Working towards responsible finance

We believe that taking environmental, economic, social, societal, governance and management issues into account in our Group investment policy contributes to the balanced and sustainable development of the economy and society.

A responsible investment policy for all of our assets under management 

 

Since 2012, we have adopted a responsible investment charter that sets out the guiding principles for our financial services in their activities. It puts forward three complementary principles that translate our vision into concrete action:

  • Analysing and taking into account ESG criteria in investment decisions.
  • Close follow-up and ongoing discussions with the companies that we finance in order to promote ESG management best practices.
  • Excluding financial asset portfolios which have activities or management styles that do not correspond with this principle.

 

Som issues that are priorities for all of the Group portfolios have been enhanced, resulting in thematic policies: 

  • A voting policy and general principles on the governance of listed companies
  • Exclusion principles for investments in countries and territories that contribute to financial fraud 
  • A climate policy

 

The responsible investment charter and its thematic chapters set out our responsible investment policy. Regularly updated by the Group’s Executive Committee, it is applicable to all investments and covers all assets under management.

Every core area of activity and financial subsidiary of the Group applies it according to its social goals, its portfolio management and the different types of assets that are managed.

 

 

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Action plan to increase our positive impact on society

In addition to these long-term processes, an overarching five-year plan has been set up to incorporate the sustainable development goals into our financial management processes. Its aim is to quantify and increase the results of all of our core activities and support functions in our mission to reduce regional and social division. This plan guides and boosts our RI policy with regard to our financial activities. Each of our teams has established special mechanisms to improve their positive impact through the SDGs most relevant to their activities :

 

  • Increase the thematic funding contributing directly to one or more SDG
  • Improve the analysis and integration of certain societal issues in our investment decisions.
  • Increase shareholder engagement in order to encourage companies and communities to expand their contribution to the SDGs.
  • Introduce further restrictions for certain activities that are at odds with the SDGs.
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Structured and transparent management 

 

A tool and an organization style that ensures the follow-up and management of this policy’s implementation and updating within our investment activities. The implementation of this policy is presented in the Annual Report on Sustainable Development and the Responsible Investment Report which sets out our responsible investment practices. This report is in line with transparency requirements set out in French law relating to energy transition for green growth, and our PRI Transparency report.

 

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ESG Incorporation

 

When making management decisions, we take into account all the financial and extra-financial factors that impact the financial value of our investments, all while considering their capacity to make a positive contribution to society and the real economy.

Before making investment decisions, we use ratings from recognized extra-financial agencies, as well as internal ESG evaluation tools (evaluation grids, internal scoring, ESG due diligence questionnaires) in order to formalize the assessment of companies’ ESG performance and risks. This documented analysis is carried out and used in investment activities. For certain core activities, this analysis is incorporated into the financial valuation of the investment.

At the same time, ESG risks, particularly those related to climate risks and tax liability, are incorporated into our financial risk assessment tools and are analyzed, alongside other risks, by these specialized teams.

This ESG analysis is one of the elements systematically presented to the Investment Committee and which is regularly updated during the investment process. There are stringent rules (minimum thresholds, exposure limits) for certain activities.

 

 

Shareholder involvement

 

ESG issue management does not stop once the decision to invest has been made. Rather, it continues throughout the investment process in order to promote the adoption of best practices in terms of society, the environment, ethics and governance. There is regular dialogue between companies of all sizes and through systematic voting in the companies’ general assembly, in which we are shareholders. Through our voting policy and our shareholder involvement initiatives, we are committed to building constructive, long-term relationships with companies.

 

 

Constructive dialogue

 

We aim to systematically address ESG issues in meetings with the executives of listed companies in order to encourage them to make progress in managing specific issues identified during investment, or that arise during ownership. In the case of unlisted companies, this dialogue is based on regular ESG performance monitoring through specific annual questionnaires. In the case of listed companies, issues are monitored every quarter and the ESG analysis is regularly updated.

This constructive dialogue also involves working with external management companies, to whom we entrust capital, to encourage the implementation of demanding responsible investment practices.

We make a particular effort to monitor and discuss governance and climate issues, in accordance with our corporate governance principles for listed companies and our climate policy. Some of these commitments can be carried out alongside other financial actors, as is the case with the international initiative Climate action 100+.

 

 

 

A robust voting policy

 

100% of votes

 

Caisse des Dépôts encourages the emergence of transparent, responsible and balanced governance structures.
We systematically exercise our voting rights during general assemblies with the companies in our portfolios. We oppose resolutions that go against our voting policy and we can vote in favour of external resolutions that are not supported by the company board of directors. Our position on each resolution is decided through close dialogue with our investment teams, following the internal analysis of resolutions in accordance with an internal voting guide that sets out detailed rules.

 

 

Promoting a sustainable financial system 

 

Alongside other major investors, Caisse des Dépôts and its financial subsidiaries are also signatories of external agreements made through international initiatives, such as the Principles for Responsible Investment (PRI) and the declaration of the United Nations Environment Programme Finance Initiative (UNEP-FI), and national initiatives, such as the Charter of Public Investors for SDGs. 

The Group also shares and promotes best practices at the Responsible Investment Forum (RIF) and takes part in work on responsible finance carried out by professional associations such as AF2I and Finance for Tomorrow Finance for Tomorrow by Paris Europlace.

 

 

Novethic: accelerating sustainable transformation

 

Created in 2001, Novethic guides financial institutions, companies and citizens in their sustainable transformation, particularly through its media activity and its independent research center. 

Novethic is a pioneer in the labelling of responsible investment funds in Europe and it has assisted financial institutions and savers respectively in their development and choice of responsible investment products.  Today, Novethic is an auditor of the ecological and energy transition funds label, the GREENFIN label.  It complements this service by offering training for financial decision-makers.