French pensions provider Ircantec and Paris-based investment boutique CPR Asset Management have formed a strategic partnership to develop new environmental, social and governance (ESG) filters.
The firms claim that these filters are largely overlooked by conventional ESG approaches, and that they will help enhance portfolio risk management.
Ircantec and Amundi-owned CPR AM have been working closely on this since 2016, developing an ESG approach for developed market equities and investment grade European corporate bonds. The factors are based on Amundi Group’s extra-financial analysis for equities and bonds that gives companies ESG rankings and which excludes issuers deemed to contain certain unacceptable risks that traditional ESG analysis would overlook. "As a result, investors are less exposed to issuers likely to be punished by the market."
What makes this approach different is its emphasis on ESG factors deemed ‘weak signals’ by traditional ESG analysis, said CPR AM, such as environmental (energy consumption, water management); social (abour relations, human rights); and governance (board structure, audit and compliance, shareholder rights).
“This innovative approach to analysing ESG risk factors notably allows investors to mitigate sources of ‘market stress’ and will drive our commitment to being responsible investors,” said Arnaud Faller, Deputy chief executive of CPR AM.
The firm plans to roll out this ESG methodology for its different asset classes and thematic investments in the months ahead.
Autonomous and wholly owned subsidiary of Amundi Group, CPR AM has EUR 42 billion in assets under management, and more than 100 employees.