We have decided to move towards a sustainable and responsible approach to investing, or rather, an investment strategy which is geared to medium and long term and which, in assessing businesses and institutions, complements financial analysis with consideration of environmental, social and governance criteria, with a view to creating value for the investor and for society as a whole.
To construct our ESG products, we pursue particularly stringent investment criteria with reference in particular to the environment, then to human and gender rights, and thirdly, to corporate governance practices. The ESG fund portfolios pay close attention to phenomena and risks linked to climate change, control of CO2 emissions, deforestation, transformation of global energy processes, but also the employment conditions of workers worldwide, discrimination on the basis of gender, and the conduct of companies’ senior management relative to the laws and codes of conduct in force.
Within the Group, Mediobanca SGR offers the possibility of investing in Mediobanca Social Impact, an ESG fund for philanthropic purposes, which has been developed in partnership with some of the leading Italian charitable institutions.
Outside of Italy, RAM Active Investments, the leading European systemic asset manager recently acquired by Mediobanca (with a 69% stake), integrates corporate social responsibility into every aspect of its business, including managing investment portfolios.
As an institutional investor, RAM acts in the best long-term interests of its beneficiaries, and assists its clients to leverage the potential of markets to achieve their own targets in terms of ESG impact. Environmental, social and governance (ESG) issues are incorporated into their analysis and investment decision-making processes. In September 2015 RAM Active Investments became a signatory to the United Nation’s Principles for Responsible Investment.
In September 2019, Group fund manager Mediobanca SGR confirmed its commitment to more responsible and sustainable finance by becoming a signatory to the United Nations’ Principles for Responsible Investment.
In 2018, Compagnie Monégasque de Banque launched an ESG Management Mandate for investing in firms and countries which contribute to the development and future of society and are committed to building a better world.
The ESG Management Mandate is based on selecting investment vehicles which meet ESG values using a “best in class” approach.
Cairn Capital is committed to implementing responsible investment principles, based on the conviction that ESG issues are a major factor in terms of risk and financial performance, with the objective of meeting the growing preferences for sustainability issues for clients and investors.
Cairn Capital recognizes that the management of ESG issues forms a fundamental aspect of a business’s long-term success. Its approach is based on a combination of both a negative screening/top-down approach using broad criteria to remove certain companies with specific business activities and a bottom-up fundamental approach to assess an investment against asset-class specific ESG criteria.
Cairn Capital Group Limited is also a signatory to the UN-supported Principles for Responsible Investment (PRI).
MEDIOBANCA SOCIAL IMPACT
Since 1 April 2018 the Mediobanca Social Impact has included ESG-compliant indicators in its regulations, with certification by E. Capital Partners, an independent consultancy with specialization in ethical finance.
It is also a fund which invests for philanthropic purposes, structured in such a way as to ensure each beneficiary has a recurrent flow of income over time, thus enabling investors to support them on an ongoing basis, by investing in a financial product with a low risk level and daily liquidity.
The philanthropic quality of Mediobanca Social Impact consists of the significantly lower management fees compared to the reference market average. This is what allows Mediobanca SGR to withdraw capital from the Fund for the benefit of the recipients without passing on the cost to the investor. The distribution of a share in the equity throughout the product’s duration, allows the beneficiaries to plan activities and projects.
List of beneficiaries adhering to the fund (updated to 1 January 2018):
Education and training
Name of entity
Fondazione FAI – Fondo Ambiente Italiano
Fondazione S. Ambrogio per la Cultura Cristiana
Fondazione Accademia Teatro alla Scala
Health and scientific research
Comitato Maria Letizia Verga
Fondazione Humanitas per la ricerca
Centro Dino Ferrari
Fondazione dell’ospedale pediatrico Anna Meyer Onlus
Social and charitable activities
Fondazione San Patrignano Onlus
Fondazione Banco Alimentare Onlus
Co-operation in development and humanitarian initiatives
Fondazione Amref Health Africa Onlus
Fondazione Mission Bambini Onlus
Fondazione AVSI Onlus-Ong
COMPAGNIE MONÉGASQUE DE BANQUE – ESG MANDATE
Mindful of the Environmental, Social and Governance values, CMB has launched its ESG Mandate.
This mandate invests in companies/countries that contribute to the development and the future of our society and are committed to build a better world.
Contribute to the preservation of our planet for future generations, regarding, among others:
- Greenhouse gas emissions
- Prevention of environmental risk
- Impoverimento delle risorse naturali
Participate in the development of the economy, notably through:
- Financing microfinance vehicles
- Financing associations that contribute to the economy
- Achieving philanthropic activities
Enhance employee satisfaction by:
- Improving working conditions
- Developing career and training plans
- Promoting the quality of internal and external relations
- Respecting equal opportunities
- CMB offers a personalized discretionary mandate that relies on the selection of investment vehicles corresponding to ESG values, with a Best in Class" approach (no exclusion)
- The management team has developed an internal ESG score, applicable to government institutions and public listed companies, based on the following criteria:
Public listed companies
- The key elements of the management philosophy developed in all CMB mandates for almost 20 years is then applied to the universe of the best ESG score securities
- The ESG mandate maintains a strong level of diversification, in terms of asset classes and sectors, and offers an attractive return potential
Characteristics of a balanced ESG mandate1
Selection of a minimum of 12 bonds (Government, corporate, Green/social bonds)
Selection of 25 stocks (Starting universe of 2000 global stocks)
1 ESG score: from 0% to 100% (0% being the highest score)
RAM GLOBAL SUSTAINABLE INCOME EQUITIES1
Screening criteria are applied through a systematic monitoring of companies to identify holdings for further assessment, engagement, and/or exclusion, focusing mainly on the following:
- Illegal or controversial weapons
- Suspected of accounting fraud
- Disregard international norms for labour rights
- Violate human rights
- Environmental damage
- Exposed to sanctions; OFAC list
Analyse & Incorporate
Analyse and incorporate ESG Data and Metrics:
- Strong Governance integration aiming at identifying quality names looking at sound accounting and board practices.
- RAM analyses climate data to filter out stocks with excessive carbon footprint from some its EM fund investment universe.
- Alignment of interest between sustainability of the company and the sustainability of its shareholders
Engage collaboratively with companies and exercise active shareholder stewardship:
- RAM has started a process to perform direct engagement and take part in collaborative engagement.
- RAM applies a voting policy to the full range of its Funds to which RAM acts as investment manager or delegated investment manager.
RAM’s sustainability core is expressed via three pillars: Governance, Transparency & Climate. The firm’s proprietary research has uncovered strong evidence showing that sustainable business practices can help to mitigate risks and enhance the opportunity-set. Driven by transparency, regulations and stakeholder influence, long-term profitability is directly linked with social responsibility, environmental stewardship and sound ethics. RAM’s systematic stock selection engines analyse and identify the most attractive sustainability-themed opportunities across the globe.
RAM is signatory and member of:
1This is the foreseen new name of the already existing strategy; the name is currently subject to the approval of the Commission de Surveillance du Secteur Financier (CSSF) in Luxembourg. The official related documents will also be updated at that moment