Why Invest Responsibly?
We can each do more
Many challenges lie ahead of us from a societal and environmental perspective. And that’s where we believe responsible investing can help play a valuable role. Do you ever find yourself asking questions like:
- How can the world become more socially just and climate-friendly?
- How can companies operate more responsibly?
- And what can we do as individuals to support a better world for all of us?
If the answer is yes, there are a number of things we could all do in our daily lives such as live more sustainably, buy more consciously and invest more responsibly.
Aim to start making a difference today
Responsible Investing has always been at the heart of our business because we believe that capital growth and sustainability belong together1. That's why we include social, environmental and ethical considerations into our investment strategies alongside financial ones1.
The three letters of sustainability - ESG
It is relatively well known that the abbreviation "ESG" stands for sustainability. But what do the three letters actually mean – they stand for Environment, Social and Governance. At Amundi, this means our ESG experts examine every investment and every company according to a comprehensive catalogue of criteria.
Environmental aspects can include a firm’s carbon footprint, energy use and waste management. They may also take the company’s compliance with environmental regulations into account. Take a look at some of the things our analysts are looking at:
- the company's carbon footprint
- how efficiently does it use its resources such as energy or raw materials
- what measures does the company implement with regard to water and waste management and the preservation of biodiversity
- the company’s adherence to environmental guidelines
The social component focuses on issues related to a company’s culture and the relationship it maintains with its employees, suppliers and customers. Among others, the list of criteria can comprise of diversity, labour standards and data protection. Our analysts are seeking to find out:
- the status of equality in the company, e.g. in terms of gender, origin or inclusion
- how fair working conditions and wages are
- about occupational safety and health
Governance factors look at the firm’s management team and the way it runs the business. Shareholder rights, executive compensation as well as bribery and corruption. These are only some of the items on the agenda of responsible investors. Analysts seek to know:
- What compliance and control processes are in place?
- How corruption, bribery and money laundering are prevented
- The remuneration and guidelines for managers?
- How are shareholders rights ensured?
Seeking to seize opportunities today for the future
There are new opportunities continuously opening up in the responsible investment space, such as the journey to the Net Zero target through Energy Transition, where projections show that $4tn is needed i.e. investment in clean energy needs to triple2.
Responsible Investing could allow investors to seize opportunities by contributing to making a positive change by seeking to align investments with positive effects for the economy and society.
- You can seek to combine attractive return opportunities with value-based engagement.
- Expand your investment portfolio with sustainable investments.
- ESG risks that can negatively impact the value of your investment could be reduced.
- Seek to promote sustainable restructuring of the economy and society.
Important note: Past performance is no guarantee for the future performance of an investment. Even the greatest possible diversification cannot rule out losses.
At Amundi, we believe that taking ESG criteria into account in our investment decisions is an essential lever in the search for long-term financial performance.
Together with our clients and the companies we invest in, we want to make a positive contribution to a better future. That is why our commitment also aims to motivate the companies we invest in and to support them on their journey towards a more sustainable and climate-neutral economy.
What are the Trends to watch for responsible investors in 2024?
Responsible investing is quickly becoming more mainstream and is gradually converging towards a more standardized and regulated environment. So, to cut through the noise, Amundi has published its 1st Responsible Investment Views, which offers insights on the main trends to watch in 2024 as well as implications for investors.
Responsible Investing in practice
There are many ways to achieve your investment goals and make a positive difference at the same time. Investors can choose a responsible investment fund with a global investment focus, select a designated climate protection fund or invest in a thematic or impact fund. In our investment processes, we take into account important ESG factors such as the carbon footprint of a company, the use of renewable energies or the promotion of equality.
Responsible investing has always been a cornerstone of Amundi's corporate strategy. We were the first signatory and founding member of the UN Principles for Responsible Investment (PRI)* initiative. With over 35 years of experience*, we are one of the leading providers of responsible investment solutions. Not only are ESG criteria systematically embedded in our investment processes, but our actively managed open-ended portfolios now aim to achieve an ESG objective alongside a financial objective.
*Including Pioneer Investments, which was taken over by Amundi in June 2017
Find out more about our range of responsible investment solutions
Impact Investing ESG Improvers Net Zero
Sources:
1 https://about.amundi.com/our-esg-approach
2 https://www.undp.org/energy/our-work-areas/energy-transition
Important Information
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of end of 17 April 2023. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: October 2023
DOC ID: # 3131825