European asset manager Amundi has adopted an ambitious three year action plan to increase its commitment to responsible investment.
The plan will see ESG (environment, social, governance) analysis integrated across all Amundi funds within three years, while Shareholder engagement and voting at company AGMs will systematically include ESG analysis. In addition, Amundi will develop ESG advisory services for its institutional clients , and will double the number of initiatives promoting investment in projects with an environmental or social impact. Investments in the social and solidarity economy will also be doubled.
Responsible investment has always been one of Amundi’s founding principles. Amundi believes that when putting their savings to work, investors must consider the impact on society in general. The company’s policy has been to integrate ESG criteria into its asset management and undertake specific initiatives to promote ESG investment, particularly in environmental investment.
In this regard Amundi currently has EUR280 billion (19 per cent of its total assets) invested in three areas:
• Applying ESG criteria in addition to traditional financial analysis. A dedicated Amundi team gives (currently 5500) issuers an ESG rating from A to G. This rating may mean certain stocks are overweighted or underweighted in portfolios, or excluded completely. It gives company managements the incentive to improve their environmental and social impact. Assets under management incorporating this policy represent EUR270 billion.
• EUR10 billion of dedicated funds with targeted investments, particularly to tackle climate change or finance energy transition. Examples include EUR4 billion invested in low-carbon index funds in partnership with MSCI, EUR2 billion invested in green bonds, largely from emerging countries in partnership with the World Bank, and EUR500 million invested in energy transition through a JV with EDF.
• Support for social and solidarity economy companies through a dedicated EUR200 million fund. This responsible investment approach leverages work from the Medici Committee, a think tank which contributes to the Group’s reflection on the responsibility of economic stakeholders and investors amid today’s global challenges.
Based on this experience, Amundi is launching an ambitious action plan to extend its commitment to responsible investment.
Enterprises and organizations (cooperatives, mutual benefit societies, associations, foundations and social enterprises) which produce goods, services and knowledge that meet the needs of the community they serve, through the pursuit of specific social and environmental objectives and the fostering of solidarity.
• By the end of 2021, Amundi’s ESG policy will apply to 100 per cent of its fund management and voting practices. Extra-financial analysis using ESG criteria will be extended to all fund management, both active and passive, wherever technically possible. All actively managed funds will be required to offer ESG performance above the ESG rating of their benchmark indices or universes. Asset classes currently poorly served by responsible investment, particularly emerging markets, high-yield or small and mid-cap stocks, will fully incorporate the Amundi ESG analysis. Open funds incorporating ESG that are available to retail investors will, as a result, increase to around EUR250 billion over the next 3 years. ESG assets under passive management, will double to at least EUR70 billion. A new range of SRI ETFs has been launched. ESG performance will also be systematically taken into account by Amundi in its shareholder dialogue with issuers and its voting policies.
• Amundi will strengthen its ESG advisory activities for its institutional clients to support them in their development initiatives.
• By the end of 2021, Amundi will strengthen initiatives related to the environment and with a strong social impact. The aim is to double the amounts invested in these initiatives, by increasing thematic funds to EUR20 billion.
• Amundi’s commitment to solidarity-based enterprises will also be strengthened. Investment in the social and solidarity economy, which today amounts to EUR200 million, will reach EUR500 million.
Yves Perrier, Chief Executive Officer, Amundi, says: “Since its creation, Amundi has chosen to make responsible investment one of the company’s founding pillars. This was based on two convictions: the responsibility companies and investors have to society, and that this is a guarantee of long term financial performance. This three-year plan extends our commitment to responsible investment and anticipates the expectations of our clients.”
Stanislas Pottier, Amundi’s Chief Responsible Investment Officer, adds: “Amundi has built a solid and recognised ESG analysis process and launched innovative initiatives to promote investments with powerful environmental and social impact. We now aim to make ESG criteria mainstream in investment processes and voting policies.”