THE BASICS

Putting responsible investing into practice 

The conviction that companies and investors have a social responsibility and that ESG is a driver of long-term growth, has driven Amundi’s mission for over a decade, chief responsible investment officer Elodie Laugel explains.

Responsible investing has been a massive sea change in finance, what do you think has driven that?

The change is part of a much wider shift in society. We now understand that vital issues like global warming and social inequality affect all our lives. We can see the effects of global warming around us and in the news, and it's also clear that growing inequality weakens economies and the social fabric. There's a widespread recognition that we have to make changes. But the challenges are big. The question for savers is, how can I put my savings to feed a virtuous cycle between a sustainable real economy and my investment goals?

How does Amundi help with that?

We want to give people a choice of how they can invest responsibly, and that comes down to making sure the necessary range of products is available. Putting that into practice means we have to systematically integrate ESG criteria, wherever it is feasible, in our investment processes, and to constantly innovate to find new ways of broadening the Responsible Investing spectrum.

The trend is certainly positive and the Responsible Investing market is experiencing strong growth, but we believe that it is still too narrow to address both the financing needs of sustainability and the responsible savings goals. We need a “match” between Financing and Savings so that when people are looking to put their savings to work, the right responsible and sustainable solutions are there on the shelf. It's about pushing the frontiers of investing, sourcing projects, creating new investment solutions to support financing of specific sustainable initiatives and that's something Amundi has done throughout its history. In parallel, we have to communicate with investors, and tell them concretely how their money is used and is contributing to a more sustainable economy and growth , and in that way is used for creating a better world. We want them to know and experience that what they do with their investments can have a real impact in shaping a better future. We want them to know and experience that what they do with their investments can have a real impact in shaping a better future. 

Our role is to expand the responsible offer so that individuals’ savings feed a virtuous cycle between a sustainable real economy and investment goals. Designing Responsible investment solutions as well as accompanying companies are the two aspects of our drive towards sustainable economic growth.

ELODIE LAUGEL,
Chief Responsible Investment Officer

You have specific vehicles to do that. But do you think finance can be reformed entirely?

That’s the other side of our role as responsible investors. We call it ‘mainstreaming’ of responsible investing (RI) factors. We will use RI criteria across all our active portfolios in our investment process by 2021. If every other investor were to follow the same approach, the effects would be enormous. Through making it “normal” companies get the signal that by not following responsible behaviour, capital will be reallocated to companies with better practices. At a fund level, we have attached to these “mainstreaming” ambitions a tangible outcome with an expected E (environmental), S (social) and G (governance) score above the one of its reference investment universe. With such strong commitment, we are taking the lead in this movement across all our portfolios and we hope the rest of the investment industry will follow.

Have you already pulled money out of companies that don’t meet your criteria?

Yes, absolutely. Responsible investing was one of our founding pillars ten years ago, we’ve been doing it since the start. But in fact, we believe that pulling money out – or ‘divesting’ to use the technical term – is a last resort. We want to create long-term, structural change. Obviously, we have an exclusion policy that is systematically applied for some controversial activities, or for companies that have a business model that is too exposed to sectors that go against sustainability principles. But for the remainder, in general, we believe it is better to have a dialogue with company management to explain where they’re falling short and try to build a roadmap for the future. As Europe’s largest asset manager, it is also our responsibility to influence the strategies of companies, especially when we are among their main shareholders. We are also here to accompany them in their transition.

IMPORTANT INFORMATION

Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2020.. 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: 30 September 2020

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