Investing in Climate: Choosing Fund Managers Wisely

In 2022, Responsible Finance Week took place from September 29 to October 7. This is the highlight of the French place on the theme of responsible investment⁽¹⁾. Its objective is to raise awareness and mobilize all stakeholders in favour of making finance contribute to building a more sustainable future, whatever the forms: crowdfunding aimed at a societal impact, Solidarity Finance, Socially Responsible Investment (SRI)⁽²⁾, etc. In this article, we focus on the impact that individual investors can have through their management choices, and primarily, when choosing their asset manager.

Climate change: what levers, at the individual level?

The hot summer we had this year has made us more aware of the consequences that climate change will have on our lives. The latest report of the IPCC (Inter-governmental Panel on Climate Change) published on April 4, gives us three years to accelerate our climate policies in order to halve our greenhouse gas emissions by 2030.

States, individuals or companies: we are all concerned by this call. As individuals, we have the opportunity to make choices regarding our lives, our consumption, our habits in terms of equipment, transport or heating… And these choices can have a significant impact on our carbon footprint. It is estimated that, through their choices alone, each French can contribute for a quarter to the reduction of emissions goal which is necessary to align collectively with a scenario of temperature increase of less than 1.5° by 2100⁽³⁾. Among existing levers of action, there is little mention of the management of one’s savings…

Acting for the climate through my investment choices

According to an Oxfam report⁽⁴⁾, the CAC 40 has a global warming temperature of 3.5°, 2°too high. An edifying figure, even if not all the projection methodologies agree.

There are a number of options for investors interested in participating in the transition to a more sustainable world, including choosing management:

excluding companies in the most carbon-intensive sectors such as coal; Societe Generale Private Banking has implemented this criterion for all of its management solutions;
investing in companies that, although still highly emitting, are working to move their business model quickly, transparently and by measuring the efforts made;
investing in companies aiming for a beneficial impact on the climate, developing solutions to fight or adapt to climate change; for example, climate impact funds.

The investor will also be able to check with his manager whether he has made climate commitments.

The Net Zero Asset Managers Alliance: asset managers committed to the climate

Created in 2020, the Net Zero Asset Managers Initiative (NZAM) alliance brings together asset managers from around the world, committed to achieving net zero greenhouse gas emissions by 2050 in line with global efforts to limit global warming to 1.5°. It has 273 signatories and represents over $61 trillion in assets under management⁽⁵⁾.

The first private bank to offer management under mandate labeled ISR (2021) and committed for years in favour of responsible investment, Societe Generale Private Banking has just joined the NZAM alliance, through the two management companies of Societe Generale, SG 29 Haussmann⁽⁶⁾(in France) and Societe Generale Private Wealth Management⁽⁷⁾ (in Europe). The fact of belonging to such a group can also guide investors in the search for sustainable and responsible solutions in the selection of their managers.

We invite you to contact your Private Banker to learn more about our responsible management solutions.

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⁽¹⁾Responsible finance refers to the various solutions the purpose of which is both the search for financial profitability and an environmental, social or societal impact.

⁽²⁾ A Socially Responsible Investment is an investment that incorporates ESG criteria, while aiming for economic performance.

⁽³⁾Carbon4 report, “Doing its part”, 2019

⁽⁴⁾Source: Oxfam / Carbon4 Finance report – Climate: CAC degrees too high, March 2021

⁽⁵⁾ As of May 31, 2022, source: www.netzeroassetmanagers.org

⁽⁶⁾Approved by the Autorité des Marchés Financiers in 2006, SG 29 Haussmann, a subsidiary of the Societe Generale group, is the portfolio management company dedicated to managing the assets of Societe Generale Private Banking France’s clients.

⁽⁷⁾SGPWM is a management company authorised in Luxembourg by the Commission de Surveillance du Secteur Financier (“CSSF”) with its head office located at 283 Route d’Arlon, L-1150 Luxembourg, and subject to Chapter 15 of the Luxembourg law of 17 December 2010 on undertakings for collective investment as amended.

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