Building a better tomorrow together
Building a better tomorrow together
A journey into why ESG matters, how investors can help to change the world
for good and the Amundi advantage in making this happen.
A journey into becoming fully ESG integrated to reshape the world of responsible investing
Sustainability seems to be on everyone’s lips these days. The climate crisis in front of our doorsteps shows quite plainly that we all need to rethink our lifestyles if we want to give future generations the chance to also enjoy this planet.
Because one thing is clear: governments cannot solve the problem on their own. Economic and financial players have also a greater responsibility toward society. They have to actively encourage companies to implement a change - and have a major role to play in directing capital towards projects related to energy transition and by avoiding to buy stocks of the worst offenders. To put this into focus, just 100 companies are reported to be responsible for 71% of global greenhouse gas emissions.[1]
Putting this into practice is known as responsible investing, a strategy that incorporates environmental, social and governance (ESG) factors into investment decisions. Importantly, it doesn’t just target climate emergencies: other important social issues such as inequalities, diversity and social justice are also factored into sustainable investing decisions.
ESG involves assessing a company’s environmental, social and governance practices by screening them against a set of pre-defined criteria. In other words, companies need to fulfill requirements that are in line with certain standards.
Environmental aspects can include a firm’s carbon footprint, energy use and waste management. They may also take the company’s compliance with environmental regulations into account.
The social component focuses on issues that are related to a company’s culture and the relationship it maintains with its employees, suppliers and customers. Among others, the list of criteria can comprise diversity, labour standards and data protection.
Governance factors look at the firm’s management team and the way it runs the business. Shareholder rights, executive compensation as well as bribery and corruption are only some of the items on the agenda of responsible investors in that regard.
Defining ESG
Our research confirms that sustainable investments can generate healthy returns over time, which means that investors no longer have to decide between financial and moral objectives. There’s no contradiction between the two of them - on the contrary, we believe that they enhance each other.
VINCENT MORTIER
GROUP DEPUTY CIO AT AMUNDI
THE BASICS
Deep dive into ESG: Investing in a better tomorrow
Examples of ESG Issues
Sustainable investing is one of the founding pillars of Amundi, one of Europe’s largest investors. The company firmly believes that the positive effects generated by including environmental, social and governance factors in their investment process today ‘will be a source of sustainable performance’, according to Vincent Mortier, group deputy CIO at Amundi.
This is why Amundi is planning to apply a strict ESG policy to 100% of its open-ended funds under management and voting policy by 2021, thus throwing its full weight behind the fight for a better world by influencing companies in adopting more social responsible principles in their day to day activities.
The good news is that we believe this may also benefit investors in financial terms.
‘Our research confirms that sustainable investments can generate healthy returns over time, which means that investors no longer have to decide between financial and moral objectives. There’s no contradiction between the two of them - on the contrary, we believe that they enhance each other,’ Mortier says.
Where does Amundi come in?
Sources:
[1] https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change
https://public.wmo.int/en/media/news/show-your-stripes-heat-continues-2020
Climate change policies
Carbon emission goals
Energy efficiency
Diversity and inclusion
Working conditions
Human rights
Executive pay
Bribery and corruption
Transparency and disclosure
Environmental
Preserving natural spaces
Social
Respecting employees
and stakeholders
Governance
Improving the quality of management
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2020.. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks.
Past performance is not a guarantee or indicative of future results.
Date of publication: 22 September 2020
Doc ID#
Introduction to ESG with Amundi
How to do good and well with your investments
THE BASICS
Introduction to ESG with Amundi
A decade of ESG
Putting responsible investing into practice
The power and meaning of impact investing
Improving the world with your savings – what sounds like a new take on a ‘70s hippie slogan has become one of the core principles of modern-day investors. Responsible investment (RI) funds select companies which demonstrate the best environmental, social and governance practices. We believe that these may offer investors the best of both worlds: seeking attractive financial returns and a possibility to allocate money to causes they care about.
Incorporating moral beliefs into investment decisions is all well and good, but can investors actually generate positive returns if they solely focus on companies that live up to RI standards?
In our opinion very much so. Morningstar data reveal that 58.8% of sustainable funds that have been around for the past 10 years outperformed their average traditional peers across seven categories over a 10-year period to 2019.
Success rate of sustainable funds by Morningstar category (%)
While meeting the climate change challenge is primarily the responsibility of elected public authorities, clearly all actors, including financial players and end-investors, have a role to play. The question is, how can we, as savers and investors, help finance sustainable economies?
Jean-Jacques Barbéris
Member of the Executive Committee and Head of the Institutional and Corporate Clients Division & ESG
THE BASICS
How to do good and well with your investments
It is true that investing through a sustainable lens narrows down the realm of possible investment options. But just as one door closes, another one opens. In fact, the RI investment universe comes with a whole new range of opportunities that many investors were not even aware of before.
Source:
Morningstar Research. Data as of 31 December 2019.
IMPORTANT INFORMATION
This document contains information about responsible investing funds.
This material is for information purposes only, is not a recommendation, financial analysis or advice, and does not constitute a solicitation, invitation or offer to purchase or sell the Fund in any jurisdiction where such offer, solicitation or invitation would be unlawful. This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any U.S. Person (as defined in the prospectus of the Funds). The Funds have not been registered in the United States under the Investment Company Act of 1940 and units of the Funds are not registered in the United States under the Securities Act of 1933. Accordingly, this material is for distribution or to be used solely in jurisdictions where it is permitted and to persons who may receive it without breaching applicable legal or regulatory requirements, or that would require the registration of Amundi or its affiliates in these countries.
Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment in the Fund may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability. It is the responsibility of investors to read the legal documents in force in particular the current prospectus of the Fund. Subscriptions in the Fund will only be accepted on the basis of their latest prospectus and/or the Key Investor Information Document (“KIID” available in local language in EU countries of registration) which together with the latest annual and semi-annual reports may be obtained, free of charge, at the registered office of the management company of the Fund, or at www.amundi.lu.
Please note that the management company of any fund may de-notify arrangements made for marketing as regards units or shares of the Fund in a Member State of the EU in respect of which it has made a notification. In such a case and according to applicable laws, regulations and provisions contained in the prospectus of the Fund, investors may be able to repurchase or redeem, as the case may be, free of charge or deduction, the units or shares of the Fund concerned.
The information in this document is as at 31 August 2020 except where otherwise stated. This material is based on sources that Amundi considers to be reliable at the time of publication. Data, opinions and analysis 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 shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi.
Date of publication: 22 September 2020
---
Amundi Asset Management
A French simplified joint stock company (société par actions simplifiée), a portfolio management company approved by the “Autorité des marchés financiers” or “AMF” under the number GP 04000036 whose registered office is located 90 boulevard Pasteur, 75015 Paris – France –, under the Paris trade register number 437 574 452 RCS.
Investing responsibly can offer both financial opportunities and the possibility to improve the world.
RI is not about what you cannot do but about what you can do. We believe that the RI space can offer such a variety of possibilities that anyone interested in dipping their toes into the wide waters of responsible investing will find something that suits their taste.
According to Jean-Jacques Barbéris, Member of the Executive Committee and Head of the Institutional and Corporate Clients Division & ESG, it is important to be realistic when diving into this world: ‘We need to be humble and modest. While meeting the climate change challenge is primarily the responsibility of elected public authorities, all actors, including financial players and end-investors, have a role to play. The question is, how can we, as savers and investors, help finance sustainable economies?’
Barbéris says those who are willing to contribute to the fight against climate change have two main options: ‘The first is there are investment solutions such as green bonds. These debt instruments help finance projects that propel the energy transition.’
‘The second thing you can do as an investor is measure the impact your investment has on the climate. At Amundi, for example, we offer decarbonised portfolios,’ Barbéris says.
Decarbonised portfolios include companies that aim to emit as little CO2 as possible. Their company selection process aims to reduce the exposure to carbon intensive businesses across various sectors.
The realm of responsible investing can be complex at first sight, but asset managers such as Amundi are there every step of the way. The firm’s goal consists of making the entire investment process as uncomplicated and comprehensible as possible.
There’s something in RI for everyone
THE BASICS
Introduction to ESG with Amundi
A decade of ESG
Putting responsible investing into practice
The power and meaning of impact investing
THE BASICS
Deep dive into ESG:
Investing in a better tomorrow
Introduction to ESG with Amundi
How to do good and well with your investments
Deep dive into ESG: Investing in a better tomorrow
A decade of ESG
Putting responsible investing into practice
The power and meaning of impact investing
THE BASICS
It is the role of the private sector in general to integrate environmental, societal and governance issues. There are four main reasons for this.
Allow me to explain. Reason 1 has to do with the fact that, in a more liberal economy, economic and financial players have a greater responsibility towards society. The second reason deals with the important role we asset managers, as long-term investors, have to play in directing capital towards, for example, projects related to the energy transition.
Thirdly, we have to influence the strategies of companies, especially when we are among their main shareholders. We have to engage with companies to improve their E (environmental)
S (social) and G (governance) principles in their day to day business. The fourth reason is that we have a responsibility to our customers: in the end we have to deliver performance over the long term. And in a world where company valuations are not always based on tangible assets, responsible investment allows investors to base their investment decisions on determining and differentiating issues for the future that we believe will create value over the long term.
Environmental, social and governance (ESG) criteria are at the core of Amundi’s investment philosophy. ESG investing has been a part of our corporate DNA. Today, we manage more than €330bn (£302bn) in responsible assets [1] and our responsible investment approach has been awarded the top rating by the Principles for Responsible Investment initiative. [2] We see ourselves at the forefront of the sustainable investment revolution.
What role does ESG play at Amundi?
In a more liberal economy, corporates and financial actors have a greater responsibility towards society
Yves Perrier, Chairman of the board of directors at Amundi
THE BASICS
A decade of ESG
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 09 October 2020
Doc ID#
We sat down with Yves Perrier, Chairman of the Board of Directors at Amundi, to talk about the firm’s decade-long stance on ESG and what the future holds.
THE BASICS
Deep dive into ESG:
Investing in a better tomorrow
Introduction to ESG with Amundi
Acting as a responsible financial institution is a long-term commitment of Amundi since the start of the company and this commitment can be witnessed in different ways. First, through the responsible investment and savings offering Amundi is providing to its clients, second in our corporate societal and environmental policy (CSR).
While Amundi’s operations do not have a major direct environmental impact, as an asset manager on behalf of third parties, we are very conscious of the importance of applying such principles and convinced that every agent of our society’s eco-system should contribute and do its part to improve with regards to its activity.
In that respect, our sustainable goals within the company cover the following targets: reducing and managing Amundi’s operations’ environmental impact, eliminating discrimination, promoting equal opportunity, ensuring transparency and integrity in its governance, developing a long-term philanthropic policy and encouraging the social involvement of its employees.
Why exactly is ESG so important to you?
We aim for 100% ESG integration into our investment process [3] and voting policies by 2021. This means that all of our actively managed open-ended funds will have to maintain a higher ESG score than their benchmark index by the end of next year and that ESG issues are becoming central in our dialogue with companies and governments and in our voting policy.
We also plan to raise our passive ESG solutions by enhancing our responsible investing ETF and open-ended index funds range, implementing a systematic exclusion of the worst-rated companies in all open-ended funds and developing innovative ESG overlay solutions.
What makes Amundi one of the frontrunners of ESG investing?
It certainly sets the bar high – after all, with size comes responsibility. We want to lead by example, which means we set the highest standards for ourselves. It is not only our responsibility, but also our duty to our customers to comply with ESG standard. We know from experience that ESG-compliant companies are better equipped to outperform in the long run than their non-ESG peers. As a leading asset manager in the sustainable investment space, our goal is to make ESG investing mainstream.
Amundi is one of the largest asset managers in Europe.
What impact does size have on how you look at ESG?
Absolutely. Several academic works have been conducted aiming at showing the performance contribution of including ESG into portfolios. Amundi has also contributed to this debate and our research shows that the performance of ESG investing has improved over time and even outperformed in Europe since 2014 [4], be it on the equity or credit markets. We believe that incorporating ESG criteria into the investment process is vital to help generate long-lasting,
stable returns.
Doing good and doing well are no longer mutually exclusive. Instead, they are two sides of the same coin. We strongly believe that sustainable investing and financial outperformance go hand
in hand.
Does investing through an ESG lens really lead to better returns?
Two things come to mind in that regard. The first is energy transition. Businesses need to make sure that they are able to meet the objectives of the Paris Agreement. In our view, Companies must cut down emissions to prevent a dangerous process of destruction and destabilisation from unfolding. That’s why we consider the decarbonisation of portfolios as one of our top priorities.
Another key challenge is the improvement of social cohesion, especially in light of Covid-19. A robust social structure is key to strengthening the resilience of societies and businesses in times of turmoil. Amundi’s investment approach encourages companies to deal with social and governance issues head-on, which in our opinion will ultimately lead to a stronger society.
From an ESG perspective, what do you think are the main challenges we will have to face in the next five years?
Sources:
[1] Amundi, data as of June 2020
[2] UN PRI, United Nations Principles for Responsible Investment 2019
[3] For open-ended funds when the strategy or the investment universe allow to apply ESG criteria
[4] International Investment: “ESG integration outperforms since 2014 in Europe; Amundi study finds”, 13 February 2020. https://www.internationalinvestment.net/news/4010686/esg-integration-outperforms-2014-europe-amundi-study
Introduction to ESG with Amundi
Deep dive into ESG:
Investing in a better tomorrow
Putting responsible investing into practice
The power and meaning of impact investing
THE BASICS
How to do good and well with your investments
How to do good and well with your investments
We sat down with Yves Perrier, Chairman of the Board of Directors
at Amundi, to talk about the firm’s decade-long stance on ESG and what the future holds.
THE BASICS
What role does ESG play at Amundi?
It is the role of the private sector in general to integrate environmental, societal and governance issues. There are four main reasons for this.
Allow me to explain. Reason 1 has to do with the fact that, in a more liberal economy, economic and financial players have a greater responsibility towards society. The second reason deals with the important role we asset managers, as long-term investors, have to play in directing capital towards, for example, projects related to the energy transition.
Thirdly, we have to influence the strategies of companies, especially when we are among their main shareholders. We have to engage with companies to improve their E (environmental) S (social) and G (governance) principles in their day to day business. The fourth reason is that we have a responsibility to our customers: in the end we have to deliver performance over the long term. And in a world where company valuations are not always based on tangible assets, responsible investment allows investors to base their investment decisions on determining and differentiating issues for the future that we believe will create value over the long term.
Environmental, social and governance (ESG) criteria are at the core of Amundi’s investment philosophy. ESG investing has been a part of our corporate DNA. Today, we manage more than €330bn (£302bn) in responsible assets [1] and our responsible investment approach has been awarded the top rating by the Principles for Responsible Investment initiative. [2] We see ourselves at the forefront of the sustainable investment revolution.
In a more liberal economy, corporates
and financial actors have a greater responsibility towards society
YVES PERRIER,
Chairman of the board of directors AT AMUNDi
Why exactly is ESG so important to you?
Acting as a responsible financial institution is a long-term commitment of Amundi since the start of the company and this commitment can be witnessed in different ways. First, through the responsible investment and savings offering Amundi is providing to its clients, second in our corporate societal and environmental policy (CSR).
While Amundi’s operations do not have a major direct environmental impact, as an asset manager on behalf of third parties, we are very conscious of the importance of applying such principles and convinced that every agent of our society’s eco-system should contribute and do its part to improve with regards to its activity.
In that respect, our sustainable goals within the company cover the following targets: reducing and managing Amundi’s operations’ environmental impact, eliminating discrimination, promoting equal opportunity, ensuring transparency and integrity in its governance, developing a long-term philanthropic policy and encouraging the social involvement of its employees.
What makes Amundi one of the frontrunners of ESG investing?
We aim for 100% ESG integration into our investment process [3] and voting policies by 2021. This means that all of our actively managed open-ended funds will have to maintain a higher ESG score than their benchmark index by the end of next year and that ESG issues are becoming central in our dialogue with companies and governments and in our voting policy.
We also plan to raise our passive ESG solutions by enhancing our responsible investing ETF and open-ended index funds range, implementing a systematic exclusion of the worst-rated companies in all open-ended funds and developing innovative ESG overlay solutions.
Amundi is one of the largest asset managers in Europe. What impact does size have on how you look at ESG?
It certainly sets the bar high – after all, with size comes responsibility. We want to lead by example, which means we set the highest standards for ourselves. It is not only our responsibility, but also our duty to our customers to comply with ESG standard. We know from experience that ESG-compliant companies are better equipped to outperform in the long run than their non-ESG peers. As a leading asset manager in the sustainable investment space, our goal is to make ESG investing mainstream.
Does investing through an ESG lens really lead to better returns?
Absolutely. Several academic works have been conducted aiming at showing the performance contribution of including ESG into portfolios. Amundi has also contributed to this debate and our research shows that the performance of ESG investing has improved over time and even outperformed in Europe since 2014 [4], be it on the equity or credit markets. We believe that incorporating ESG criteria into the investment process is vital to help generate long-lasting, stable returns.
Doing good and doing well are no longer mutually exclusive. Instead, they are two sides of the same coin. We strongly believe that sustainable investing and financial outperformance go hand in hand.
From an ESG perspective, what do you think are the main challenges we will have to face in the next five years?
Two things come to mind in that regard. The first is energy transition. Businesses need to make sure that they are able to meet the objectives of the Paris Agreement. In our view, Companies must cut down emissions to prevent a dangerous process of destruction and destabilisation from unfolding. That’s why we consider the decarbonisation of portfolios as one of our top priorities.
Another key challenge is the improvement of social cohesion, especially in light of Covid-19. A robust social structure is key to strengthening the resilience of societies and businesses in times of turmoil. Amundi’s investment approach encourages companies to deal with social and governance issues head-on, which in our opinion will ultimately lead to a stronger society.
Introduction to ESG with Amundi
How to do good and well with your investments
Deep dive into ESG: Investing in a better tomorrow
A decade of ESG
Putting responsible investing into practice
The power and meaning of impact investing
THE BASICS
The change is part of a much wider shift in society. We now understand that vital issues like global warming and social inequality affect all our lives. We can see the effects of global warming around us and in the news, and it’s also clear that growing inequality weakens economies and the social fabric. There’s a widespread recognition that we have to make changes. But the challenges are big. The question for savers is, how can I put my savings to feed a virtuous cycle between a sustainable real economy and my investment goals?
Responsible investing has been a massive sea change in finance,
what do you think has driven that?
Our role is to expand the responsible offer so that individuals’ savings feed a virtuous cycle between a sustainable real economy and investment goals. Designing Responsible investment solutions as well as accompanying companies are the two aspects of our drive towards sustainable economic growth.
Elodie LaugeL,
chief responsible investment officer
THE BASICS
Putting responsible investing into practice
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2020.. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 30 September 2020
Doc ID#
The conviction that companies and investors have a social responsibility and that ESG is a driver of long-term growth, has driven Amundi’s mission for over a decade, chief responsible investment officer Elodie Laugel explains.
THE BASICS
Deep dive into ESG:
Investing in a better tomorrow
Introduction to ESG with Amundi
We want to give people a choice of how they can invest responsibly, and that comes down to making sure the necessary range of products is available. Putting that into practice means we have to systematically integrate ESG criteria, wherever it is feasible, in our investment processes, and to constantly innovate to find new ways of broadening the Responsible Investing spectrum. The trend is certainly positive and the Responsible Investing market is experiencing strong growth, but we believe that it is still too narrow to address both the financing needs of sustainability and the responsible savings goals. We need a “match” between Financing and Savings so that when people are looking to put their savings to work, the right responsible and sustainable solutions are there on the shelf. It’s about pushing the frontiers of investing, sourcing projects, creating new investment solutions to support financing of specific sustainable initiatives and that’s something Amundi has done throughout its history. In parallel, we have to communicate with investors, and tell them concretely how their money is used and is contributing to a more sustainable economy and growth, and in that way is used for creating a better world. We want them to know and experience that what they do with their investments can have a real impact in shaping a better future.
How does Amundi help with that?
That’s the other side of our role as responsible investors. We call it ‘mainstreaming’ of responsible investing (RI) factors. We will use RI criteria across all our active portfolios in our investment process by 2021. If every other investor were to follow the same approach, the effects would be enormous. Through making it “normal” companies get the signal that by not following responsible behaviour, capital will be reallocated to companies with better practices. At a fund level, we have attached to these “mainstreaming” ambitions a tangible outcome with an expected E (environmental), S (social) and G (governance) score above the one of its reference investment universe. With such strong commitment, we are taking the lead in this movement across all our portfolios and we hope the rest of the investment industry will follow.
You have specific vehicles to do that.
But do you think finance can be reformed entirely?
Yes, absolutely. Responsible investing was one of our founding pillars ten years ago, we’ve been doing it since the start. But in fact, we believe that pulling money out – or ‘divesting’ to use the technical term – is a last resort. We want to create long-term, structural change. Obviously, we have an exclusion policy that is systematically applied for some controversial activities, or for companies that have a business model that is too exposed to sectors that go against sustainability principles. But for the remainder, in general, we believe it is better to have a dialogue with company management to explain where they’re falling short and try to build a roadmap for the future. As Europe’s largest asset manager, it is also our responsibility to influence the strategies of companies, especially when we are among their main shareholders. We are also here to accompany them in their transition.
Have you already pulled money out of companies that don’t meet
your criteria?
Introduction to ESG with Amundi
Deep dive into ESG:
Investing in a better tomorrow
The power and meaning of impact investing
How to do good and well with your investments
THE BASICS
A decade of ESG
A decade of ESG
The conviction that companies and investors have a social responsibility and that ESG is a driver of long-term growth, has driven Amundi’s mission for over a decade, chief responsible investment officer Elodie Laugel explains.
THE BASICS
Responsible investing has been a massive sea change in finance, what do you think has driven that?
The change is part of a much wider shift in society. We now understand that vital issues like global warming and social inequality affect all our lives. We can see the effects of global warming around us and in the news, and it’s also clear that growing inequality weakens economies and the social fabric. There’s a widespread recognition that we have to make changes. But the challenges are big. The question for savers is, how can I put my savings to feed a virtuous cycle between a sustainable real economy and my investment goals?
How does Amundi help with that?
We want to give people a choice of how they can invest responsibly, and that comes down to making sure the necessary range of products is available. Putting that into practice means we have to systematically integrate ESG criteria, wherever it is feasible, in our investment processes, and to constantly innovate to find new ways of broadening the Responsible Investing spectrum. The trend is certainly positive and the Responsible Investing market is experiencing strong growth, but we believe that it is still too narrow to address both the financing needs of sustainability and the responsible savings goals. We need a “match” between Financing and Savings so that when people are looking to put their savings to work, the right responsible and sustainable solutions are there on the shelf. It’s about pushing the frontiers of investing, sourcing projects, creating new investment solutions to support financing of specific sustainable initiatives and that’s something Amundi has done throughout its history. In parallel, we have to communicate with investors, and tell them concretely how their money is used and is contributing to a more sustainable economy and growth, and in that way is used for creating a better world. We want them to know and experience that what they do with their investments can have a real impact in shaping a better future.
You have specific vehicles to do that. But do you think finance can be reformed entirely?
That’s the other side of our role as responsible investors. We call it ‘mainstreaming’ of responsible investing (RI) factors. We will use RI criteria across all our active portfolios in our investment process by 2021. If every other investor were to follow the same approach, the effects would be enormous. Through making it “normal” companies get the signal that by not following responsible behaviour, capital will be reallocated to companies with better practices. At a fund level, we have attached to these “mainstreaming” ambitions a tangible outcome with an expected E (environmental), S (social) and G (governance) score above the one of its reference investment universe. With such strong commitment, we are taking the lead in this movement across all our portfolios and we hope the rest of the investment industry will follow.
Have you already pulled money out of companies that don’t meet your criteria?
Yes, absolutely. Responsible investing was one of our founding pillars ten years ago, we’ve been doing it since the start. But in fact, we believe that pulling money out – or ‘divesting’ to use the technical term – is a last resort. We want to create long-term, structural change. Obviously, we have an exclusion policy that is systematically applied for some controversial activities, or for companies that have a business model that is too exposed to sectors that go against sustainability principles. But for the remainder, in general, we believe it is better to have a dialogue with company management to explain where they’re falling short and try to build a roadmap for the future. As Europe’s largest asset manager, it is also our responsibility to influence the strategies of companies, especially when we are among their main shareholders. We are also here to accompany them in their transition.
Introduction to ESG with Amundi
How to do good and well with your investments
Deep dive into ESG: Investing in a better tomorrow
A decade of ESG
Putting responsible investing into practice
The power and meaning of impact investing
THE BASICS
When lockdown started, parents everywhere suddenly found themselves stepping into the role of teacher and no doubt muttering a prayer of thanks for online learning tools.
Education is vital to all our futures. It’s the key to increasing social mobility and escaping poverty. But the system is far from perfect. According to the United Nations (UN), a staggering 258
million children were still out of school in 2018, nearly one fifth of the global population in that age group.[1] With the world’s population growing rapidly, there will be more and more children and adults in vital need of education to improve their life prospects.
Huge investment is needed to build the right tools and infrastructure, particularly in the developing world. And this is where anyone can put their savings to work, buying into areas with a positive development goal that also has huge growth potential.
The global e-learning industry alone which is only one strand of education infrastructure was worth $107bn in 2015 and is predicted to grow to $325bn by 2025, largely fuelled by the massive expansion of demand in Asia.[2]
Of course, education is only one of a number of vital challenges facing humanity as the planet’s population expands and the effects of climate change take hold. The United Nations has outlined 17 areas that all need to be addressed. Known as the Sustainable Development Goals (SDGs[3]), these form a framework for areas that can be targeted by investors looking to do some good while also putting their savings to work in areas of future growth.
Huge investment is needed to build the right tools and infrastructure, particularly in the developing world. And this is where anyone can put their savings to work, buying into areas with a positive development goal that also have huge growth potential.
THE BASICS
The power and meaning of impact investing
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 9 October 2020
Doc ID# 1357227
One fifth of the world’s children still have inadequate schooling- and this is just one of a number of challenges facing the world. The right investment vehicle can make a measureable impact on the problem- while also delivering growth.
THE BASICS
Deep dive into ESG:
Investing in a better tomorrow
Introduction to ESG with Amundi
Beyond education (goal four), goal six targets water availability and sanitation for all. Even before the Covid crisis, billions still lacked water and sanitation services: 2.2 billion people lacked safely managed drinking water, while 4.2 billion people lacked safely managed sanitation, according to the latest available figures.[4]
Goal two targets an end to hunger. Among many shocking statistics highlighted by the UN, 47 million children under five- 6.9% of those in the world- are affected by wasting through lack of nutrition.[5]
All of these are areas that can be improved through targeted investments, and Amundi operates a range of funds that aim to make a tangible difference, based on different SDGs.
Elodie Laugel, chief responsible investment officer at Amundi, says: ‘The SDGs provide shocking insights into the challenges we all face, and which we at Amundi feel must be addressed. They also give a valuable framework for investors who want to target specific issues with their savings. Several Amundi’s funds covers a number of SDGs- Education, Food and Water being just three examples. We aim to show investors a concrete impact from these funds, while also helping them to achieve their investment goals.’
Sources:
[1] UNESCO UIS Fact Sheet No. 56, September 2019.
[2] https://www.forbes.com/sites/tjmccue/2018/07/31/e-learning-climbing-to-325-billion-by-2025-uf-canvas-absorb-schoology-moodle/#1bbb8d5c3b39
[3] For more information see https://sdgs.un.org/goals
[4] https://www.un.org/sustainabledevelopment/wp-content/uploads/2016/08/2_Why-It-Matters-2020.pdf
[5] https://www.un.org/sustainabledevelopment/wp-content/uploads/2016/08/2_Why-It-Matters-2020.pdf
https://www.forbes.com/sites/tjmccue/2018/07/31/e-learning-climbing-to-325-billion-by-2025-uf-canvas-absorb-schoology-moodle/#1bbb8d5c3b39
Introduction to ESG with Amundi
Deep dive into ESG:
Investing in a better tomorrow
How to do good and well with your investments
A decade of ESG
THE BASICS
Putting responsible investing into practice
Putting responsible investing into practice
One fifth of the world’s children still have inadequate schooling- and this is just one of a number of challenges facing the world. The right investment vehicle can make a measureable impact on the problem- while also delivering growth.
THE BASICS
When lockdown started, parents everywhere suddenly found themselves stepping into the role of teacher and no doubt muttering a prayer of thanks for online learning tools.
Education is vital to all our futures. It’s the key to increasing social mobility and escaping poverty. But the system is far from perfect. According to the United Nations (UN), a staggering 258 million children were still out of school in 2018, nearly one fifth of the global population in that age group.[1] With the world’s population growing rapidly, there will be more and more children and adults in vital need of education to improve their life prospects.
Huge investment is needed to build the right tools and infrastructure, particularly in the developing world. And this is where anyone can put their savings to work, buying into areas with a positive development goal that also has huge growth potential.
The global e-learning industry alone which is only one strand of education infrastructure was worth $107bn in 2015 and is predicted to grow to $325bn by 2025, largely fuelled by the massive expansion of demand in Asia.[2]
Of course, education is only one of a number of vital challenges facing humanity as the planet’s population expands and the effects of climate change take hold. The United Nations has outlined 17 areas that all need to be addressed. Known as the Sustainable Development Goals (SDGs[3]), these form a framework for areas that can be targeted by investors looking to do some good while also putting their savings to work in areas of future growth.
Beyond education (goal four), goal six targets water availability and sanitation for all. Even before the Covid crisis, billions still lacked water and sanitation services: 2.2 billion people lacked safely managed drinking water, while 4.2 billion people lacked safely managed sanitation, according to the latest available figures.[4]
Goal two targets an end to hunger. Among many shocking statistics highlighted by the UN, 47 million children under five- 6.9% of those in the world- are affected by wasting through lack of nutrition.[5]
All of these are areas that can be improved through targeted investments, and Amundi operates a range of funds that aim to make a tangible difference, based on different SDGs.
Elodie Laugel, chief responsible investment officer at Amundi, says: ‘The SDGs provide shocking insights into the challenges we all face, and which we at Amundi feel must be addressed. They also give a valuable framework for investors who want to target specific issues with their savings. Several Amundi’s funds covers a number of SDGs- Education, Food and Water being just three examples. We aim to show investors a concrete impact from these funds, while also helping them to achieve their investment goals.’
Introduction to ESG with Amundi
How to do good and well with your investments
Deep dive into ESG: Investing in a better tomorrow
A decade of ESG
Putting responsible investing into practice
The power and meaning of impact investing
THE BASICS
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 September 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 9 October 2020
Doc ID# 1357095
Sources:
[1] https://www.carbonbrief.org/analysis-coronavirus-set-to-cause-largest-ever-annual-fall-in-co2-emissions
[2] Source IPE "Top 500 asset managers” published in June 2020 and based on AUM as of December 2019
[3] Amundi figures as of July 30, 2020
[4] https://www.theguardian.com/business/2020/may/14/unemployment-us-data-coronavirus
[5] For more information see https://sdgs.un.org/goals
[6] Amundi 2019 Engagement Report
Imagine walking around New Delhi and realising that you can see mountains on the horizon despite it being one of the most polluted cities in the world. Or maybe you find yourself in a Parisian suburb and see a deer crossing the road. How has this been possible?
With such a diminished impact of human activities on the environment during the pandemic, many urban and natural landscapes have revived and shown us how simple actions could benefit entire ecosystems and wildlife communities.
The emergency of climate change is not a new phenomenon but the pandemic has accelerated the attention to this and other problematic issues in our societies. As of April this year, annual warming gas emissions were anticipated to fall by 5.5% in 2020, according to Carbon Brief.[1] Still, this figure falls below expectations on what is really needed for the planet to breathe fresher air.
The tragic impacts of the crisis risk slowing down policies and public investments toward the climate cause as well as social issues. Even more than before the crisis, investors have a major role to play alongside governments in directing capital towards projects tackling climate and social issues.
For example, Amundi, the European leading asset manager[2] with €1.5tn[3] in assets globally, sees three possible scenarios on climate change actions following the crisis: a good, a bad and a ‘status quo’.
In the good scenario, governments and companies will step up their efforts on sustainability; in the bad one, the commitment to climate change will be surpassed by other issues leading to a worsening of emissions levels, while the status quo scenario would mean that only a limited number of companies would transition to more sustainable models.
Climate change won’t lose its top spot when it comes to responsible investing, but we believe the pandemic has elevated the debate and raised awareness of issues such as inequality within workers’ rights and supply chains. Therefore, investors are more engaged in their conversations with businesses to push for changes.
‘Not forgetting the climate aspect or even the biodiversity aspects because they are linked together, but I really think that the social pillar is going to become more important [following the pandemic],’ Caroline Le Meaux, head of ESG research, voting and engagement at Amundi says.
As of May, jobless claims in the US alone reached 36 million, as the pandemic hit hospitality, travel, and other sectors across the country[4]. Companies around the world have laid off staff as economies slumped and supply chains in many developed and developing countries have been dramatically damaged. This has led large investors to rethink workers’ rights and assess how companies need to work in the future to protect their stakeholders.
Engagement includes encouraging company-wide policies to guarantee a minimum base level of benefits and address inequalities across employees globally. For Amundi, the engagement on inequality includes access to medicine, access to healthy food, workers’ rights and living wages. These areas are directly in line with a number of Sustainable Development Goals[5] set by the United Nations of no poverty, zero hunger, good health and well-being and decent work and economic growth.
Issues like inequality and addressing the living wage might be different from country to country but they are global problems, Amundi says.
It is clear from our engagement this year that addressing living wage concerns is vastly unaddressed. Thus, we at Amundi encourage companies to develop comprehensive companywide policies to ensure a minimum base level of benefits for all employees globally to address inequalities and ensure every employee is treated with the same respect.
Not only climate change
Minimum wage is the amount set by a government, while living wage is determined by average cost of living in a specific country.
For example, in the US the minimum wage is $7.25 an hour but it has[6] not been linked to the consumer price index, otherwise it would be $10.15.
In no state can a minimum wage worker afford a ONE-BEDROOM rental home at the average Fair Market Rent, working a standard 40-hour work week, without paying more than 30% of their income.
Living wage VS minimum wage
2017 hours at minimum wage needed to afford rent
We encourage companies to develop comprehensive companywide policies to ensure a minimum base level of benefits for all employees globally to address inequalities and ensure every employee is treated with the same respect
Caroline Le Meaux,
head of ESG research, voting and engagement at Amundi
Why now – the world around us
From climate change to living wage:
What’s on responsible investors’ radar?
The power and meaning of impact investing
Why now – the world around us
Not only climate change
We encourage companies to develop comprehensive companywide policies to ensure a minimum base level of benefits for all employees globally to address inequalities and ensure every employee is treated with the same respect
Caroline Le Meaux,
head of ESG research, voting and engagement at Amundi
Minimum wage is the amount set by a government, while living wage is determined by average cost of living in a specific country.
For example, in the US the minimum wage is $7.25 an hour but it has[6] not been linked to the consumer price index, otherwise it would be $10.15.
Living wage VS minimum wage
In no state can a minimum wage worker afford a
ONE-BEDROOM rental home at the average Fair Market Rent, working a standard 40-hour work week, without paying more than 30% of their income.
2017 hours at minimum wage needed
to afford rent
Sources:
[1] https://www.carbonbrief.org/analysis-coronavirus-set-to-cause-largest-ever-annual-fall-in-co2-emissions
[2] Source IPE "Top 500 asset managers” published in June 2020 and based on AUM as of December 2019
[3] Amundi figures as of July 30, 2020
[4] https://www.theguardian.com/business/2020/may/14/unemployment-us-data-coronavirus
[5] For more information see https://sdgs.un.org/goals
[6] Amundi 2019 Engagement Report
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 September 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 9 October 2020
Doc ID# 1357095
Imagine walking around New Delhi and realising that you can see mountains on the horizon despite it being one of the most polluted cities in the world. Or maybe you find yourself in a Parisian suburb and see a deer crossing the road. How has this been possible?
With such a diminished impact of human activities on the environment during the pandemic, many urban and natural landscapes have revived and shown us how simple actions could benefit entire ecosystems and wildlife communities.
The emergency of climate change is not a new phenomenon but the pandemic has accelerated the attention to this and other problematic issues in our societies. As of April this year, annual warming gas emissions were anticipated to fall by 5.5% in 2020, according to Carbon Brief.[1] Still, this figure falls below expectations on what is really needed for the planet to breathe fresher air.
The tragic impacts of the crisis risk slowing down policies and public investments toward the climate cause as well as social issues. Even more than before the crisis, investors have a major role to play alongside governments in directing capital towards projects tackling climate and social issues.
For example, Amundi, the European leading asset manager[2] with €1.5tn[3] in assets globally, sees three possible scenarios on climate change actions following the crisis: a good, a bad and a ‘status quo’.
In the good scenario, governments and companies will step up their efforts on sustainability; in the bad one, the commitment to climate change will be surpassed by other issues leading to a worsening of emissions levels, while the status quo scenario would mean that only a limited number of companies would transition to more sustainable models.
Beyond education (goal four), goal six targets water availability and sanitation for all. Even before the Covid crisis, billions still lacked water and sanitation services: 2.2 billion people lacked safely managed drinking water, while 4.2 billion people lacked safely managed sanitation, according to the latest available figures.[4]
Goal two targets an end to hunger. Among many shocking statistics highlighted by the UN, 47 million children under five- 6.9% of those in the world- are affected by wasting through lack of nutrition.[5]
All of these are areas that can be improved through targeted investments, and Amundi operates a range of funds that aim to make a tangible difference, based on different SDGs.
Elodie Laugel, chief responsible investment officer at Amundi, says: ‘The SDGs provide shocking insights into the challenges we all face, and which we at Amundi feel must be addressed. They also give a valuable framework for investors who want to target specific issues with their savings. Several Amundi’s funds covers a number of SDGs- Education, Food and Water being just three examples. We aim to show investors a concrete impact from these funds, while also helping them to achieve their investment goals.’
Climate change won’t lose its top spot when it comes to responsible investing, but we believe the pandemic has elevated the debate and raised awareness of issues such as inequality within workers’ rights and supply chains. Therefore, investors are more engaged in their conversations with businesses to push for changes.
‘Not forgetting the climate aspect or even the biodiversity aspects because they are linked together, but I really think that the social pillar is going to become more important [following the pandemic],’ Caroline Le Meaux, head of ESG research, voting and engagement at Amundi says.
As of May, jobless claims in the US alone reached 36 million, as the pandemic hit hospitality, travel, and other sectors across the country[4]. Companies around the world have laid off staff as economies slumped and supply chains in many developed and developing countries have been dramatically damaged. This has led large investors to rethink workers’ rights and assess how companies need to work in the future to protect their stakeholders.
Engagement includes encouraging company-wide policies to guarantee a minimum base level of benefits and address inequalities across employees globally. For Amundi, the engagement on inequality includes access to medicine, access to healthy food, workers’ rights and living wages. These areas are directly in line with a number of Sustainable Development Goals[5] set by the United Nations of no poverty, zero hunger, good health and well-being and decent work and economic growth.
Issues like inequality and addressing the living wage might be different from country to country but they are global problems, Amundi says.
It is clear from our engagement this year that addressing living wage concerns is vastly unaddressed. Thus, we at Amundi encourage companies to develop comprehensive companywide policies to ensure a minimum base level of benefits for all employees globally to address inequalities and ensure every employee is treated with the same respect.
Why now - the world around us
What is ESG and why now?
From climate change to living wage:
What’s on responsible investors’ radar?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Responsible investing - can you make money and help the planet
What is ESG and why now?
From climate change to living wage: What’s on responsible investors’ radar?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Why now - the world around us
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 September 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 21 October 2020
Doc ID# 1375571
Sources:
World Inequality Database. Available from: https://wid.world/data/.
Notes: Estimates based on pre-tax national income, which is the sum of personal income flows from labour and capital before taxes and all transfers except pensions.
[1] https://www.oxfam.org/en/5-shocking-facts-about-extreme-global-inequality-and-how-even-it
[2] Amundi as at 30 September 2020
[3] UNDESA World Social Report 2020, https://www.un.org/development/desa/dspd/world-social-report/2020-2.html
https://www.oxfam.org/en/5-shocking-facts-about-extreme-global-inequality-and-how-even-it
[4] Or earlier/latest year available. The estimates cover only part of the full period in Argentina (1997-2004), Brazil (2001-2015), Colombia (1993-2010), Republic of Korea (1995-2015), Malaysia (1993-2012) and Thailand (2001-2015)
We have been running a dialogue with companies on the living wage over the past two years, to encourage them to develop comprehensive policies to ensure a minimum base level of benefits for all employees globally and ensure every employee is treated with the same respect
Jean-Jacques Barbéris,
Director of the Institutional and Corporate Clients division & ESG
• The world’s richest 1% have more than twice as much wealth as 6.9 billion people
• Almost half of humanity is living on less than $5.50 a day
• The super-rich avoid as much as 30% of their tax liability
Some stark facts [1]:
Since the 1980s, inequality has become more and more of a problem, growing to the extreme levels we can see today. The gap between rich and poor – and even the not-so-poor – is creating real social problems, and Covid-19 has only made this more evident.
Recent headlines have shown disproportionately high mortality levels among disadvantaged social groups, as well as huge unemployment numbers whose impact it is still too early to assess.
It is easy to feel powerless as an individual. But there are ways to tackle the issue by putting savings to work in a focused way.
A fund manager with vision and ethical values at its core can use its weight as a corporate shareholder to tackle the underlying root causes of inequality. Amundi, for example, sees fighting inequality as one of its main investment themes.
‘There are different approaches to ESG, but we wanted to take a focused attitude. We have set out clear priorities,’ says Jean-Jacques Barbéris, Director of the Institutional and Corporate Clients division & ESG at Amundi. ‘One is climate change and the environment, while the other is social inequality.’
He notes that the two are linked: ‘‘We know that a transition to a lower-carbon economy will have social impacts. Unless we also address the backdrop of inequality, there will be widespread discontent. The gilets jaunes (yellow vests) movement in France, which was sparked by rising fuel taxes enforced as part of a green initiative, is a good example – and it could be just the start,’ he says. ‘Inequality is a global phenomenon and its effects could be felt even more starkly in the developing world.’ [2]
The UN’s 2020 World Social Report [3] endorses this view, citing climate change as one of a number of megatrends – others include international migration, urbanisation, and technological innovation – that will make inequality worse in future unless they are addressed.
One of the most direct ways an asset manager can address the problem is to use its muscle as a shareholder. This can take different forms: most obvious is voting at company AGMs. But Amundi’s approach goes a lot further, Barbéris says.
‘Our voting policy places a strong emphasis on corporate responsibility and governance, but that is not the end of things for us,’ he says.
Amundi is pro-active in engaging with the management of companies it invests in – and even those it doesn’t. ‘We engage in a dialogue with companies where we feel there is room for improvement and try to steer them down the paths they need to take toward concrete action,’ he says.
‘For example, one of the first ways to address inequality is by ensuring that companies pay a living wage to their employees. But in a globalized world there are a lot of factors you need to grasp to truly understand the question – knowledge of supply chains and compliance with national and international labour standards, among others. It’s an area where Amundi’s sizeable resources and “early mover advantage” as a responsible investor are important,’ he says.
“We have been running a dialogue with companies on the living wage over the past two years, to encourage them to develop comprehensive policies to ensure a minimum base level of benefits for all employees globally and ensure every employee is treated with the same respect”.
Research and resources
Share of income earned by the top 1 per cent, 1990 and 2015 [4]
The ratio between the income of the richest and poorest 10 per cent of the global population is 25 per cent larger than it would be in a world without global warming
Why now – the world around us
Inequality:
The stark truth and how Amundi targets the root causes
From climate change to living wage: What’s on responsible investors’ radar?
Why now – the world around us
We have been running a dialogue with companies on the living wage over the past two years, to encourage them to develop comprehensive policies to ensure a minimum base level of benefits for all employees globally and ensure every employee is treated with the same respect
Jean-Jacques Barbéris,
Director of the Institutional and Corporate Clients division & ESG
Why now - the world around us
From climate change to living wage:
What’s on responsible investors’ radar?
What is ESG and why now?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Responsible investing - can you make money and help the planet
What is ESG and why now?
From climate change to living wage: What’s on responsible investors’ radar?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Why now - the world around us
Investors are worried and confused about the impact of Covid-19 on financial markets. As investors try to get used to a new normal, Caroline Le Meaux, head of ESG research, voting and engagement at Amundi expects environmental, social and governance (ESG) criteria to play an even more important role than before. ‘In a way, the pandemic has opened our eyes to things that really matter - people and the planet. Covid-19 comes as a wake-up call for all of us.’
She explains that the pandemic has accelerated the trend toward investments that take climate, society and company structures into account. Although Climate remains a key issue, investors and societies are becoming increasingly conscious of the importance of social matters: ‘Before the coronavirus outbreak, responsible investors mainly focused on companies that would tackle environmental and governance issues, for example carbon emissions and the lack of transparency about executive pay. But since the onset of the crisis, the social aspect has moved into the limelight.’
From her point of view, social inequalities weren’t as prominent on investors’ agenda as they are now. ‘Covid-19 has really shone a light on the challenging conditions a lot of people are working in. Just take a look at the appalling working situation in abattoirs, which aided the spread of the virus. This is not just a problem that’s confined to emerging markets but also exists in developed countries.’ she says.
‘Many firms have finally realised that they really need to look after their employees and customers,’ Le Meaux continues. ‘Companies that don’t give things like staff retention and customer loyalty the attention they deserve are going to pay the price. A change in attitude was long overdue.’
Now more than ever, investors want to make a difference, which is why they focus on allocating their capital to businesses that take ESG factors seriously. What does the company do to reduce its carbon footprint? How does it treat its workers? Does it actively encourage equality and diversity?
While this is not the first time investors have asked these questions, Covid-19 has given them a whole new level of urgency. ‘It’s not that we’ve never had a crisis before, but this time we might have reached a turning point that forces us to rethink the way we live, work and invest,’ Le Meaux says.
She points out that it comes down to one question: ‘Do I want my money to contribute to a better future, and if so how do I invest it in companies that actually tackle the most pressing challenges of our time?’
According to Le Meaux, it is asset managers like Amundi that can help people look for investments, which are in line with their goals - be it on the environmental, social or governance side of things: Identifying companies that develop sustainable models will become a priority for investors. “We are here to help them, through an efficient ESG analysis and a strong capacity of dialogue with companies, allowing us to have an in-depth knowledge of their strategy in the face of ESG challenges. This is even more the case if the situation on the financial markets is as hazy as it is right now. We are there to guide investors through the fog and make sure they achieve their financial and moral goals.”
It’s time to turn things around
Why now – the world around us
The next step:
What Covid-19 means for investors and ESG
Time is running out. Covid-19 has shown us how much things have already got out of hand.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 September 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 12 November 2020
Doc ID# 1410052
Inequality: The stark truth and how Amundi targets the root causes
Why now – the world around us
Investors are worried and confused about the impact of Covid-19 on financial markets. As investors try to get used to a new normal, Caroline Le Meaux, head of ESG research, voting and engagement at Amundi expects environmental, social and governance (ESG) criteria to play an even more important role than before. ‘In a way, the pandemic has opened our eyes to things that really matter - people and the planet. Covid-19 comes as a wake-up call for all of us.’
She explains that the pandemic has accelerated the trend toward investments that take climate, society and company structures into account. Although Climate remains a key issue, investors and societies are becoming increasingly conscious of the importance of social matters: ‘Before the coronavirus outbreak, responsible investors mainly focused on companies that would tackle environmental and governance issues, for example carbon emissions and the lack of transparency about executive pay. But since the onset of the crisis, the social aspect has moved into the limelight.’
From her point of view, social inequalities weren’t as prominent on investors’ agenda as they are now. ‘Covid-19 has really shone a light on the challenging conditions a lot of people are working in. Just take a look at the appalling working situation in abattoirs, which aided the spread of the virus. This is not just a problem that’s confined to emerging markets but also exists in developed countries.’ she says.
‘Many firms have finally realised that they really need to look after their employees and customers,’ Le Meaux continues. ‘Companies that don’t give things like staff retention and customer loyalty the attention they deserve are going to pay the price. A change in attitude was long overdue.’
Now more than ever, investors want to make a difference, which is why they focus on allocating their capital to businesses that take ESG factors seriously. What does the company do to reduce its carbon footprint? How does it treat its workers? Does it actively encourage equality and diversity?
While this is not the first time investors have asked these questions, Covid-19 has given them a whole new level of urgency. ‘It’s not that we’ve never had a crisis before, but this time we might have reached a turning point that forces us to rethink the way we live, work and invest,’ Le Meaux says.
She points out that it comes down to one question: ‘Do I want my money to contribute to a better future, and if so how do I invest it in companies that actually tackle the most pressing challenges of our time?’
According to Le Meaux, it is asset managers like Amundi that can help people look for investments, which are in line with their goals - be it on the environmental, social or governance side of things: Identifying companies that develop sustainable models will become a priority for investors. “We are here to help them, through an efficient ESG analysis and a strong capacity of dialogue with companies, allowing us to have an in-depth knowledge of their strategy in the face of ESG challenges. This is even more the case if the situation on the financial markets is as hazy as it is right now. We are there to guide investors through the fog and make sure they achieve their financial and moral goals.”
It’s time to turn things around
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 September 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 12 November 2020
Doc ID# 1410052
Why now - the world around us
From climate change to living wage:
What’s on responsible investors’ radar?
What is ESG and why now?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Responsible investing - can you make money and help the planet
What is ESG and why now?
From climate change to living wage: What’s on responsible investors’ radar?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Why now - the world around us
We believe success in ESG relies on rigorous research, going out and having in-depth conversations with company directors.
Caroline Le Meaux,
Amundi’s head of ESG research, voting and engagement
With more than 59 million jobs under threat in Europe [1] and sharp GDP drops across the region, one might expect corporate ethics to be low on investors’ priority lists right now.
In fact, nothing could be further from the truth. Investment funds chosen for their environmental, social and governance (ESG) credentials have actually done better than their ‘traditional’ counterparts since the world went into lockdown in March.
On one hand, investors have flocked towards ESG funds, rather than away from them. Amundi’s analysis of exchange-traded funds (those which are traded on the stock exchange) in the US shows that ‘green’ funds have grown by around 1.28%, a full 1% more than conventional rivals.[2]
But that’s not all: ESG funds have actually delivered greater returns than their counterparts, too. Even in March, when investors scrambled to sell their positions, sustainable funds withstood much of the damage. The MSCI World index, which monitors large and medium-sized equities around the developed world shed a whopping 14.5% of its value - but 62% of large-cap ESG funds outperformed the average. [3]
Research firm Morningstar, which analysed nearly 5,000 European funds between 2010 and 2019, found that 59% of sustainable funds which survived the period outperformed their traditional counterparts.[4] Between September 2011 and April 2020, the FTSE’s dedicated index of climate-conscious companies outperformed its main global index by 3.7%. [5]
Another key factor is that ESG funds, by their very nature, tend to underweight (that is, place less emphasis on) traditional industries such as oil, gas and real estate, whose future suddenly looks very murky.
Instead, they lean towards progressive areas, like technology and healthcare, which may thrive in the post-Covid world of remote working and social distancing (since the pandemic erupted, shares of Apple, Amazon, Facebook, Netflix and Microsoft have all reached record highs).
Of course, this is no guarantee of success. Within every industry, green or otherwise, there will be winners and losers in the new reality. But we believe that ESG, with its strict principles and rigorous, rules-based approach to stock selection, is well-equipped for the current uncertainty.
In our opinion, success in ESG relies on rigorous research, going out and having in-depth conversations with company directors. For this purpose, Amundi has built a team of 35 experts in ESG quantitative and qualitative analysis, Voting and shareholder dialogue, ESG development and advocacy.[6] These experts use a proprietary methodology, based on 37 criteria probing all aspects of a company’s underlying strategy.
Yes, ESG stock selection is a highly skilled, complex process, but it’s got discipline baked into its very core - and, at a time when inequality and malpractice have never been more prominent in the global media, it’s got zeitgeist on its side.
Cumulative flows into US-listed ETFs during the Covid-19 crisis (USD bn)
Why now – the world around us
ESG funds proved their mettle during coronavirus outbreak
Investors are flocking to ESG strategies
Source:
Bloomberg, authors' calculations. Cumulative flows are in USD bn. Conventional US listed ETFs flows are displayed on the right axis, ESG, E, healthcare and tech on the left.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 October 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 17 November 2020
Doc ID# 1415729
Sources:
[1] As of August 2020. Source: https://www.nytimes.com/2020/08/24/business/europe-economy-layoffs.html
[2] As of 18 May 2020. Source: https://research-center.amundi.com/page/Article/2020/05/The-day-after-3-ESG-Resilience-During-the-Covid-Crisis-Is-Green-the-New-Gold
[3] https://www.responsible-investor.com/articles/no-surprise-sustainability-funds-outperform-the-market-despite-covid-19
[4] https://www.morningstar.com/content/dam/marketing/emea/shared/guides/ESG_Fund_Performance_2020.pdf
[5] https://www.ftserussell.com/blogs/how-have-climate-indexes-fared-during-coronavirus-sell
[6] Amundi Asset Management as at 30 September 2020.
The next step:
What Covid-19 means for investors and ESG
Why now – the world around us
With more than 59 million jobs under threat in Europe [1] and sharp GDP drops across the region, one might expect corporate ethics to be low on investors’ priority lists right now.
In fact, nothing could be further from the truth. Investment funds chosen for their environmental, social and governance (ESG) credentials have actually done better than their ‘traditional’ counterparts since the world went into lockdown in March.
On one hand, investors have flocked towards ESG funds, rather than away from them. Amundi’s analysis of exchange-traded funds (those which are traded on the stock exchange) in the US shows that ‘green’ funds have grown by around 1.28%, a full 1% more than conventional rivals.[2]
Cumulative flows into US-listed ETFs during the Covid-19 crisis (USD bn)
Source:
Bloomberg, authors' calculations. Cumulative flows are in USD bn. Conventional US listed ETFs flows are displayed on the right axis, ESG, E, healthcare and tech on the left.
But that’s not all: ESG funds have actually delivered greater returns than their counterparts, too. Even in March, when investors scrambled to sell their positions, sustainable funds withstood much of the damage. The MSCI World index, which monitors large and medium-sized equities around the developed world shed a whopping 14.5% of its value - but 62% of large-cap ESG funds outperformed the average. [3]
Research firm Morningstar, which analysed nearly 5,000 European funds between 2010 and 2019, found that 59% of sustainable funds which survived the period outperformed their traditional counterparts.[4] Between September 2011 and April 2020, the FTSE’s dedicated index of climate-conscious companies outperformed its main global index by 3.7%. [5]
Another key factor is that ESG funds, by their very nature, tend to underweight (that is, place less emphasis on) traditional industries such as oil, gas and real estate, whose future suddenly looks very murky.
Instead, they lean towards progressive areas, like technology and healthcare, which may thrive in the post-Covid world of remote working and social distancing (since the pandemic erupted, shares of Apple, Amazon, Facebook, Netflix and Microsoft have all reached record highs).
Of course, this is no guarantee of success. Within every industry, green or otherwise, there will be winners and losers in the new reality. But we believe that ESG, with its strict principles and rigorous, rules-based approach to stock selection, is well-equipped for the current uncertainty.
In our opinion, success in ESG relies on rigorous research, going out and having in-depth conversations with company directors. For this purpose, Amundi has built a team of 35 experts in ESG quantitative and qualitative analysis, Voting and shareholder dialogue, ESG development and advocacy.[6] These experts use a proprietary methodology, based on 37 criteria probing all aspects of a company’s underlying strategy.
Yes, ESG stock selection is a highly skilled, complex process, but it’s got discipline baked into its very core - and, at a time when inequality and malpractice have never been more prominent in the global media, it’s got zeitgeist on its side.
We believe success in ESG relies on rigorous research, going out and having in-depth conversations with company directors.
Caroline Le Meaux,
Amundi’s head of ESG research,
voting and engagement
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 October 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 17 November 2020
Doc ID# 1415729
Sources:
[1] As of August 2020. Source: https://www.nytimes.com/2020/08/24/business/europe-economy-layoffs.html
[2] As of 18 May 2020. Source: https://research-center.amundi.com/page/Article/2020/05/The-day-after-3-ESG-Resilience-During-the-Covid-Crisis-Is-Green-the-New-Gold
[3] https://www.responsible-investor.com/articles/no-surprise-sustainability-funds-outperform-the-market-despite-covid-19
[4] https://www.morningstar.com/content/dam/marketing/emea/shared/guides/ESG_Fund
_Performance_2020.pdf
[5] https://www.ftserussell.com/blogs/how-have-climate-indexes-fared-during-coronavirus-sell
[6] Amundi Asset Management as at 30 September 2020.
Investors are flocking to ESG strategies
Why now - the world around us
From climate change to living wage:
What’s on responsible investors’ radar?
What is ESG and why now?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Responsible investing - can you make money and help the planet
What is ESG and why now?
From climate change to living wage: What’s on responsible investors’ radar?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Why now - the world around us
The Covid-19 crisis has moved social considerations back to the forefront of ESG
Jean-Jacques Barberis,
Head of the Institutional and Corporate Clients Division & ESG at Amundi
The basic aims of ESG investing are clear: to fight climate change and a range of other pressing environmental and social problems, while seeking the same or potentially better returns than might be found via traditional investing methods.
But there’s still a big question for many investors: ‘It sounds great in theory, but how do I put this into action?’ We spoke to Jean-Jacques Barberis, Head of the Institutional and Corporate Clients Division & ESG at Amundi, and asked him to take us through some practical steps.
First of all, I’d say: governments have to take the lead on these huge crises that affect the future of humanity. But once that’s understood, yes, we can all make a tangible difference – whether that’s as a citizen, worker or individual investor.
The science is clear: climate change is a reality, and the newspapers constantly highlight the effects of other social issues such as inequality. These are huge global problems. Can an individual investor really make a difference?
There are two options that might be a good starting point. First: if you’ve identified an issue you feel strongly about, climate change for example, you can invest in ways to finance solutions to the problem.
A good example is a green bond. These are debt instruments issued by a company or a government looking for cash to finance projects that help with energy transition. A very useful feature is that many are able to report directly on the impact they’re having – right down to the nearest tonne of carbon emission that’s been saved. It’s a very clear way to see the effects your investments are having.
A second option is to build a low-carbon portfolio. That means, to invest in funds that have the same financial profile as a traditional investment fund, but which select companies with a lower carbon footprint.
So, how can someone begin to invest in a more ESG-friendly way?
At Amundi, we are constantly seeking ways to help investors achieve these goals. And at the same time, we are always looking to further integrate a climate dimension into our portfolios. For example, a new initiative is our partnership with the CDP (former Carbon Disclosure Project) about a methodology of temperature scoring of companies. This will give us a way to see clearly how much the companies held in our funds contribute to global warming. You can think of it as a thermometer. This tool will be very useful to help build an investment portfolio that is aligned with the Paris Agreement target of limiting global warming to 1.5 degrees.
How do you go about doing that?
There are lots of areas ESG can target, and we emphasise two areas in particular: climate change, and social inequality. These two themes are bound up with each other. We believe that the transition to a lower carbon world will have profound effects on society. It’s not enough just to think about the environment, you also have to consider how the shift might create social unrest and amplify inequality, which is a huge problem around the world.
What other areas is Amundi targeting via ESG investing?
The figures are stark: there has been a massive increase in unemployment in most developed countries, with an increase in extreme poverty and social exclusion. We’ve all seen the footage of overstretched food banks in many countries. And historically, there is evidence that inequalities increased after pandemics.
What effect do you think the Covid-19 crisis will have on inequality?
Will things get worse?
We think inequality has to be addressed holistically and social impact funds, which aim to make a positive contribution to society while also generating attractive returns, are a great way to start. The approach of our social impact fund is based on five pillars: labour and income; health and education; diversity; taxation; and human rights/access to basic needs. We invest in companies that specifically address these areas.
How can investing try to address this?
I believe this was already a powerful wave before Covid-19, but it has now gathered even more momentum. Companies’ decisions affecting workers (in particular, the health and social protection of employees, telework or unemployment policies, as well as providing production chains to produce medical equipment) have become increasingly important. The Covid-19 crisis has moved social considerations back to the forefront of ESG.
Regarding labour and income, do you think the crisis has changed public perception of companies? Will people favour those companies that treat workers fairly, above those that don’t?
Impact of pandemics on inequality
Why now – the world around us
How to get started in ESG investing?
How the power of investing can affect and improve social and environmental issues?
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 October 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 19 November 2020
Doc ID# 1414230
Source:
VoxEU. Notes: The figures shows the impulse response (and 90% confidence bands) of the net Gini to a pandemic for five years after the evnt for 175 countries over the period 1961-2017. The baseline specification includes two lags of the dependent variable and current and two lags of the pandemic dummy variable. Gini coefficients are from the Standardized World Income Inequality Database. See Furceri et l. (2020) for details.
How to get started in ESG investing?
Why now – the world around us
The basic aims of ESG investing are clear: to fight climate change and a range of other pressing environmental and social problems, while seeking the same or potentially better returns than might be found via traditional investing methods.
But there’s still a big question for many investors: ‘It sounds great in theory, but how do I put this into action?’ We spoke to Jean-Jacques Barberis, Head of the Institutional and Corporate Clients Division & ESG at Amundi, and asked him to take us through some practical steps.
How the power of investing can affect and improve social and environmental issues?
The science is clear: climate change is a reality, and the newspapers constantly highlight the effects of other social issues such as inequality. These are huge global problems. Can an individual investor really make a difference?
First of all, I’d say: governments have to take the lead on these huge crises that affect the future of humanity. But once that’s understood, yes, we can all make a tangible difference – whether that’s as a citizen, worker or individual investor.
So, how can someone begin to invest in a more ESG-friendly way?
There are two options that might be a good starting point. First: if you’ve identified an issue you feel strongly about, climate change for example, you can invest in ways to finance solutions to the problem.
A good example is a green bond. These are debt instruments issued by a company or a government looking for cash to finance projects that help with energy transition. A very useful feature is that many are able to report directly on the impact they’re having – right down to the nearest tonne of carbon emission that’s been saved. It’s a very clear way to see the effects your investments are having.
A second option is to build a low-carbon portfolio. That means, to invest in funds that have the same financial profile as a traditional investment fund, but which select companies with a lower carbon footprint.
How do you go about doing that?
At Amundi, we are constantly seeking ways to help investors achieve these goals. And at the same time, we are always looking to further integrate a climate dimension into our portfolios. For example, a new initiative is our partnership with the CDP (former Carbon Disclosure Project) about a methodology of temperature scoring of companies. This will give us a way to see clearly how much the companies held in our funds contribute to global warming. You can think of it as a thermometer. This tool will be very useful to help build an investment portfolio that is aligned with the Paris Agreement target of limiting global warming to 1.5 degrees.
Impact of pandemics on inequality
Source:
VoxEU. Notes: The figures shows the impulse response (and 90% confidence bands) of the net Gini to a pandemic for five years after the evnt for 175 countries over the period 1961-2017. The baseline specification includes two lags of the dependent variable and current and two lags of the pandemic dummy variable. Gini coefficients are from the Standardized World Income Inequality Database. See Furceri et l. (2020) for details.
What other areas is Amundi targeting via ESG investing?
There are lots of areas ESG can target, and we emphasise two areas in particular: climate change, and social inequality. These two themes are bound up with each other. We believe that the transition to a lower carbon world will have profound effects on society. It’s not enough just to think about the environment, you also have to consider how the shift might create social unrest and amplify inequality, which is a huge problem around the world.
What effect do you think the Covid-19 crisis will have on inequality? Will things get worse?
The figures are stark: there has been a massive increase in unemployment in most developed countries, with an increase in extreme poverty and social exclusion. We’ve all seen the footage of overstretched food banks in many countries. And historically, there is evidence that inequalities increased after pandemics.
How can investing try to address this?
We think inequality has to be addressed holistically and social impact funds, which aim to make a positive contribution to society while also generating attractive returns, are a great way to start. The approach of our social impact fund is based on five pillars: labour and income; health and education; diversity; taxation; and human rights/access to basic needs. We invest in companies that specifically address these areas.
Regarding labour and income, do you think the crisis has changed public perception of companies? Will people favour those companies that treat workers fairly, above those that don’t?
I believe this was already a powerful wave before Covid-19, but it has now gathered even more momentum. Companies’ decisions affecting workers (in particular, the health and social protection of employees, telework or unemployment policies, as well as providing production chains to produce medical equipment) have become increasingly important. The Covid-19 crisis has moved social considerations back to the forefront of ESG.
The Covid-19 crisis has moved social considerations back to the forefront of ESG
Jean-Jacques Barberis,
Head of the Institutional and Corporate Clients Division & ESG at Amundi
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 October 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 19 November 2020
Doc ID# 1414230
Why now - the world around us
From climate change to living wage:
What’s on responsible investors’ radar?
What is ESG and why now?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
How to get started in ESG investing?
Responsible investing - can you make money and help the planet
What is ESG and why now?
From climate change to living wage: What’s on responsible investors’ radar?
Inequality:
The stark truth and how Amundi targets the root causes
The next step:
What Covid-19 means for investors and ESG
ESG funds proved their mettle during coronavirus outbreak
Why now - the world around us
How to get started in ESG investing?
What to invest in - and why?
With so many ESG funds to choose from, it has never been more important to do one’s homework as an investor.
The vast majority of asset managers who aim to comply with and improve environmental, social and governance (ESG) standards go to great lengths to ensure that the companies they invest in live up to their promises.
According to Greenpeace, corporations are ‘falling all over themselves to demonstrate that they are environmentally conscious’. The group says: ‘The average citizen is finding it more and more difficult to tell the difference between those companies genuinely dedicated to making a difference and those that are using a green curtain to conceal dark motives’.
Investors who want to put their money where their morals are face the same problem. The question is, how can investors find their way among this plethora of products offering different ‘shades of green’?
We try to be as transparent as possible about the offering we have by explaining what it is we’re targeting
Isabelle Vic-Philippe,
Amundi
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 31 January 2021
Doc ID# 1501793
The vast majority of asset managers who aim to comply with and improve environmental, social and governance (ESG) standards go to great lengths to ensure that the companies they invest in live up to their promises.
According to Greenpeace, corporations are ‘falling all over themselves to demonstrate that they are environmentally conscious’. The group says: ‘The average citizen is finding it more and more difficult to tell the difference between those companies genuinely dedicated to making a difference and those that are using a green curtain to conceal dark motives’.
Investors who want to put their money where their morals are face the same problem. The question is, how can investors find their way among this plethora of products offering different ‘shades of green’?
Anyone thinking about allocating money to ESG funds needs to do two things above all. First, read the prospectus to understand the fund’s risks, fees and objectives. It’s about going through the information carefully, digesting it and highlighting the parts that are confusing or difficult to understand. The second step is getting in touch with the fund provider.
Investors are careful to ensure their savings are used for the purposes they want them to be used for. Amundi stands wholeheartedly behind this principle and strives to give the best possible experience to investors who entrust the company with their money.
To do so, the European leader relies on in-house research capabilities, based on information from different ESG data providers and in dialogue with companies, to provide a deep understanding of a company’s ESG capabilities and strategy.
Proprietary research is vital when it comes to responsible investing; it’s not enough to rely on the pre-chewed information from data providers. Amundi’s ESG analysts apply a methodology based on 37 criteria to analyse companies on E, S and G issues, with regard to international norms and sustainable development challenges. Additionally, Amundi is in a constant dialogue with the companies it invests in to add to an additional layer of oversight.
Isabelle Vic-Philippe, Head of Euro Aggregate fund management at Amundi, says that transparency on the part of the fund provider is key. ‘At Amundi, we try to be as transparent as possible about the offering we have by explaining what it is we’re targeting. Take our range of thematic ESG funds as an example: they focus on a specific objective and are therefore suitable for individual investors who have a specific concern in mind.’
What to invest in - and why?
Do ESG funds fulfil their promises?
With so many ESG funds to choose from, it has never been more important to do one’s homework as an investor.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 31 January 2021
Doc ID# 1501793
Separating the wheat from the chaff
We try to be as transparent as possible about the offering we have by explaining what it is we’re targeting
Isabelle Vic-Philippe,
Amundi
Separating the wheat from the chaff
Anyone thinking about allocating money to ESG funds needs to do two things above all. First, read the prospectus to understand the fund’s risks, fees and objectives. It’s about going through the information carefully, digesting it and highlighting the parts that are confusing or difficult to understand. The second step is getting in touch with the fund provider.
Isabelle Vic-Philippe, Head of Euro Aggregate fund management at Amundi, says that transparency on the part of the fund provider is key. ‘At Amundi, we try to be as transparent as possible about the offering we have by explaining what it is we’re targeting. Take our range of thematic ESG funds as an example: they focus on a specific objective and are therefore suitable for individual investors who have a specific concern in mind.’
Investors are careful to ensure their savings are used for the purposes they want them to be used for. Amundi stands wholeheartedly behind this principle and strives to give the best possible experience to investors who entrust the company with their money.
To do so, the European leader relies on in-house research capabilities, based on information from different ESG data providers and in dialogue with companies, to provide a deep understanding of a company’s ESG capabilities and strategy.
Proprietary research is vital when it comes to responsible investing; it’s not enough to rely on the pre-chewed information from data providers. Amundi’s ESG analysts apply a methodology based on 37 criteria to analyse companies on E, S and G issues, with regard to international norms and sustainable development challenges. Additionally, Amundi is in a constant dialogue with the companies it invests in to add to an additional layer of oversight.
The road to 100% ESG
Do ESG funds fulfil their promises?
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
What to invest in - and why?
Investing responsibly is more than just a style
Invest in a better future
How investors can address the global food challenge
Taking steps towards a brighter future
ESG Investing in turbulent times
We conceive our role not only as a manager in an existing universe but as an enabler to the development of innovative financial solutions to multiply the means to act for more responsible markets
Elodie Laugel
Amundi
This year has been defined by the Covid-19 emergency, but it also marks entry into the final decade humanity has to change its ways before it wreaks irreparable damage on the planet, leading to even greater tragedy and widespread suffering.
In 2018, the world’s leading climate experts drew a line in the sand, warning that if massive steps were not taken to limit global warming to a 1.5ºC increase by 2030, the effects would be catastrophic. [1] Drought, flooding, food insecurity and poverty would become a far more likely scenario for millions of people.
But to hit that 1.5º target, the task ahead is huge. There needs to be a mass transition to cleaner energy and greener, more resilient infrastructure across the world. This will require vast investment: the World Bank estimates around $90tn (£71tn) must be spent by 2030. [2] And this is where even one person’s savings can make a tangible difference.
To build cleaner energy and infrastructure facilities, governments, companies and non-governmental organisations (such as the World Bank) need cash. One way to raise this is by issuing a green bond. This is a debt instrument – in very simple terms, an IOU – promising to pay back, with interest, money borrowed, while at the same time pledging to use the money for a clearly defined goal that has positive environmental benefits.
Examples may include renewable energy, clean public transportation, or greener waste management. The end goal must be in line with a carefully constructed framework to ensure suitability – a bit like a FairTrade label. Bodies that have issued green bonds so far include the State of Massachusetts, the City of Gothenburg in Sweden, and the Société du Grand Paris. The latter is an entity owned by the French state that is building infrastructure for the Grand Paris Express transport network, the largest urban infrastructure project in Europe.
Green bonds can be very attractive to savers because of their targeted goals, and the fact that many can report directly on how many tonnes of CO2 have been saved via their projects.
Elodie Laugel, chief responsible investment officer at Amundi, explains that the French asset manager has been at the forefront of developing the market for green bonds. ‘We conceive our role not only as a manager in an existing universe but as an enabler to the development of innovative financial solutions to multiply the means to act for more responsible markets,’ she notes.
In 2017 Amundi partnered with International Finance Corporation (IFC), part of the World Bank and one of the pioneers in bringing green bonds to prominence, together launching the world’s largest green bond fund. ‘The IFC has been a leader in stimulating the system to issue green bonds – the “supply” side – while we have been a leader in stimulating demand among investors,’ Laugel says. ‘This type of innovation is critical in order to push investment frontiers and extend
the responsible investing world as much as possible.’
But the challenge is only beginning. Developing markets' green bond activity remains relatively small compared to their potential looking at their investments in green infrastructures such as renewable energies and low-carbon public transportation. ‘In 2019 green bond issuance in emerging markets rose 21% to $52bn. But transitioning to low carbon economies requires global investment on an unprecedented scale. To give an idea, it is estimated that $29.4tn of funding will be needed in emerging market cities between now and the end of 2030.’
‘As Europe’s largest asset manager, we are taking the lead in trying to help savers understand the challenge, and put their money to work in a way they can see having a direct effect on climate change.’
What to invest in - and why?
Green Bonds:
How to see your savings at work fighting climate change
Could investing in eco-friendly debt be the key to funding vital work in the battle to save the planet from global warming?
Sources:
[1] https://www.worldbank.org/en/topic/climatefinance
[2] https://www.worldbank.org/en/topic/climatefinance
https://www.worldbank.org/en/topic/climatefinance
https://int.media.amundi.com/news/emerging-market-green-bond-issuance-hits-52-billion-in-2019-and-can-help-weather-shocks-amundi-and-the-ifc-reveal-in-new-report-1769-b6afb.html
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 January 2021
Doc ID# 1453790
How to get started in ESG investing?
What to invest in - and why?
Could investing in eco-friendly debt be the key to funding vital work in the battle to save the planet from global warming?
This year has been defined by the Covid-19 emergency, but it also marks entry into the final decade humanity has to change its ways before it wreaks irreparable damage on the planet, leading to even greater tragedy and widespread suffering.
In 2018, the world’s leading climate experts drew a line in the sand, warning that if massive steps were not taken to limit global warming to a 1.5ºC increase by 2030, the effects would be catastrophic. [1] Drought, flooding, food insecurity and poverty would become a far more likely scenario for millions of people.
But to hit that 1.5º target, the task ahead is huge. There needs to be a mass transition to cleaner energy and greener, more resilient infrastructure across the world. This will require vast investment: the World Bank estimates around $90tn (£71tn) must be spent by 2030. [2] And this is where even one person’s savings can make a tangible difference.
To build cleaner energy and infrastructure facilities, governments, companies and non-governmental organisations (such as the World Bank) need cash. One way to raise this is by issuing a green bond. This is a debt instrument – in very simple terms, an IOU – promising to pay back, with interest, money borrowed, while at the same time pledging to use the money for a clearly defined goal that has positive environmental benefits.
Examples may include renewable energy, clean public transportation, or greener waste management. The end goal must be in line with a carefully constructed framework to ensure suitability – a bit like a FairTrade label. Bodies that have issued green bonds so far include the State of Massachusetts, the City of Gothenburg in Sweden, and the Société du Grand Paris. The latter is an entity owned by the French state that is building infrastructure for the Grand Paris Express transport network, the largest urban infrastructure project in Europe.
We conceive our role not only as a manager in an existing universe but as an enabler to the development of innovative financial solutions to multiply the means to act for more responsible markets
Elodie Laugel,
Amundi
Green bonds can be very attractive to savers because of their targeted goals, and the fact that many can report directly on how many tonnes of CO2 have been saved via their projects.
Elodie Laugel, chief responsible investment officer at Amundi, explains that the French asset manager has been at the forefront of developing the market for green bonds. ‘We conceive our role not only as a manager in an existing universe but as an enabler to the development of innovative financial solutions to multiply the means to act for more responsible markets,’ she notes.
In 2017 Amundi partnered with International Finance Corporation (IFC), part of the World Bank and one of the pioneers in bringing green bonds to prominence, together launching the world’s largest green bond fund. ‘The IFC has been a leader in stimulating the system to issue green bonds – the “supply” side – while we have been a leader in stimulating demand among investors,’ Laugel says. ‘This type of innovation is critical in order to push investment frontiers and extend the responsible investing world as much as possible.’
But the challenge is only beginning. Developing markets' green bond activity remains relatively small compared to their potential looking at their investments in green infrastructures such as renewable energies and low-carbon public transportation. ‘In 2019 green bond issuance in emerging markets rose 21% to $52bn. But transitioning to low carbon economies requires global investment on an unprecedented scale. To give an idea, it is estimated that $29.4tn of funding will be needed in emerging market cities between now and the end of 2030.’
‘As Europe’s largest asset manager, we are taking the lead in trying to help savers understand the challenge, and put their money to work in a way they can see having a direct effect on climate change.’
Sources:
[1] https://www.worldbank.org/en/topic/climatefinance
[2] https://www.worldbank.org/en/topic/climatefinance
https://www.worldbank.org/en/topic/climatefinance
https://int.media.amundi.com/news/emerging-market-green-bond-issuance-hits-52-billion-in-2019-and-can-help-weather-shocks-amundi-and-the-ifc-reveal-in-new-report-1769-b6afb.html
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 January 2021
Doc ID# 1453790
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
ESG Investing in turbulent times
Taking steps towards a brighter future
What to invest in - and why?
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
Taking steps towards a brighter future
What to invest in - and why?
To make a difference, you cannot just exclude [companies], because if you exclude, you give up the ability to influence the company’s behaviour in the future
Vincent Mortier
group deputy CIO at Amundi
One of the most typical strategies of responsible investing is to simply avoid companies that are not harming the environment or society.
Some stocks are generally excluded from portfolios, such as controversial weapons or more recently tobacco, but exclusions alone do not bring a significant impact on the world.
Sometimes, companies with a low sustainable rating might have more room for growth and improvement in the long term so it’s important for investors to remain diversified and consider each company and approach individually.
For example, some oil or fossil fuel polluters have stepped up their games and are now making big advances in the renewable space.
Some of the largest and profitable energy firms, such as BP are showing improvement in their sustainability efforts, such as reducing their CO2 emissions and showing their progress towards a lower carbon footprint in a more transparent way.
This is one of the reasons why some investors, like Amundi, are against excluding or divesting from some companies with historically poor ESG performance. Amundi is part of an approach to support, not exclude, these companies, in order to encourage them to improve and change their practices.
‘The objectives are that the biggest number of companies are changing their business models in order to make the climate a place where we can move on. They have the incentives to adapt. We believe in this best-in-class approach for investment, combined with an ongoing dialogue and engagement with issuers,’ says Elodie Laugel, chief responsible investment officer at Amundi.
So, to what extent should investors focus on exclusion when it comes to responsible investing?
Exclusion remains a powerful sanction, but is not without its drawbacks. ‘To make a difference, you cannot just exclude [companies], because if you exclude, you give up the ability to influence the company’s behaviour in the future you don’t engage,’ says Vincent Mortier, group deputy CIO at Amundi.
This means that Amundi will underweight a certain firm it considers as a laggard, but it will still engage with it to trigger change.
A best in class approach is also necessary to ensure proper portfolio diversification [1], added Mortier.
In fact, responsible investing and environmental, social and governance (ESG) has become one of the best signals for determining stocks and their value.
As more people became interested in responsible investing, they have tended to focus on the best ESG stocks (such as those linked to climate change), which has increased their appeal. Outperformance has also depended on trends or certain factors being addressed properly, but overall it is proven that companies doing their homework on their responsibilities on the environment, society and governance perform better than those who do not, Amundi explains.
‘Prior to 2014, there was no clear outperformance from ESG investing. A break happened in 2014, with growing investor mobilization across equity and debt markets: ESG investing became a source of outperformance since 2014 in Europe and North America,’ Mortier says.
Amundi excludes companies involved in anti-personnel mines, cluster munitions, as well as chemical and biological weapons. In addition, Amundi implements specific and targeted sectoral exclusion policies for coal and tobacco in its active funds (see graph).
Anti-personnel mines
Cluster munitions
Chemical weapons
Biological weapons
Depleted uranium weapons
Companies developing or planning to develop new thermal coal capacities along the entire value chain (mining, production, utilities, and transport infrastructures)
Companies generating >25% of their revenue from thermal coal mining extraction,
Companies with annual thermal coal extraction of 100 MT or more without intention to reduce
All companies with revenue in thermal coal mining extraction and thermal coal power generation >50% of their revenue without analysis
All coal power generation & coal mining extraction companies with a threshold between 25% and 50% with a deteriorated energy transition score
Exclusions rules: Companies that manufacture complete tobacco products (thresholds for application: revenues
above 5%).
Cap rules: are capped to E as ESG rating (ranging from A to G), companies involved in the production, the supply and retailing of tobacco (thresholds for application: revenues above 10%).
What to invest in - and why?
‘Bad’ stocks:
Is excluding companies the
only way forward?
Excluding sin stocks from your portfolio could lead to investors missing out on engagement and the chance to make a bigger change
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 10 January 2021
Doc ID# 1468202
* Exclusion policy as of 31st December, 2020.
Sources:
[1] Diversification does not guarantee a profit or protect against a loss
Controversial weapons
Coal
Tobacco
Amundi excludes*
Green Bonds: How to see your savings at work fighting climate change
What to invest in - and why?
Excluding sin stocks from your portfolio could lead to investors missing out on engagement and the chance to make a bigger change
This means that Amundi will underweight a certain firm it considers as a laggard, but it will still engage with it to trigger change.
A best in class approach is also necessary to ensure proper portfolio diversification [1], added Mortier.
In fact, responsible investing and environmental, social and governance (ESG) has become one of the best signals for determining stocks and their value.
As more people became interested in responsible investing, they have tended to focus on the best ESG stocks (such as those linked to climate change), which has increased their appeal. Outperformance has also depended on trends or certain factors being addressed properly, but overall it is proven that companies doing their homework on their responsibilities on the environment, society and governance perform better than those who do not, Amundi explains.
‘Prior to 2014, there was no clear outperformance from ESG investing. A break happened in 2014, with growing investor mobilization across equity and debt markets: ESG investing became a source of outperformance since 2014 in Europe and North America,’ Mortier says.
Amundi excludes companies involved in anti-personnel mines, cluster munitions, as well as chemical and biological weapons. In addition, Amundi implements specific and targeted sectoral exclusion policies for coal and tobacco in its active funds (see graph).
To make a difference, you cannot just exclude [companies], because if you exclude, you give up the ability to influence the company’s behaviour in the future
Vincent Mortier,
group deputy CIO at Amundi
Controversial weapons
Coal
Tobacco
Amundi excludes*
Anti-personnel mines
Cluster munitions
Chemical weapons
Biological weapons
Depleted uranium weapons
Companies developing or planning to develop new thermal coal capacities along the entire value chain (mining, production, utilities, and transport infrastructures)
Companies generating >25% of their revenue from thermal coal mining extraction,
Companies with annual thermal coal extraction of 100 MT or more without intention to reduce
All companies with revenue in thermal coal mining extraction and thermal coal power generation >50% of their revenue without analysis
All coal power generation & coal mining extraction companies with a threshold between 25% and 50% with a deteriorated energy transition score
Exclusions rules: Companies that manufacture complete tobacco products (thresholds for application: revenues
above 5%).
Cap rules: are capped to E as ESG rating (ranging from A to G), companies involved in the production, the supply and retailing of tobacco (thresholds for application: revenues above 10%).
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 10 January 2021
Doc ID# 1468202
* Exclusion policy as of 31st December, 2020.
Sources:
[1] Diversification does not guarantee a profit or protect against a loss
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
ESG Investing in turbulent times
Taking steps towards a brighter future
What to invest in - and why?
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
Taking steps towards a brighter future
What to invest in - and why?
One of the most typical strategies of responsible investing is to simply avoid companies that are not harming the environment or society.
Some stocks are generally excluded from portfolios, such as controversial weapons or more recently tobacco, but exclusions alone do not bring a significant impact on the world.
Sometimes, companies with a low sustainable rating might have more room for growth and improvement in the long term so it’s important for investors to remain diversified and consider each company and approach individually.
For example, some oil or fossil fuel polluters have stepped up their games and are now making big advances in the renewable space.
Some of the largest and profitable energy firms, such as BP are showing improvement in their sustainability efforts, such as reducing their CO2 emissions and showing their progress towards a lower carbon footprint in a more transparent way.
This is one of the reasons why some investors, like Amundi, are against excluding or divesting from some companies with historically poor ESG performance. Amundi is part of an approach to support, not exclude, these companies, in order to encourage them to improve and change their practices.
‘The objectives are that the biggest number of companies are changing their business models in order to make the climate a place where we can move on. They have the incentives to adapt. We believe in this best-in-class approach for investment, combined with an ongoing dialogue and engagement with issuers,’ says Elodie Laugel, chief responsible investment officer at Amundi.
So, to what extent should investors focus on exclusion when it comes to responsible investing?
Exclusion remains a powerful sanction, but is not without its drawbacks. ‘To make a difference, you cannot just exclude [companies], because if you exclude, you give up the ability to influence the company’s behaviour in the future you don’t engage,’ says Vincent Mortier, group deputy CIO at Amundi.
Sources:
[1] https://www.un.org/development/desa/en/news/population/world-population-prospects-2019.html
[2] https://www.wri.org/our-work/topics/food
[3] https://www.unep.org/resources/report/unep-food-waste-index-report-2021
[4] CPR Asset Management as at 31 January 2021.
Finding a way to provide enough food for everyone without causing more harm to the environment than we already do poses one of the biggest challenges of our time, especially in light of the rapidly growing world population.
By 2050, the food industry will have to feed 9.7 billion people [1], who will likely consume not only more but also better food. Food demand is particularly strong in developing countries where consumption not only follows but exceeds population growth.
To provide enough food for every single person on this planet in 30 years’ time, food production will have to increase by 56%, according to the World Resources Institute.[2] That’s a staggering amount, even if you take the rising efficiency of agriculture methods and farming practices into account.
However, ‘just’ producing more food isn’t enough – we also need to cut back the amount of food we throw away. According to a UN report,[3] almost one billion tonnes of food are wasted every single year, with a considerable amount of it going back to improper storage.
Companies that are able to improve the shelf life of fruits and vegetables, for example by modifying specific genes, have the potential to revolutionise the food industry. But biotechnology is only one part of the equation. Shorter supply chains, better demand predictions and a general shift in attitude toward food waste are equally important.
Amundi, one of Europe’s largest asset managers, has set its sights on making the world a better place by throwing its weight behind the fight against food waste, which it also considers to be a fight against inequality. The French group has been a strong advocate of environmental preservation and social justice since its founding days.
Globally, we produce 3.9 billion tonnes of food a year.
And throw away a third of it. Every single year.
That’s why Amundi provides investment solutions that allow everyone to align their investment goals with non-financial objectives. Amundi’s fully-owned subsidiary CPR invests in companies that are able to ensure sufficient and sustainable food production and provision.
‘Through our sustainable approach, we endeavour to support the developments needed to allow companies throughout the food value chain to provide food in sufficient quantity and quality, while always respecting the planet and human rights,’ CPR notes.
Through Food for Generation strategy, for instance, CPR aims to get exposure to the multiple growth drivers throughout the global food value chain. Based on its sustainable approach, the fund offers an investment solution that tackles the challenge of feeding the world population while also preserving resources.
It’s time for investors to join the fight against the global food crisis. Asset managers like Amundi are leading the way.
‘We give a special importance to topics that affect everyone: living wage, child labour, access to nutrition and the fight against food waste,’ the firm states. ‘Inequality is an obstacle to economic growth, it reduces social, economic and institutional resilience to shocks, and it is a good measure of socio-political instability that can end up also affecting the financial system.’[4]
What to invest in - and why?
How investors can address the global food challenge
Research suggests that the world could be on the cusp of a food crisis. Here’s how engagement could be the answer
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 March 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 18 March 2021
Doc ID# 1568812
We give a special importance to topics that affect everyone: living wage, child labour, access to nutrition and the fight against food waste
CPR
‘Bad’ stocks: Is excluding companies the only way forward?
What to invest in - and why?
Research suggests that the world could be on the cusp of a food crisis. Here’s how engagement could be the answer
Finding a way to provide enough food for everyone without causing more harm to the environment than we already do poses one of the biggest challenges of our time, especially in light of the rapidly growing world population.
By 2050, the food industry will have to feed 9.7 billion people [1], who will likely consume not only more but also better food. Food demand is particularly strong in developing countries where consumption not only follows but exceeds population growth.
To provide enough food for every single person on this planet in 30 years’ time, food production will have to increase by 56%, according to the World Resources Institute.[2] That’s a staggering amount, even if you take the rising efficiency of agriculture methods and farming practices into account.
However, ‘just’ producing more food isn’t enough – we also need to cut back the amount of food we throw away. According to a UN report,[3] almost one billion tonnes of food are wasted every single year, with a considerable amount of it going back to improper storage.
Companies that are able to improve the shelf life of fruits and vegetables, for example by modifying specific genes, have the potential to revolutionise the food industry. But biotechnology is only one part of the equation. Shorter supply chains, better demand predictions and a general shift in attitude toward food waste are equally important.
Amundi, one of Europe’s largest asset managers, has set its sights on making the world a better place by throwing its weight behind the fight against food waste, which it also considers to be a fight against inequality. The French group has been a strong advocate of environmental preservation and social justice since its founding days.
We give a special importance to topics that affect everyone: living wage, child labour, access to nutrition and the fight against food waste
CPR
Globally, we produce 3.9 billion tonnes of food a year.
And throw away a third of it. Every single year.
‘We give a special importance to topics that affect everyone: living wage, child labour, access to nutrition and the fight against food waste,’ the firm states. ‘Inequality is an obstacle to economic growth, it reduces social, economic and institutional resilience to shocks, and it is a good measure of socio-political instability that can end up also affecting the financial system.’[4]
That’s why Amundi provides investment solutions that allow everyone to align their investment goals with non-financial objectives. Amundi’s fully-owned subsidiary CPR invests in companies that are able to ensure sufficient and sustainable food production and provision.
‘Through our sustainable approach, we endeavour to support the developments needed to allow companies throughout the food value chain to provide food in sufficient quantity and quality, while always respecting the planet and human rights,’ CPR notes.
Through Food for Generation strategy, for instance, CPR aims to get exposure to the multiple growth drivers throughout the global food value chain. Based on its sustainable approach, the fund offers an investment solution that tackles the challenge of feeding the world population while also preserving resources.
It’s time for investors to join the fight against the global food crisis. Asset managers like Amundi are leading
the way.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 1 March 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 18 March 2021
Doc ID# 1568812
Sources:
[1] https://www.un.org/development/desa/en/news/population/world-population-prospects-2019.html
[2] https://www.wri.org/our-work/topics/food
[3] https://www.unep.org/resources/report/unep-food-waste-index-report-2021
[4] CPR Asset Management as at 31 January 2021.
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
ESG Investing in turbulent times
Taking steps towards a brighter future
What to invest in - and why?
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
Taking steps towards a brighter future
What to invest in - and why?
how investing with the right partner can help to shape a better world
Did you know that food is the biggest form of everyday waste in our rubbish?
For example, using up what’s near to the expiry date, or if you make too much store some for the next day?
It seems a small thing, but it’s helping to address a massive problem…
Do you try not to waste food in your home?
And uses the planet’s precious freshwater resources
It creates huge methane emissions from landfill
This contributes to the problem of world hunger
Globally, food waste consumes 21% of all fresh water. [2]
21%
Globally, food loss and waste have a combined carbon footprint of
[2]
metric tons of CO2.
4.4bn
Approximately one third of all food produced for human consumption in the world is lost or wasted. [1]
1/3
In the same way, how and where you invest your savings might seem a small matter…
but it can make a real difference.
You just need the right partner
Not all investment companies are the same!
This means we don’t invest in companies and countries that violate international laws, or whose businesses practices don’t meet our ESG criteria. [3]
Amundi helps you put your money to work in ways that benefit the environment and society. We are a pioneer in responsible investing.
In 2019 we specifically targeted food retailers: a large proportion of workers in this sector earn minimum wages. During the year we engaged directly with many company managements helping to promote social dialogue and the protection of fundamental workers rights. [4]
One of our key engagement areas is pushing for employees to be paid a living wage.
We work with the companies we do invest in, helping them to choose the most responsible and sustainable paths for the future.
ESG investing was a source of outperformance over the last two years in both equity and bond markets!
Studies show our responsible investing approach can help make a better world, and also help our clients to meet their investing goals.
We actively push for change, voting at company board meetings- and using our scale as one of Europe’s biggest investors to influence company management.
In 2018 we voted in 2960 AGMs, covering 35,285 resolutions
We constantly look for new ways to use your money
to invest in vital areas such as fighting climate change
In 2014, Amundi co-founded the Portfolio Decarbonization Coalition [5], whose investors have now pledged to align over
of their portfolios with a
low carbon economy.
$600bn
[6]
Amundi fosters financial innovation, finding ways to mitigate climate change related risk exposure and to finance the transition to cleaner energy sources around the world.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 31 March 2021
Doc ID# 1438156
Sources:
[1] Food and Agriculture Organization of the United Nations, in its publication Food wastage footprint – Impacts on natural resources (2013).
[2] http://www.epa.gov/sites/production/files/2019-12/documents/epafoodwaste_factsheet_dec2019-2.pdf
[3] https://www.amundi.com/int/Common-Content/Instit/Services-aux-professionnels/2019-01-Responsible-Investment/Responsible-investment-offering/Responsible-investment-offering
[4] Amundi engagement report 2019
[5] https://unepfi.org/pdc/about/
[6] https://research-center.amundi.com/page/Publications/Discussion-Paper/2020/ESG-Investing-in-Recent-Years-New-Insights-from-Old-Challenges
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
ESG Investing in turbolent times
Taking steps towards a brighter future
What to invest in - and why?
how investing with the right partner can help to shape a better world
Did you know that food is the biggest form of everyday waste in our rubbish?
For example, using up what’s near to the expiry date, or if you make too much store some for the next day?
It seems a small thing, but it’s helping to address a massive problem…
Do you try not to waste food in your home?
And uses the planet’s precious freshwater resources
It creates
huge methane emissions
from landfill
This contributes to the problem of world hunger
Globally, food waste consumes 21% of all fresh water. [2]
21%
Globally, food loss and waste have a combined carbon footprint of
[2]
metric tons of CO2.
4.4bn
Approximately one third of all food produced for human consumption in the world is lost or wasted. [1]
1/3
In the same way, how and where you invest your savings might seem a small matter but it can make a real difference.
This means we don’t invest in companies and countries that violate international laws, or whose businesses practices don’t meet our ESG criteria. [3]
You just need the right partner
Not all investment companies are
the same!
Amundi helps you put your money to work in ways that benefit the environment and society. We are a pioneer in responsible investing.
In 2019 we specifically targeted food retailers: a large proportion of workers in this sector earn minimum wages. During the year we engaged directly with many company managements helping to promote social dialogue and the protection of fundamental workers rights. [4]
One of our key engagement areas is pushing for employees to be paid a living wage.
We work with the companies we do invest in, helping them to choose the most responsible and sustainable paths for the future.
ESG investing was a source of outperformance over the last two years in both equity and bond markets!
Studies show our responsible investing approach can help make a better world, and also help our clients to meet their investing goals.
We actively push for change, voting at company board meetings- and using our scale as one of Europe’s biggest investors to influence company management.
We constantly look for new ways to use your money to invest in vital areas such as fighting climate change
[6]
Amundi fosters financial innovation, finding ways to mitigate climate change related risk exposure and to finance the transition to cleaner energy sources around the world.
In 2014, Amundi co-founded the Portfolio Decarbonization Coalition [5], whose investors have now pledged to align over
of their portfolios with a
low carbon economy.
$600bn
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 December 2020. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 31 March 2021
Doc ID# 1438156
Sources:
[1] Food and Agriculture Organization of the United Nations, in its publication Food wastage footprint – Impacts on natural resources (2013).
[2] http://www.epa.gov/sites/production/files/2019-12/documents/epafoodwaste_factsheet_dec2019-2.pdf
[3] https://www.amundi.com/int/Common-Content/Instit/Services-aux-professionnels/2019-01-Responsible-Investment/Responsible-investment-offering/Responsible-investment-offering
[4] Amundi engagement report 2019
[5] https://unepfi.org/pdc/about/
[6] https://research-center.amundi.com/page/Publications/Discussion-Paper/2020/ESG-Investing-in-Recent-Years-New-Insights-from-Old-Challenges
Do ESG funds fulfil their promises?
The road to 100% ESG
Investing responsibly is more than just a style
Invest in a better future
Green Bonds: How to see your savings at work fighting climate change
‘Bad’ stocks: Is excluding companies the only way forward?
How investors can address the global food challenge
What to invest in - and why?
Last year, we voted against at least one of the resolutions submitted by companies’ management at 71% of general meetings
Elodie Laugel
chief responsible investment officer at Amundi
‘With great power comes great responsibility’ is not just a famous quote from superhero movies, but it is also a well-known reality in the investment industry.
Asset managers, who can own billions in companies, have the right and duty to influence and determine their destiny, bringing positive changes that are beneficial for everyone.
Voting at a company’s annual general meeting (AGM) is usually centred around issues such as executive pay, gender balance on boards and, most importantly today, climate change action and rising inequality.
There have been many scandals over recent years around controversial behaviour from some well-known companies.
Since some of these events, investors have improved their efforts and demonstrated they can make real changes to companies.
But managing the shift from simply asking questions to actually making durable changes to a firm, however, is not an easy journey.
‘You need to have dedicated resources,’ says Elodie Laugel, chief responsible investment officer at Amundi, the leading European asset manager [1]. This includes ‘an expert team’ of ESG and corporate governance analysts to work alongside portfolio managers, as well as regional experts across the globe.
As of May this year, there were 39 dedicated people employed at Amundi in the stewardship team globally, and a continuously growing group within the investment team running dedicated environmental, social and governance (ESG) funds. [2]
In practice, why do asset managers vote? As one of their top duties, fund groups have to stand up for the interests of their clients. They act on their behalf to address any issues they need to tackle within the companies they hold in their funds.
Therefore, in preparation for voting, there is always a lot of work to do, Amundi explains.
There is day-to-day research to look at aspects such as improving transparency or addressing specific problems, e.g. gender pay gap. There is also consistent and persuasive dialogue with the company before and after the voting session. This means that Amundi would be ready to challenge and comfortably vote against a company’s management decision if they are not satisfied with it.
‘Last year, we voted against at least one of the resolutions submitted by companies’ management at 71% of general meetings’ says Laugel.
In 2020, these ‘no votes’ were mainly related to three main reasons [3]:
For example, during the 2019 voting season, Amundi voted against the re-election of Boeing chief executive and chairman Dennis Muilenburg on objections to the company’s handling of the crisis which followed the crashes of the 737 Max. In that case, shareholders had voted for an independent chair at the board. [4]
Amundi’s voting strategy is applied to all the companies it invests in. Climate change is usually a priority in the voting agenda, but the attention to social inequality has become paramount over the past few years.
So what happens if a company fails to comply with the improvement suggested by responsible investors? Amundi recognises that companies’ approaches take time to evolve, and looks for progress as much as achievement. This only means investors need to do extra legwork.
Taking a laggard from the bottom line to become the best performer in the next 10 years shows real impact.
The energy transition: the decarbonisation of economies
Social cohesion: the wage inequality and employees’ involvement in the company’s governance
Why choose Amundi?
Voting matters: How can my fund change the world?
Voting rights can and do make a difference, especially if it means disagreeing with top decision makers.
Sources:
[1] Source: IPE "Top 500 asset managers" published in June 2020 and based on AUM as at December 2019
[2] Amundi Asset Management as at 31 May 2021
[3] Amundi 2020 Engagement Report
[4] Amundi 2019 Engagement Report
Voting policy: The key systemic risks for our society
Researching and engaging
What type of resultions do investors prefer?
Voting priorities and challenges
What do you think is the most effective way for investors to influence board policies and decisions
What are the top three sustainability topics that you will focus on when engaging with the board in 2020?
Sources: ShareAction, Voting Matters 2020, Published December 2020.
Sources: Institutional Investor Survey 2020, Harvard Law School of Corporate Governance (Survey of 41 global institutional investors managing a combined $26tn in assets under management – participated in January 2020)
Questionable remuneration practice.
Unsustainable dividend during a global pandemic.
Overboarding, as the importance of the Chairman of the Board, the Chairs of the various committees, the Lead Director as well as directors implies to devote sufficient time to these functions.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 July 2021
Doc ID# 1687861
Amundi goes all in on ESG
A closer look at the ‘G’ in ESG: what it means and why it matters
How to prepare for the next crisis
Why choose Amundi?
Voting matters: How can my fund change the world?
How investors can address the global food challenge
Why choose Amundi?
Voting rights can and do make a difference, especially if it means disagreeing with top decision makers.
‘With great power comes great responsibility’ is not just a famous quote from superhero movies, but it is also a well-known reality in the investment industry.
Asset managers, who can own billions in companies, have the right and duty to influence and determine their destiny, bringing positive changes that are beneficial for everyone.
Voting at a company’s annual general meeting (AGM) is usually centred around issues such as executive pay, gender balance on boards and, most importantly today, climate change action and rising inequality.
There have been many scandals over recent years around controversial behaviour from some well-known companies.
Since some of these events, investors have improved their efforts and demonstrated they can make real changes to companies.
But managing the shift from simply asking questions to actually making durable changes to a firm, however, is not an easy journey.
‘You need to have dedicated resources,’ says Elodie Laugel, chief responsible investment officer at Amundi, the leading European asset manager [1]. This includes ‘an expert team’ of ESG and corporate governance analysts to work alongside portfolio managers, as well as regional experts across the globe.
As of May this year, there were 39 dedicated people employed at Amundi in the stewardship team globally, and a continuously growing group within the investment team running dedicated environmental, social and governance (ESG) funds. [2]
Voting policy: The key systemic risks for our society
Researching and engaging
In practice, why do asset managers vote? As one of their top duties, fund groups have to stand up for the interests of their clients. They act on their behalf to address any issues they need to tackle within the companies they hold in their funds.
Therefore, in preparation for voting, there is always a lot of work to do, Amundi explains.
There is day-to-day research to look at aspects such as improving transparency or addressing specific problems, e.g. gender pay gap. There is also consistent and persuasive dialogue with the company before and after the voting session. This means that Amundi would be ready to challenge and comfortably vote against a company’s management decision if they are not satisfied with it.
What type of resultions do investors prefer?
Sources:
ShareAction, Voting Matters 2020, Published December 2020.
‘Last year, we voted against at least one of the resolutions submitted by companies’ management at 71% of general meetings’ says Laugel.
In 2020, these ‘no votes’ were mainly related to three main reasons [3]:
For example, during the 2019 voting season, Amundi voted against the re-election of Boeing chief executive and chairman Dennis Muilenburg on objections to the company’s handling of the crisis which followed the crashes of the 737 Max. In that case, shareholders had voted for an independent chair at the board. [4]
What do you think is the most effective way for investors to influence board policies and decisions
So what happens if a company fails to comply with the improvement suggested by responsible investors? Amundi recognises that companies’ approaches take time to evolve, and looks for progress as much as achievement. This only means investors need to do extra legwork.
Taking a laggard from the bottom line to become the best performer in the next 10 years shows real impact.
What are the top three sustainability topics that you will focus on when engaging with the board in 2020?
Sources:
Institutional Investor Survey 2020, Harvard Law School of Corporate Governance (Survey of 41 global institutional investors managing a combined $26tn in assets under management – participated in January 2020)
Sources:
[1] Source: IPE "Top 500 asset managers" published in June 2020 and based on AUM as at December 2019
[2] Amundi Asset Management as at 31 May 2021
[3] Amundi 2020 Engagement Report
[4] Amundi 2019 Engagement Report
All but passive: Not only active managers walk the walk on ESG
A closer look at the ‘G’ in ESG: what it means and why it matters
We have always been a frontrunner in the ESG space. The 3-year plan paves the way for a truly sustainable investment approach.
Elodie Laugel
chief responsible investment officer at Amundi
Introduction to ESG with Amundi
Deep dive into ESG:
Investing in a better tomorrow
THE BASICS
More and more asset managers are trying to meet the rising demand for responsible investments by accounting for environmental, social and governance (ESG) factors. That means they seek to invest in companies that can demonstrate that they are actively tackling environmental, social or governance issues like climate change, social inequality or corporate transparency.
While ESG investing may seem straightforward, it has its own set of challenges. ‘It’s not as easy as flipping a switch,’ says Elodie Laugel, Chief Responsible Investment Officer at Amundi. ‘Incorporating ESG factors into investment processes requires perseverance and, above all, full commitment. You can’t do ESG half-heartedly – you need to really mean it.’
Far from just talking the talk, Amundi practises what it preaches and has set its sights on making ESG investing mainstream. In 2018, the company embarked on a journey towards 100% ESG integration in all its investment processes and voting policies. To meet these goals, Amundi has developed a 3-year action plan to become fully ESG-compliant by 2021.
‘We set out to establish an unprecedented level of ESG integration throughout the entire organisation,’ Laugel says. ‘We have always been a frontrunner in the ESG space. Amundi’s 3-year plan paves the way for a truly sustainable investment approach. There is much more we can do collectively: countries, companies and investors today have a responsibility to transition to sustainable economies.’
In line with the 3-year plan, Amundi pledged to expand its in-house ESG analysis across portfolios and benchmark indices. The firm, which already manages more than €705bn in responsible assets, has developed a wide range of ESG-compliant, open-ended funds and solutions that cover the main traditional asset classes, including equities, bonds and money market instruments.
Amundi’s ESG analysts also scrutinise asset classes that are not currently on the radar of responsible investors, including emerging markets, high yield and small- and mid-cap stocks. By and large, more than 12,000 companies are scanned against 37 criteria based on international regulations, information provided by ratings agencies and Amundi’s ongoing conversations with businesses.
Additionally, the firm expects that all of its actively managed open-ended funds will achieve higher ESG scores than their benchmark indices by 2021. Depending on their respective ESG ratings, the funds’ holdings are reduced or increased, which ensures a high level of ESG compliance. On the passive side, a range of strategies proposes ready-to-use ESG index funds, exchange-traded funds (ETFs) or customised solutions to guarantee their alignment with Amundi’s sustainability goals.
Reaching 100% ESG integration in voting is another milestone of Amundi’s ambitions, with a special focus on two priorities: the energy transition and the social cohesion. According to Laugel, a company that ‘respects the environment, values its human capital and has healthy governance practices in place’ is better equipped to outperform in the long run.
Why choose Amundi?
Amundi goes all in on ESG
The road to 100% ESG integration
Laugel also sees Amundi as an ‘adviser to do better’ by helping businesses identify ‘practices they were not aware of’ and enabling them to improve their ESG credibility. ‘We changed some company proposals because of the dialogue we are having with them,’ she says. ‘Due to our ongoing conversations with their sector peers, we can provide firms with valuable insights, giving them the opportunity to refine and adjust their sustainability strategies.’
She acknowledges, however, that there is still a long way to go: ‘This is just the beginning. Only then will we have reached our goal of making sustainable investing mainstream when ESG factors, tools and techniques are an inherent part of the investment value chain.’
A guide through the ESG space
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 30 June 2021
Doc ID# 1697829
Voting matters: How can my fund change the world?
A closer look at the ‘G’ in ESG: what it means and why it matters
Why choose Amundi?
Voting matters:
How can my fund change the world?
Why choose Amundi?
More and more asset managers are trying to meet the rising demand for responsible investments by accounting for environmental, social and governance (ESG) factors. That means they seek to invest in companies that can demonstrate that they are actively tackling environmental, social or governance issues like climate change, social inequality or corporate transparency.
While ESG investing may seem straightforward, it has its own set of challenges. ‘It’s not as easy as flipping a switch,’ says Elodie Laugel, Chief Responsible Investment Officer at Amundi. ‘Incorporating ESG factors into investment processes requires perseverance and, above all, full commitment. You can’t do ESG half-heartedly – you need to really mean it.’
Far from just talking the talk, Amundi practises what it preaches and has set its sights on making ESG investing mainstream. In 2018, the company embarked on a journey towards 100% ESG integration in all its investment processes and voting policies. To meet these goals, Amundi has developed a 3-year action plan to become fully ESG-compliant by 2021.
‘We set out to establish an unprecedented level of ESG integration throughout the entire organisation,’ Laugel says. ‘We have always been a frontrunner in the ESG space. Amundi’s 3-year plan paves the way for a truly sustainable investment approach. There is much more we can do collectively: countries, companies and investors today have a responsibility to transition to sustainable economies.’
The road to 100% ESG integration
In line with the 3-year plan, Amundi pledged to expand its in-house ESG analysis across portfolios and benchmark indices. The firm, which already manages more than €705bn in responsible assets, has developed a wide range of ESG-compliant, open-ended funds and solutions that cover the main traditional asset classes, including equities, bonds and money market instruments.
Amundi’s ESG analysts also scrutinise asset classes that are not currently on the radar of responsible investors, including emerging markets, high yield and small- and mid-cap stocks. By and large, more than 12,000 companies are scanned against 37 criteria based on international regulations, information provided by ratings agencies and Amundi’s ongoing conversations with businesses.
Additionally, the firm expects that all of its actively managed open-ended funds will achieve higher ESG scores than their benchmark indices by 2021. Depending on their respective ESG ratings, the funds’ holdings are reduced or increased, which ensures a high level of ESG compliance. On the passive side, a range of strategies proposes ready-to-use ESG index funds, exchange-traded funds (ETFs) or customised solutions to guarantee their alignment with Amundi’s sustainability goals.
Reaching 100% ESG integration in voting is another milestone of Amundi’s ambitions, with a special focus on two priorities: the energy transition and the social cohesion. According to Laugel, a company that ‘respects the environment, values its human capital and has healthy governance practices in place’ is better equipped to outperform in the long run.
We have always been a frontrunner in the ESG space. The 3-year plan paves the way for a truly sustainable investment approach.
Elodie Laugel,
chief responsible investment officer at Amundi
Laugel also sees Amundi as an ‘adviser to do better’ by helping businesses identify ‘practices they were not aware of’ and enabling them to improve their ESG credibility. ‘We changed some company proposals because of the dialogue we are having with them,’ she says. ‘Due to our ongoing conversations with their sector peers, we can provide firms with valuable insights, giving them the opportunity to refine and adjust their sustainability strategies.’
She acknowledges, however, that there is still a long way to go: ‘This is just the beginning. Only then will we have reached our goal of making sustainable investing mainstream when ESG factors, tools and techniques are an inherent part of the investment value chain.’
A guide through the ESG space
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 July 2021
Doc ID# 1687861
How to prepare for the next crisis
Voting matters: How can my fund change the world?
Amundi goes all in on ESG
A closer look at the ‘G’ in ESG: what it means and why it matters
How to prepare for the next crisis
Why choose Amundi?
All but passive: Not only active managers walk the walk on ESG
All but passive:
Not only active managers walk the walk on ESG
ESG is team work
In 2020 Amundi voted on 49,968 items surrounding governance, 20% of which were against management
3
Introduction to ESG with Amundi
Deep dive into ESG:
Investing in a better tomorrow
THE BASICS
While accounting scandals and corporate collapses make great headlines, they certainly do not make great investments.
Exposing the laggards can be rewarding for journalists but for those wanting to see a return on their investment, they should be able to spot any red flags before the damage is done.
In recent years however as the business environment has grown more complex due to factors such as digitisation, globalisation and climate change, that task has been made more difficult.
Now investors must understand many more risks, real or potential and assess the impact these may have on a company’s performance using a vast array of data.
Effective corporate governance should therefore ensure that risks are understood, managed, and, when appropriate, communicated before they lead to problems. This is the ‘G’ in ESG investing and it can make a difference to a company’s destiny.
French asset manager Amundi has a strong focus on the financial performance of the companies in which it invests. But this performance, it believes, can only be sustainable as part of a long-term vision, combined with exemplary corporate governance and strong societal and environmental responsibility.
In order to achieve this, the group does this through its voting rights, as explained in its 2019 annual report: ‘Our vision of good governance is expressed through our voting policy and our shareholder dialogue process. The shareholder’s power to ensure this good governance depends on participation in the company’s core guidelines, specifically at General Meetings.’
Inside the asset manager, it is the job of the Corporate Governance team to analyse the resolutions tabled at the Shareholders meeting and to liaise with portfolio managers to determine the voting intentions. This is where the agenda is set. Each year new issues will rise up the agenda so it is the job of this team to ensure they are in sync with the mood of society as a whole.
For instance, in 2019 the Corporate Governance team drew the attention of issuers to two themes Amundi considered essential: climate change and growing inequalities [1]. Amundi believes engagement on matters such as these will underpin the long-term performance of a company.
In the search for companies that are making important calls on issues such as the environment and inequality, Amundi strengthens actions on “laggards” that could end up with a vote “against” management as soon as 2021, for example for corporates that are high CO2 emitters and have not yet started to align their strategy with Paris-aligned objectives. [2]
The asset manager used to focus on AGMs (Annual General Meetings) when assessing governance issues, but now analysts from the ESG team are getting involved in discussions with board members on issues far wider than those featuring in the AGM minutes.
At the end of the day, it comes down to sharing data and information across different teams. ESG, after all, is teamwork.
Why choose Amundi?
A closer look at the ‘G’ in ESG: what it means and why it matters
Governance takes a whole lot of collaboration, but the results are worth the effort
Voting statistics 2020, as voted by the Paris team
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 July 2021
Doc ID# 1692831
Sources:
[1] Amundi Asset Management, Engagement Report 2019
[2] Amundi Asset Management, Engagement Report 2020
[3] Amundi Asset Management, Engagement Report 2020
Voting matters: How can my fund change the world?
A closer look at the ‘G’ in ESG: what it means and why it matters
Why choose Amundi?
Amundi goes all in on ESG
Why choose Amundi?
While accounting scandals and corporate collapses make great headlines, they certainly do not make great investments.
Exposing the laggards can be rewarding for journalists but for those wanting to see a return on their investment, they should be able to spot any red flags before the damage is done.
In recent years however as the business environment has grown more complex due to factors such as digitisation, globalisation and climate change, that task has been made more difficult.
Now investors must understand many more risks, real or potential and assess the impact these may have on a company’s performance using a vast array of data.
Effective corporate governance should therefore ensure that risks are understood, managed, and, when appropriate, communicated before they lead to problems. This is the ‘G’ in ESG investing and it can make a difference to a company’s destiny.
French asset manager Amundi has a strong focus on the financial performance of the companies in which it invests. But this performance, it believes, can only be sustainable as part of a long-term vision, combined with exemplary corporate governance and strong societal and environmental responsibility.
In order to achieve this, the group does this through its voting rights, as explained in its 2019 annual report: ‘Our vision of good governance is expressed through our voting policy and our shareholder dialogue process. The shareholder’s power to ensure this good governance depends on participation in the company’s core guidelines, specifically at General Meetings.’
Inside the asset manager, it is the job of the Corporate Governance team to analyse the resolutions tabled at the Shareholders meeting and to liaise with portfolio managers to determine the voting intentions. This is where the agenda is set. Each year new issues will rise up the agenda so it is the job of this team to ensure they are in sync with the mood of society as a whole.
For instance, in 2019 the Corporate Governance team drew the attention of issuers to two themes Amundi considered essential: climate change and growing inequalities [1]. Amundi believes engagement on matters such as these will underpin the long-term performance of a company.
In the search for companies that are making important calls on issues such as the environment and inequality, Amundi strengthens actions on “laggards” that could end up with a vote “against” management as soon as 2021, for example for corporates that are high CO2 emitters and have not yet started to align their strategy with Paris-aligned objectives. [2]
The asset manager used to focus on AGMs (Annual General Meetings) when assessing governance issues, but now analysts from the ESG team are getting involved in discussions with board members on issues far wider than those featuring in the AGM minutes.
At the end of the day, it comes down to sharing data and information across different teams. ESG, after all, is teamwork.
Governance takes a whole lot of collaboration, but the results are worth the effort
Voting statistics 2020, as voted by the Paris team
Sources:
[1] Amundi Asset Management, Engagement Report 2019
[2] Amundi Asset Management, Engagement Report 2020
[3] Amundi Asset Management, Engagement Report 2020
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 30 June 2021
Doc ID# 1697829
Amundi goes all in on ESG
Voting matters: How can my fund change the world?
Amundi goes all in on ESG
How to prepare for the next crisis
Why choose Amundi?
All but passive: Not only active managers walk the walk on ESG
All but passive:
Not only active managers walk the walk on ESG
People often talk about ‘active’ and ‘passive’ investing, without knowing that the real distinction between the two really lies around having an active or index approach. But what does this mean?
While ‘passive’ investing does not involve picking your favourite stocks, it certainly doesn’t mean ‘sit back, relax and enjoy the flight’. Whether you use an index-tracking exchange traded fund (ETF) or a traditional mutual fund, passive funds are always managed by a professional, who takes care of selecting the right securities to best mirror the performance of an index. When managing a fund passively, there are also many decisions to take such as choosing an appropriate benchmark to replicate, having a careful approach to stock and index selection, ensuring that the performance is in line with expectation and even or how and when to trade. This is all but passive.
Why choose Amundi?
All but passive: Not only active managers walk the walk on ESG
Can a passive approach work with sustainable investing
Sustainable investing has traditionally been considered the domain of active investors for their ability to pick stocks and choose to remove ‘bad’ companies from their portfolio. But this doesn’t always have to be the case. With around $18tn of assets tracking indices globally , and passive investors benefiting from the same shareholder rights as active investors, they too can leave a mark and speak up in matters of sustainability.
In the past two years, sustainable investing has gained huge traction. According to the ETFGI between the end of 2018 and the end of 2020, global sustainable ETF assets had increased almost seven-fold, from $28bn to $193bn… and in fact, by the end of May 2021 we saw that number passing $280bn with over 600 different ESG ETFs available. Those choosing to invest sustainably have many reasons for doing so; they might want to match their portfolios to their ethical values, or perhaps they believe that sustainable companies are likely to perform better in the long term.
Sustainability is big business
What is an ETF?
An exchange-traded fund (ETF) is an investment fund that tracks the performance of a chosen index. It does so by investing in a range of assets intended to replicate the index holdings.
ETFs are traded on an exchange, similar to company shares
Still, one-size does not fit all when it comes to ESG investing, both in active and passive management. Risk tolerance, personal beliefs, performance goals and many other factors play a role in choosing the right sustainable fund. The choice among the ever-growing range of ESG indices available to investors is vast. It is easier than ever to find something that aligns to someone’s ESG beliefs while meeting their risk tolerance. This is why French asset manager Amundi has set out its responsible investment range by levels of ESG or Climate integration, from + for broad market exposure to +++ to take a best in class approach – on a spectrum from ‘light green’ to ‘dark green’.
Finding the right fit
Explore the Amundi Sustainable ETF range
ESG
+
ESG
++
ESG
+++
++
Climate
+++
Climate
Broad market exposure with enhanced ESG score
Best-in-class approach with a controlled tracking error
Best-in-class approach combined with a strict negative screening
Transition towards a low carbon economy with broad market
Accelerated transition towards a low carbon economy.
GHG intensive activity screen
Choosing sustainable indices is not the only way to make an impact as an investor. Shareholders have the great power of influencing and changing companies’ behaviour, a power not only active investors hold. Asset managers, especially those with strong voting and engagement policies, can engage with companies on clients’ behalf.
Asset managers can vote at shareholder meetings on many issues and in some cases have conversations with company boards to ask for improvements. These can go from getting container shipping companies to commit to net-zero targets, asking food and beverage manufacturers to report on the carbon emissions of their supply chain, to even getting oil and gas companies to commit to linking executive pay to climate targets.
Excluding ‘bad’ companies, divesting and engaging can all be achieved with passive investing, and, as ever, it is important to select a fund manager who not only ‘talks the talk’ on ESG issues but also ‘walks the walk’.
Amplifying your voice
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 8 July 2021
Doc ID# 1711614
Sources:
[1] Boston Consulting Group Global Asset Management Report 2020
Voting matters: How can my fund change the world?
A closer look at the ‘G’ in ESG: what it means and why it matters
Amundi goes all in on ESG
Why choose Amundi?
A closer look at the ‘G’ in ESG: what it means and why it matters
A closer look at the ‘G’ in ESG: what it means and why it matters
Why choose Amundi?
People often talk about ‘active’ and ‘passive’ investing, without knowing that the real distinction between the two really lies around having an active or index approach. But what does this mean?
While ‘passive’ investing does not involve picking your favourite stocks, it certainly doesn’t mean ‘sit back, relax and enjoy the flight’. Whether you use an index-tracking exchange traded fund (ETF) or a traditional mutual fund, passive funds are always managed by a professional, who takes care of selecting the right securities to best mirror the performance of an index. When managing a fund passively, there are also many decisions to take such as choosing an appropriate benchmark to replicate, having a careful approach to stock and index selection, ensuring that the performance is in line with expectation and even or how and when to trade. This is all but passive.
Sustainable investing has traditionally been considered the domain of active investors for their ability to pick stocks and choose to remove ‘bad’ companies from their portfolio. But this doesn’t always have to be the case. With around $18tn of assets tracking indices globally , and passive investors benefiting from the same shareholder rights as active investors, they too can leave a mark and speak up in matters of sustainability.
Can a passive approach work with sustainable investing
In the past two years, sustainable investing has gained huge traction. According to the ETFGI between the end of 2018 and the end of 2020, global sustainable ETF assets had increased almost seven-fold, from $28bn to $193bn… and in fact, by the end of May 2021 we saw that number passing $280bn with over 600 different ESG ETFs available. Those choosing to invest sustainably have many reasons for doing so; they might want to match their portfolios to their ethical values, or perhaps they believe that sustainable companies are likely to perform better in the long term.
Sustainability is big business
Still, one-size does not fit all when it comes to ESG investing, both in active and passive management. Risk tolerance, personal beliefs, performance goals and many other factors play a role in choosing the right sustainable fund. The choice among the ever-growing range of ESG indices available to investors is vast. It is easier than ever to find something that aligns to someone’s ESG beliefs while meeting their risk tolerance. This is why French asset manager Amundi has set out its responsible investment range by levels of ESG or Climate integration, from + for broad market exposure to +++ to take a best in class approach – on a spectrum from ‘light green’ to ‘dark green’.
Finding the right fit
Explore the Amundi Sustainable ETF range
Choosing sustainable indices is not the only way to make an impact as an investor. Shareholders have the great power of influencing and changing companies’ behaviour, a power not only active investors hold. Asset managers, especially those with strong voting and engagement policies, can engage with companies on clients’ behalf.
Asset managers can vote at shareholder meetings on many issues and in some cases have conversations with company boards to ask for improvements. These can go from getting container shipping companies to commit to net-zero targets, asking food and beverage manufacturers to report on the carbon emissions of their supply chain, to even getting oil and gas companies to commit to linking executive pay to climate targets.
Excluding ‘bad’ companies, divesting and engaging can all be achieved with passive investing, and, as ever, it is important to select a fund manager who not only ‘talks the talk’ on ESG issues but also ‘walks the walk’.
Amplifying your voice
Sources:
[1] Boston Consulting Group Global Asset Management Report 2020
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 July 2021
Doc ID# 1692831
Voting matters: How can my fund change the world?
Amundi goes all in on ESG
How to prepare for the next crisis
Why choose Amundi?
A closer look at the ‘G’ in ESG: what it means and why it matters
Humanity is superb at shutting its eyes to things it does not want to see. The ice caps are melting and global warming is about to drive polar bears to extinction by 2100? Let’s not think about that. Our clothes are a product of child labour? Quick, talk about something else. The material for all our shiny tech gadgets is sourced under appalling circumstances? Oh well.
If there is one good thing to say about Covid-19, it is that the havoc it wrought pierced our cosy, little bubble and forced us to take a long, hard look at what is going wrong in the world. Ignoring environmental laissez-faire and working conditions that verge on slavery has become significantly harder since the coronavirus outbreak.
The pandemic has shed a light on global catastrophes such as nature degradation and social injustices and has brought clarion calls for governments, businesses and consumers. But while most were well aware of climate change and resource scarcity way before the crisis hit, they have failed to deliver the efforts needed to set a new course to reduce global warming and inequalities
But things are about to change, not least due to investors’ shift in attitudes. People have started to think more carefully about where they put their money and are increasingly reluctant to buy into environmentally or socially harmful companies.
Investors have started to focus on firms that follow a sustainable approach and respect environmental and social standards. According to Morningstar data, sustainable open-end funds and ETFs available to European investors attracted net inflows of €233 billion in 2020, almost double the figure for 2019.
That is a promising development, as sustainable funds tend to be better equipped to weather a crisis of the dimensions of Covid-19. Unlike their traditional peers, sustainable funds usually have a lower exposure to conventional energy and a higher exposure to high-quality and technology companies – two areas that have been thriving through the pandemic. Biotech and pharmaceutical stocks experienced a particularly significant rise, with biotech and pharma companies offering innovative solutions to the diseases that come with age.
In general, investors who want to brace themselves for the next crisis do well to take a look at socially responsible investment (SRI) funds. Focusing on quality and sustainability, SRI funds allocate capital to businesses that honour and implement environmental and social criteria. In other words, they offer an opportunity for investors to make more than just money.
By investing in firms that are actively participating in the fight against climate change and take a stance on social inequalities, investors can help to create a brighter future. Investments in SRI funds also reap higher returns than ordinary bank savings, which hardly yield anything these days.
What’s more, after assessing the findings of 2,200 individual studies on the impact of SRI on financial performance, DWS and Hamburg University found that 90% of the studies demonstrated a positive correlation between SRI and corporate financial performance.
Amundi was among the first fund providers to tap into the SRI movement. As Europe’s largest asset manager , Amundi has a decade-long experience in responsible investing and developed several strategies to help investors reach their financial and moral objectives. The firm’s solidarity funds, for example, focus on generating a positive social and environmental impact.
‘The funds invest in companies and initiatives that give individuals access to decent housing and a meaningful job as well as healthcare, education and training. Additionally, they aim to protect the environment and foster international solidarity,’ says Vincent Mortier, deputy chief investment officer at Amundi.
‘As Europe’s largest asset manager, we take our responsibility for the society and the environment very seriously,’ Mortier adds. ‘Investing in companies that are actively participating in the fight against climate change and take a stance on social inequalities goes a long way.’
Why choose Amundi?
How to prepare for the next crisis
Investing sustainable not only helps to build a better future, but has also proven to bring stronger financial returns throughout the pandemic.
Remedy for crises
Anyone investing in Amundi’s solidarity funds helps to improve conditions in five different areas:
House
Employment
Health
Environment
International solidarity
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 30 June 2021
Doc ID# 1698107
Sources:
[1] https://www.morningstar.co.uk/uk/news/209411/sustainable-funds-record-breaking-year.aspx
[2] https://www.db.com/newsroom_news/2016/ghp/esg-and-financial-performance-aggregated-evidence-from-more-than-200-empirical-studies-en-11363.htm
[3] IPE: "Top 500 asset managers”, published in June 2020 and based on AUM as of December 2019
Voting matters: How can my fund change the world?
Amundi goes all in on ESG
A closer look at the ‘G’ in ESG: what it means and why it matters
Why choose Amundi?
A closer look at the ‘G’ in ESG: what it means and why it matters
Why choose Amundi?
Investing sustainable not only helps to build a better future, but has also proven to bring stronger financial returns throughout the pandemic.
Humanity is superb at shutting its eyes to things it does not want to see. The ice caps are melting and global warming is about to drive polar bears to extinction by 2100? Let’s not think about that. Our clothes are a product of child labour? Quick, talk about something else. The material for all our shiny tech gadgets is sourced under appalling circumstances? Oh well.
If there is one good thing to say about Covid-19, it is that the havoc it wrought pierced our cosy, little bubble and forced us to take a long, hard look at what is going wrong in the world. Ignoring environmental laissez-faire and working conditions that verge on slavery has become significantly harder since the coronavirus outbreak.
The pandemic has shed a light on global catastrophes such as nature degradation and social injustices and has brought clarion calls for governments, businesses and consumers. But while most were well aware of climate change and resource scarcity way before the crisis hit, they have failed to deliver the efforts needed to set a new course to reduce global warming and inequalities
But things are about to change, not least due to investors’ shift in attitudes. People have started to think more carefully about where they put their money and are increasingly reluctant to buy into environmentally or socially harmful companies.
Investors have started to focus on firms that follow a sustainable approach and respect environmental and social standards. According to Morningstar data, sustainable open-end funds and ETFs available to European investors attracted net inflows of €233 billion in 2020, almost double the figure for 2019.
That is a promising development, as sustainable funds tend to be better equipped to weather a crisis of the dimensions of Covid-19. Unlike their traditional peers, sustainable funds usually have a lower exposure to conventional energy and a higher exposure to high-quality and technology companies – two areas that have been thriving through the pandemic. Biotech and pharmaceutical stocks experienced a particularly significant rise, with biotech and pharma companies offering innovative solutions to the diseases that come with age.
In general, investors who want to brace themselves for the next crisis do well to take a look at socially responsible investment (SRI) funds. Focusing on quality and sustainability, SRI funds allocate capital to businesses that honour and implement environmental and social criteria. In other words, they offer an opportunity for investors to make more than just money.
By investing in firms that are actively participating in the fight against climate change and take a stance on social inequalities, investors can help to create a brighter future. Investments in SRI funds also reap higher returns than ordinary bank savings, which hardly yield anything these days.
What’s more, after assessing the findings of 2,200 individual studies on the impact of SRI on financial performance, DWS and Hamburg University found that 90% of the studies demonstrated a positive correlation between SRI and corporate financial performance.
Amundi was among the first fund providers to tap into the SRI movement. As Europe’s largest asset manager , Amundi has a decade-long experience in responsible investing and developed several strategies to help investors reach their financial and moral objectives. The firm’s solidarity funds, for example, focus on generating a positive social and environmental impact.
‘The funds invest in companies and initiatives that give individuals access to decent housing and a meaningful job as well as healthcare, education and training. Additionally, they aim to protect the environment and foster international solidarity,’ says Vincent Mortier, deputy chief investment officer at Amundi.
‘As Europe’s largest asset manager, we take our responsibility for the society and the environment very seriously,’ Mortier adds. ‘Investing in companies that are actively participating in the fight against climate change and take a stance on social inequalities goes a long way.’
Remedy for crises
Anyone investing in Amundi’s solidarity funds helps to improve conditions in five different areas:
Sources:
1] https://www.morningstar.co.uk/uk/news/209411/sustainable-funds-record-breaking-year.aspx
[2] https://www.db.com/newsroom_news/2016/ghp/esg-and-financial-performance-aggregated-evidence-from-more-than-200-empirical-studies-en-11363.htm
[3] IPE: "Top 500 asset managers”, published in June 2020 and based on AUM as of December 2019
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 May 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 1 July 2021
Doc ID# 1692831
Voting matters: How can my fund change the world?
Amundi goes all in on ESG
A closer look at the ‘G’ in ESG: what it means and why it matters
How to prepare for the next crisis
Why choose Amundi?
All but passive: Not only active managers walk the walk on ESG
All but passive:
Not only active managers walk the walk on ESG
