Responsible investment: Amundi sets the conversation higher
Amundi is establishing industry-leading best practices to meet the needs of its clients through innovative projects with a finance for today and tomorrow.
After more than a decade of Responsible Investment development, there is no doubt that the idea of ‘responsibility’ within the financial sector has been fully integrated by its actors. It is equally clear to Amundi that one meaningful way of looking at companies over the long term, both in terms of risk and opportunity, is to use the lens of Environmental, Social and Governance (ESG) criteria that express how sustainable a company is from a long-term perspective.
Responsible Investment has been a funding pillar of Amundi since its creation. Amundi considers part of its fundamental fiduciary duty to take into account long-term risks that can affect financial performance. In 2018, Europe’s largest asset manager announced an ambitious three-year action plan to extend its responsible investment approach in terms of both breadth and depth.
Through this action plan, Amundi has set the goal to integrate ESG criteria into 100% of its investment processes.
Amundi has developed a proprietary methodology for ESG analysis involving 36 ESG criteria, all linked to SDGs. Amundi considers the UN Global Compact Ten Principles as a framework for corporates seeking to contribute to achieving the SDGs. These principles remain a strong basis for Amundi’s engagement to better companies’ ESG practices. With that in mind, Amundi uses the UN Global Compact’s Ten Principles as a vital consideration when evaluating an issuer’s ESG practices, integrating the broad spectrum that SDGs offer for ESG analysis.
Alongside this transparent and systematic selection process, Amundi has been evaluating the level of SDG alignment in its current investment products and services. Amundi’s responsible investment offer represents more than €275 billion. A 3-levels SDG relevance framework has been set up to classify funds, based on the level of impact “intentionality”:
• First level: Is the investment strategy connected to the environmental and social issues covered by the SDGs?
• Second level: Is the investment strategy aiming to find environmental and/or social impact?
• Third level: Are the underlying issuers aiming to contribute to the SDGs?
Pushing further its work with issuers and peers, Amundi is committed as an investor to promote positive change in the marketplace as a whole through voting and engagement. As Europe’s largest asset manager, Amundi is in a position to bring considerable change as a shareholder: the asset manager voted at over 2,900 General Meetings in 2018. Through its action plan Amundi has announced it will integrate ESG issues into every General Assembly meetings to develop investors and companies’ thoughts and actions. Focus has been put on climate and remuneration policies in its 2019 voting policy.
By adopting this multipronged approach that systematically makes ESG issues part of the conversation around investment choices, portfolio allocation and relationships with issuers, Amundi is paving a way for all investments to become responsible investment.