Understanding Responsible Investment #6 - Selection of sustainable funds
Dorothée Chapuis: Hello everyone and welcome to the sixth episode of our "Understanding Responsible Investment" podcasts series. I am Dorothée Chapuis, Head of CSR for Société Générale Private Banking Luxembourg, Monaco and Switzerland,g and I am with Gilles Guesdon, in charge of the external funds offer for Société Générale Private Banking.
Dorothée Chapuis: Gilles, I want to invest in a responsible and sustainable way and I discovered in previous episodes that there are different approaches, it's not always easy to find your way around!
Gilles Guesdon: Europe is the most dynamic region in the world in terms of innovation and sustainable investment and from one country to another, the practices for taking into account Environmental, Social and Governance (ESG) criteria are varied. In this context, it is true that benchmarks are needed. It is for this reason that European regulators are going to reinforce the expectations vis-à-vis financial institutions in a major sustainable finance project. France did not wait: the French financial markets authority published in early 2020 the best practices that a fund must respect when it qualifies as a sustainable, responsible, SRI or any other sustainable development related term. What can be said is that many financial institutions today offer robust solutions that can be trusted.
Gilles Guesdon: As far as Société Générale Private Banking is concerned, you know that we are an open architecture bank, which means that we select the best solutions for our clients, proposed by different asset managers in the market, with the help of our expert from Lyxor, the asset management company. First of all, I would like to point out that our selection is based primarily on financial criteria, including the size of the fund, the experience of the management team, the reputation of the institution and the performance history... These financial criteria are of course applied when it comes to selecting a sustainable fund. In addition to these financial criteria, we will look at additional criteria such as whether the management company has signed the United Nations Principles for Responsible Investment and its associated rating. The aim is to understand which responsible management policy is applied, the exclusions practiced, the proportion of responsible assets in the total assets under management, and the means implemented. We check the existence of a voting and commitment policy and whether the fund has an SRI label. These elements are part of a questionnaire that we send every year to the various partner management companies. Finally, we look at the elements indicated in the extra-financial reporting of sustainable funds and in particular the data on carbon emissions.
Dorothée Chapuis: More specifically Gilles, how do you choose sustainable funds?
Dorothée Chapuis: Perfect, I have a better understanding of your selection process for sustainable funds. What does it look like so far?
Gilles Guesdon: As we speak, i.e. in July 2020, we have referenced 25 sustainable funds, 19 equity funds, 6 bond funds and 3 money market funds. To this list, we can add the sustainable ETFs of our partners, including Lyxor. And I believe that the topic of sustainable ETF funds will be the subject of a dedicated podcast, so I won't go into detail on this point.
Dorothée Chapuis: Thank you Gilles, we have understood how Societe Generale Private Banking selects external sustainable funds. The question remains as to how to determine one's profile as a responsible investor... That's what we will discover in our next podcast. Thank you and see you soon!
This podcast is part of a series of episodes proposed by Societe Generale Private Banking to understand responsible investment. It is available on the Spotify and Apple Podcast streaming platforms via the "#Private Talk by Societe Generale Private Banking" program and on our website www.privatebanking.societegenerale.com. Feel free to subscribe to be notified when the next episode is released and to spread the word.
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