The challenges of ESG integration are multiple, whatever the asset class: to demonstrate in solid terms our commitment to responsible investment, to combine ESG issues and our fiduciary responsibility, and finally to offer know-how to the end clients that we already share with our institutional clients through partnerships and / or management mandates.

The ESG integration in 2018 in our quantitative equity range is a testament to our ambition to become one of the major players in Responsible Investment. The transformation of other asset classes is initiated and will be done gradually in the interest of our clients.


Our philosophy

Pragmatism and financial practicalism are at the heart of our responsible investment philosophy in order to combine financial and extra-financial performance. Our global approach has been designed to apply to all asset classes and geographical areas while meeting their specificities.

This risk approach goes beyond the simple use of the issuers' overall rating and is based on the analysis of the financial materiality of the ESG criteria by asset class and region. It aims to build an ESG universe that has financial characteristics that enable the implementation of financial management.

Financial materiality at the heart of our methodology

Our approach differs from traditional portfolio construction approaches (Best-in-Class, Best-Effort and positive selection on the extra-financial rating) or derived from an overall view of the ESG rating. We have in fact defined it from the concept of "materiality" in the ESG criteria in order to avoid the compensation effect between criteria underlying the construction of the overall score.

This approach consists of evaluating the financial relevance (materiality) of the 15 common criteria in order to retain only the criteria that will positively impact the risk / return profile of a given universe. The selection of criteria is specific to each asset class and geographic area. As the financial materiality of the criteria is dynamic over time, the selection is reviewed annually.

Upstream of financial management, we define an eligible universe at two levels: exclusion of the worst issuers on the global ESG rating and the criteria currently considered the most material.



The 4 key points of our approach

The risk-based approach of CPR AM thus minimizes the risk for investors. The application of the ESG filter does not alter the portfolio's exposure to the various factors neither does it alter the risk/return trade off.