Economic, societal and climatic changes are today forcing all stakeholders (investors, issuers, regulators, public authorities, NGOs, etc.) to take responsibility and collectively become aware of sustainable investment policy.
Since the creation of Trecento Asset Management in 2011, the analysis of issuer governance aspects has been an integral part of the fundamental analysis methodology. In order to deepen its approach as a long-term responsible investor, Trecento AM decided in 2015 to formalize its approach in this direction by becoming a signatory to the Principles for Responsible Investment (PRI), which implies in fact a commitment to providing information and to taking ESG factors into account in the investment selection decision-making process. The PRI complement the United Nations Global Pact, which invites businesses to integrate a range of universal principles relating to human rights, labor law, the environment and the fight against corruption into their activities and strategies.
In 2019, Trecento AM decided to strengthen its approach to ESG integration and analysis in order to offer socially responsible and SRI-labelled savings products to its clients. Taking ESG criteria into account in the selection of investments helps to identify and minimize the risks linked to each issuer that may translate into operational, reputational (or other) risk potentially materializing into financial risk. Trecento AM’s SRI approach aims to combine the financial and extra-financial performance of issuers not only with the goal of creating value, in the best interest of our customers, but also of contributing to sustainable development by encouraging best ESG practices. This approach includes a commitment policy aimed at influencing issuers to take ESG criteria into account as part of their development strategy through dialogue with companies, a voting policy at general shareholders’ meetings and support for initiatives working to improve the integration of ESG criteria by issuers.
The Trecento AM team was therefore mobilized to implement and define an SRI/ESG strategy for the Trecento Santé SRI and Trecento Robotique SRI funds, in compliance with current French regulations in force and with the rules of the SRI Label (French state label). On 22/01/2020, the French Financial Markets Authority (the Autorité des Marchés Financiers) approved the SRI transfer of the Trecento Santé fund (for an effective date of 27/02/2020 on which the fund was renamed Trecento Santé SRI) and the SRI transfer file for the Trecento Robotique fund is in progress.
Trecento Santé SRI and Trecento Robotique SRI have obtained the SRI Label in March 2020. Trecento AM’s approach as a responsible investor is mainly based on the following 4 policies:
- Sectoral and normative exclusion policy (in French)
- ESG integration policy and investment selection (in French)
- Voting rights exercise policy (in French)
- Commitment policy (in French)
Trecento AM’s ESG Committee defines and supervises the application of the management company’s responsible investment policies. It also aims to rule on investment decisions concerning controversial issuers, on the ESG rating of issuers, on the ESG evaluation model and its areas of improvement/development.
Our SRI approach responds to the SRI Transparency Code, designed and approved by the FIR, AFG and Eurosif, in order to provide all of its customers with transparent information on its SRI (Socially Responsible Investment) management. You can download the Trecento AM Transparency Code by clicking on this link.
The SFDR regulation was adopted by the European Union in 2019 for an effective date of March 10, 2021. It concerns the publication and transparency of information on sustainability in the financial services sector. The regulation therefore covers the management company Trecento AM and all its UCITS/FIA.
The SFDR regulation classifies funds into 3 product categories which imply a different level of information:
– Funds without a sustainability objective (so-called “Article 6” products of the SFDR regulation);
– Funds promoting environmental or social characteristics, but without a sustainable investment objective (so-called “Article 8” products of the SFDR regulation);
– Funds with a sustainable investment objective (so-called “Article 9” products of the SFDR regulation).
You can find the Trecento AM document on the SFDR/Disclosure regulation by clicking here.
Prior to the ESG integration and investment selection stage, Trecento AM adopted a company exclusion policy based on two different criteria:
- Normative exclusion: criterion based on the elimination from the SRI investment universe of listed companies that do not respect the main international standards, notably the 10 principles of the United Nations Global Compact.
- Sector exclusion: criterion based on the elimination of certain listed companies whose main activity is deemed by the management company to be incompatible with the principles of socially responsible investment. Trecento AM publishes on its website www.trecento-am.com the list of sectors and companies concerned by this sectoral exclusion policy. By way of example, it concerns the arms industry and more specifically the companies involved in the supply of equipment or parts and components intended to produce controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological, depleted uranium weapons).
You can consult our complete sectoral and normative exclusion policy by clicking on this link. It includes our list of companies excluded for sector/normative reasons as well as information and details on the choice of source organizations.
Socially responsible investing aims to reconcile economic performance with social and environmental impact by financing companies and public entities that contribute to sustainable development regardless of their sector of activity. Trecento AM has therefore defined an ESG integration policy which includes taking ESG criteria into account in the selection of investments from the Trecento Santé SRI and Trecento Robotique funds. This allows the management team to:
- identify and, where appropriate, minimize the risks linked to each issuer which could result in an operational, reputational or other risk which in the long term would turn into a financial risk impacting the creation of value for investors
- also identify companies with best environmental, social and governance practices
- propose responsible investment solutions in line with the growing demand of its clients and, to a lesser extent (given the size of the management company’s assets) to participate in improving the practices of issuers, notably with regard to the financing of the energy transition.
You can consult and download our ESG integration and investment selection policy by clicking on this link
Trecento AM has modified its exercise of voting rights policy to accompany the strengthening of its responsible investor approach. This allies Trecento AM’s SRI/ESG approach with the recommendations of the French Association for Financial Management (the Association Française de la Gestion Financière). Trecento AM believes in effect that the promotion of good corporate governance practices among issuers and participation in the social life of portfolio companies are the responsibility of shareholders and contribute to the improvement and strengthening of governance and ESG practices.
The objective of the exercise of voting rights policy is to express, through the act of voting an independent opinion, in line with Trecento AM’s commitment and SRI policy, individually or collectively (in concerted action, in accordance with the rules in force in each country) and in the interest of the holders.
The management company’s policy for exercising voting rights is also adapted to its size and financial means.
For more details on our policy for exercising voting rights and our principles for voting at general shareholders meetings, you can consult and download our policy and reporting for exercising voting rights by clicking on this link.
Also find all of our votes at general shareholders meetings by clicking on this link.
Trecento AM has formalized a shareholder commitment policy which consists of an investor encouraging issuers to integrate ESG criteria as part of their development strategy and encouraging them to improve their practices over time.
Trecento AM’s commitment policy has a threefold objective:
- Engage in a constructive and long-term dialogue with issuers on the importance of integrating ESG criteria into the framework of their business and development strategy;
- Encourage issuers to be transparent and to publish their approaches and policies in terms of corporate social responsibility (CSR) as well as extra-financial performance;
- Discuss with issuers in order to identify and assess company actions taken and the progress made by the issuer with regard to one or more specific ESG indicator(s) or one or more controversy(ies).
The scope of our commitment policy extends to all companies in the Trecento Santé SRI and Trecento Robotique funds, as well as to all companies in the Healthcare and Robotics investment universes likely to enter the portfolio following a fundamental and extra-financial analysis.
Our commitment policy is structured around 3 areas of action: dialogue with issuers, market initiatives and strengthening the voting policy.
You can consult and download our commitment policy and reporting by clicking on this link.
ESG criteria and indicators are monitored over time for the Trecento Santé SRI and Trecento Robotique funds (in comparison with their respective investment universe).
Our objective is to measure and calculate these ESG and Climate impact indicators at least once a year. These will necessarily be measured at the end of each financial year and will be the subject of a commented report in the annual management report of each of the funds.
You can consult and download our ESG and climate performance reporting by clicking on this link.
Funds not included in our SRI approach
Trecento AM also manages employee savings plans for hundreds of employees from different companies. Employee savings plans are already an important social initiative in themselves.
None of the FCPEs managed by Trecento AM has an outstanding amount of more than 500 million euros, which explains why Trecento AM does not publish a report for these funds setting out the methods for taking ESG information into account.
However, the management company undertakes, when the investments of the FCPEs are not made directly in stocks or bonds, to select external funds (UCITS or FIA) with SRI, ESG or solidarity labels.
Trecento Asset Management was one of the first signatories to the PRI in France (2015). The Transparency report is available on the website.