations with governments, international institutions, NGOs
⎯ Training to employees and suppliers to better manage the issue, find solutions and produce
reporting
⎯ Better transparency, with release of public reports on child labour and Performance Indicators:
⁃ Children’s birth certificate checked
⁃ Number of children reintegrated to school
Amundi supports UN SDGs
28 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Collective Initiatives: an other way to spread ESG best practices
- PRI - Principles For Responsible Investment
- Finance for Tomorrow
Broad-based Initiatives
- EFAMA and AFG Responsible investment working groups
- Pensions For Purpose
- IIGCC – Institutional Investors Group on Climate Change
- CDP – Carbon Disclosure Project
- Water Disclosure Project
Environmental
- Portfolio Decarbonization Coalition
Initiatives
- Green Bonds Principles
- Climate Bonds Initiative
- Climate Action 100+
- Access to Medicine Index
- Access to Nutrition Index
- Clinical Trials Transparency
Social Initiatives - Human Rights Reporting and Assurance Frameworks Initiative
- PRI Human Rights Engagement
- WDI – Workforce Disclosure Initiative
- Finansol
- ICGN – International Corporate Governance network
Governance Initatives
- ACGA – Asian Corporate Governance Association
29 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.04
Amundi’s offer
30 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Amundi Responsible Investment solutions
BROAD RANGE OF RESPONSIBLE INVESTOR-ORIENTED SOLUTIONS
ESG
REAL &
MONEY MARKET BOND MULTI-ASSET EQUITY
ALTERNATIVE
– Money market – Euro Credit * – Absolute Return – Passive – Loans
– Euro Govies – Tilted * – Real Estate
– Convertible – Benchmark – – Global Equity – Private Equity
– Global Corporate Smart Beta – Infrastucture
relative
– Global Aggregate – Global Equity
– Emerging – Flexible – Global Dividend
Corporate
*The ISR Label is supported by the French Ministry of Finance and aims to make SRI products more visible by savers in France and Europe.
31 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Amundi’s capabilities to fit specific investment framework
INVESTMENT MANAGEMENT SPECIFIC SET OF ENGAGEMENT &
UNIVERSE STYLE CLIENTS’ CRITERIA VOTING
– All regions – Passive – List of excluded – Amundi's dialogue
companies and voting policy
– All asset classes – Tilted
- Money market – Exclusion of
- Bond – Stock Picking
controversial
- Multi-asset
activities
- Equity
- Weapons
- Real & Alternative
- Tobacco
- Alcohol
- Arctic oil exploration &
drilling
- etc.
32 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Meeting the Sustainable Development Goals (SDGs) with Amundi
Origin and Concept
⎯ 17 Sustainable Development Goals*, part of the 2030 Agenda for
Sustainable Development
⎯ Created by the United Nations to replace Millenium Development Goals
(MDGs) that expired at the end of 2015
⎯ Adopted by 193 countries to end poverty, protect the planet and ensure
prosperity for all by 2030
⎯ Designed for Governments, but also for civil society and private sector
“This is the people’s agenda, a plan of action for ending poverty in all its
dimensions, irreversibly, everywhere, and leaving no one behind”
Ban Ki-moon, former UN secretary general (August 2015)
* For further information: http://www.un.org/sustainabledevelopment/sustainable-development-goals/
33 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Targets and topics related to the SDGs
End poverty in all End hunger, achieve Ensure healthy lives Ensure inclusive and Achieve gender Ensure availability
its forms food security and and promote well- equitable quality equality and and sustainable
everywhere improves nutrition and being for all at all education and empower all women management of
promote sustainable ages promote lifelong and girls water and
agriculture learning opportunities sanitation for all
for all
Ensure access to Promote sustained, Build resilient Reduce inequality Make cities and Ensure sustainable
affordable, reliable, inclusive and infrastructure, within and among human settlements consumption and
sustainable and sustainable economic promote inclusive countries inclusive, safe, production patterns
modern energy for all growth, full and and sustainable resilient and
productive employment industrialization and sustainable
and decent work for all foster innovation
Take urgent action Conserve and Protect, restore and Promote peaceful and Strengthen the
to combat climate sustainably use the promote sustainable use inclusive societies for means of
change and its oceans, seas and of terrestrial ecosystems, sustainable implementation
impacts marine resources for sustainably manage development, provide and revitalize the
sustainable forests, combat access to justice for all global partnership
development desertification, and halt and build effective, for sustainable
and reverse land accountable and development
degradation and halt inclusive institutions at
biodiversity loss all levels
Source: https://sustainabledevelopment.un.org/sdgs/
34 | Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.Amundi meets the SDGs through 3 main areas
⎯ More than 5,000 issuers rated
ESG Analysis ⎯ 36 criteria of analysis
⎯ Strict exclusion policy
⎯ A suitable response to enter into dialogue with companies
Engagement Policy ⎯ Engagement for influence on specific themes
⎯ Active support to collective initiatives
⎯ Sustainable & Responsible Investment (SRI)
Responsible Investments ⎯ Energy transition
⎯ Social & environmental impact
35 Amundi Outlook Investment Konferenz 2018 | For Broker/Dealer Use Only and Not to be Distributed to the Public.DISCLAIMER
Information for broker/dealer use only.
It may not be reproduced or communicated to the public, including clients, in any form whatsoever, without the written consent of the management company.
Amundi AM, French joint stock company (“Société Anonyme”) with a registered capital of € 746 262 615 euros and approved by the French Securities Regulator (Autorité des
Marchés Financiers-AMF) under number GP 04000036 as a portfolio management company, 90 boulevard Pasteur -75015 Paris- France – 437 574 452 RCS Paris.
This material is solely for the attention of institutional, professional, qualified or sophisticated investors and distributors. It is not to be distributed to the general public, private
customers or retail investors in any jurisdiction whatsoever nor to “US Persons”. Moreover, any such investor should be, in the European Union, a “Professional” investor as
defined in Directive 2004/39/EC dated 21 April 2004 on markets in financial instruments (“MIFID”) or as the case may be in each local regulations and, as far as the offering in
Switzerland is concerned, a “Qualified Investor” within the meaning of the provisions of the Swiss Collective Investment Schemes Act of 23 June 2006 (CISA), the Swiss
Collective Investment Schemes Ordinance of 22 November 2006 (CISO) and the FINMA’s Circular 08/8 on Public Advertising under the Collective Investment Schemes
legislation of 20 November 2008. In no event may this material be distributed in the European Union to non “Professional” investors as defined in the MIFID or in each local
regulation, or in Switzerland to investors who do not comply with the definition of “qualified investors” as defined in the applicable legislation and regulation. This document is
not intended for citizens or residents of the United States of America or to any «U.S. Person» , as this term is defined in SEC Regulation S under the U.S. Securities Act of
1933.
This material is provided for information purposes only and does not constitute a recommendation, a solicitation, an offer, an advice or an invitation to purchase or sell any
fund, SICAV, sub-fund, (“the Funds”) described herein and should in no case be interpreted as such.
This material, which is not a contract, is based on sources that Amundi considers to be reliable. Data, opinions and estimates may be changed without notice. Amundi accepts
no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held responsible for any
decision or investment made on the basis of information contained in this material. The information contained in this document is disclosed to you on a confidential basis and
shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi, to any third person or entity in any country or jurisdiction which
would subject Amundi or any of “the Funds”, to any registration requirements within these jurisdictions or where it might be considered as unlawful. Accordingly, this material is
for distribution solely in jurisdictions where permitted and to persons who may receive it without breaching applicable legal or regulatory requirements. Not all funds, or sub-
funds will be necessarily be registered or authorized in all jurisdictions or be available to all investors. Investment involves risk. Past performances and simulations based on
these, do not guarantee future results, nor are they reliable indicators of futures performances. The value of an investment in the Funds, in any security or financial product
may fluctuate according to market conditions and cause the value of an investment to go up or down. As a result, you may lose, as the case may be, the amount originally
invested.
The logos or brands of companies mentioned in the document are used for illustration purposes only and remain the exclusive property of their respective owners. The
information contained in this material shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi, The information
contained in this document is deemed accurate as of June 2017.
Amundi Asset Management - Société Anonyme au capital de 746 262 615 euros - 437 574 452 RCS Paris
Siège social : 90, boulevard Pasteur - 75015 Paris - France
Adresse postale : 90, boulevard Pasteur - CS 21 564 - 75730 Paris Cedex 15 - France
Tél. : +33 (0)1 76 33 30 30 – amundi.com
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