sustainable investment

Transparency

transparency

Our commitment to transparency :
With a culture of transparency and information sharing, we strive to encourage and foster a clear, consistent, comparable dialogue on ESG issues taking into account regulatory, and market-related implications. We focus on establishing a better context and more transparency for ESG investing in line with regulatory and market-specific requirements.

The need for transparent and intelligible ESG information

In accordance with the requirements set out in the Sustainable Finance Disclosure Regulation “SFDR” (2019/2088), and in order to best meet the needs of our clients, we provide them with in-depth ESG reporting. The objective is to ensure corporate transparency on Environmental, Social and Governance aspects in order to better assess the management of these risks. The monthly reporting produced by ODDO BHF Asset Management provides our clients with a quantified assessment of the portfolio in terms of ESG criteria on the following aspects:

  • The average ESG rating of the portfolio, compared to that of the benchmark index.
  • The carbon footprint of the portfolio and its benchmark (measured in tons of CO2 emitted per million euros of revenue).
  • The main ESG positions.
  • ESG ratings in detail.
  • Impact indicators.
  • Beyond the regulatory and non-regulatory imperative (Article 173 of the Law on Energy Transition for Green Growth in France / Décret 29).

Illustration of impact indicators for one of our funds incorporating ESG criteria.

 Portfolio Benchmark UN SDGs
Feb 2021 Feb 2020 Coverage Feb 2021 Feb 2020 Coverage
Environment  
Fossil fuel exposure - - 99.5% 0.0% 0.0% 96.1%
Carbon solution exposure "green part" 35.5% 30.4% 99.5% 29.6% 29.0% 96.1%
Social  
5Y Employee growth (%) 3.2% 2.5% 90.7% 2.8% 2.5% 80.6%
Female Executives 17.3% 15.5% 87.4% 15.2% 15.5% 83.0%
Governance  
UN Global Compact signatory 69.1% 75.8% 64.4% 73.1% 74.0% 66.8%
Board members' independence 71.8% 73.7% 86.7% 72.4% 72.1% 78.6%
Human Rights  
Implementation of Human rights policy 99.0% 99.4% 65.0% 98.7% 98.8% 68.0%

Climate reporting has become an essential part of an ESG integration investment strategy. Beyond the regulatory and non-regulatory imperative (Article 173 of the Law on Energy Transition for Green Growth in France), developing relevant indicators and quality reporting also helps to raise awareness among management teams of the financial risks of climate change and also encourages them to allocate more investment flows toward the sectors and companies that contribute positively to the transition to a low-carbon economy.

Labels: a guarantee of transparency

Today, there is a wide range of funds that incorporate ESG criteria, and it is sometimes difficult to compare them. To offer some guidance, there are several independent ESG labels, each of which meets strict requirements and provides objective standards, credibility and transparency for investors looking for ESG solutions.
At ODDO BHF AM, more and more funds meet the high requirements of leading independent ESG labels. We favour 4 independent labels. The awarding of labels recognizes our funds’ ability to achieve true ESG integration in their investment process. For these funds, an external auditor conducts regular audits to ensure compliance with these objectives.

Label Name Created in Country Key features
ISRISR2016 France
  • ESG assessment of at least 90% of issuers in the fund portfolio.
  • At least 20% reduction of the investable universe based on ESG criteria, or average ESG rating of the portfolio higher than that of the starting universe.
  • Inclusion of ESG criteria in the investment process.
FNG-Siegelfng2015 Germany
  • ESG assessment of 100% of the portfolio.
  • Sector exclusions (coal, nuclear, conventional & unconventional weapons, unconventional oil & gas, tobacco).
  • Points system leading to 3 levels of responsible investment, expressed in stars.
  • Violations against UN Global Compact.
GreenFinGreenFin2016 France
  • Investments in "green" themes related to ecological transition.
  • Sector exclusions (fossil fuels, nuclear).
  • At least 75% of Green bonds in portfolio, green bonds must respect the list of green activities of the label, controversy monitoring.
Towards Sustainability (Febelfin)Towards Sustainability2019 Belgium
  • ESG assessment of 100% of securities, with temporary derogations.
  • Sector exclusions with evolving thresholds (coal, energy production from non-renewable sources, conventional & unconventional weapons, conventional & unconventional oil & gas, tobacco).
  • Lowering of thresholds in alignment with the Paris Agreement.