Responsible Investment (RI)
At Carmignac, we have a responsibility, as stewards of our clients’ capital and leader in the European fund management industry, to actively invest and engage with companies to pursue long-term capital growth generation. Empowered through our independence and transparency since 1989, we have maintained a long-held practice of investing responsibly. As risk managers, we seek to mitigate as many risk factors as we can identify, which resolutely includes financial risks, but also risks associated with poor governance and shareholder underrepresentation, irreverence to social issues such as health and safety, and environmental challenges, particularly in respect of fossil fuel reserves. Join us in our RI journey by scrolling down this page.
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Our approach and commitment
Present in the investment industry for close to 30 years, we have always committed to being:
Independent: The capital is held entirely by our Directors, Fund Managers and staff. We are not attached to any group, significantly limiting the risk of conflicts of interest with companies in which we invest our assets under management (AUM).
Transparent: Each quarter, we publish a detailed breakdown of our Funds’ portfolios. This report is made available to the general public on our website, which ensures complete clarity of our investment strategies. For most Funds, the audited annual reports include comments on the major ESG issues affecting companies in which we hold an interest.
- Responsible: We exclude investments in controversial activities, such as tobacco and thermal coal producers. As shareholders, we also actively engage with companies, and have recently stated, as a corporate objective, to participate to all possible votes*.
*For more details on our exclusions and voting policies, please refer to the “Policy and Reports” section of this page.
What do E, S, and G mean to us?
Environment: The scope of our interest includes the impact of companies on the environment and their ability to propose services and products which respond to environmental challenges. Environmental issues we consider could include companies’ treatment of carbon emissions, pollution, waste, and water usage.
Social: We focus on monitoring the impact of companies with all of our stakeholders (suppliers, employees, consumers) and the increasing public expectations of social responsibility. Social issues we consider could include all types of employment abuses, staff turnover metrics, diversity, workplace health and safety, income distribution, and product safety.
- Governance: We concentrate on the enhanced value created by companies that encourage governance ethics. Governance issues we consider could include any tendency towards uses of bribery and corruption, governments involvement and impact on management, board independence, executive compensation, and anticompetitive practices.
Affiliations
Always seeking to strengthen our role as a Responsible Investment manager, we are fully committed to act as stewards of our clients’ investments through active participation in affiliations that foster the same values as our firm. Our collaboration with other asset managers within globally recognized organisations, as well as our active membership in the Responsible Investment Committees of Europe's leading fund associations are important actions to help us pursue our goals for climate change mitigation and social progress, but also to contribute to ongoing regulatory consultation and the development of best practices in the asset management industry.
![[Insights] [SRI] Image Affiliations](https://carmignac.imgix.net/uploads/article/0001/12/874330da98966285dbbcee3cdc28a27432bb9d54.png?auto=format%2Ccompress)
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Mainstream ESG implementation
As of 31/12/2019, 92% of our assets under management adopt a mainstream approach to integrating ESG criteria in their investment approach, both in the analysis and the decision-making stages.
*Assets under management excluding funds of funds and mandates.
Fund Managers and Analysts are directly responsible for their implementation and oversight in their portfolios. To this end, they combine proprietary and third-party ESG research with company meetings with the support of the Sustainability team. The integration of ESG criteria into the investment process is based on four stages:
1. Understanding: Incorporating and selecting best responsible practices. Make use of an ex-ante screening tool, MSCI Business Involvement Screening Research and MSCI ESG ratings company research.
2. Integrating ESG criteria: Integration of ESG criteria assessment in the investment rationale and ongoing monitoring. Identifying risk factors and adopting responsible behaviour. Comply with a list of excluded companies and identify potential controversies in our investments and engage on these issues with companies.
3. Committing: Promoting ESG criteria over the long term, especially in our active voting policy.
4. Communicating: Publish our voting and engagement policies and reports on an annual basis. For relevant Funds (92% of our AUM), publish the annual reports with specific ESG related commentary. Publish carbon emissions for close to 40% of assets under management. Provide the Funds’ ESG and Carbon analysis prepared by MSCI ESG analytics’ team when requested.
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SRI funds
We have increased our commitment to responsible investing to offer 6 funds adopting a socially responsible investment (SRI) approach, covering various geographies and asset classes:
- Carmignac Portfolio Family Governed,
- Carmignac Portfolio Grandchildren,
- Carmignac Portfolio Grande Europe,
- Carmignac Emergents,
- Carmignac Portfolio Emergents,
- and Carmignac Portfolio Emerging Patrimoine.
These Funds have been granted accreditations from the Belgian “Towards Sustainability” and the French “ISR” labels, officially validating their commitment to sustainable investing and rendering them more visible to savers across Europe:
![[Insights] [SRI] Table 1 EN](https://carmignac.imgix.net/uploads/article/0001/12/4897c15098b0e23e80cfbc79b5197ad142b27a2c.png?auto=format%2Ccompress)
Countries where each Fund is registered for public distribution are listed in the Fund Processing Passport (FPP) and on our website. For more information on the labels, please visit www.lelabelisr.fr/en and www.towardssustainability.be
For more details on the approach adopted by each Fund, we invite you to read this document and access the links below.
Carmignac Portfolio Family Governed:
Carmignac Portfolio Grandchildren:
Carmignac Emergents:
Carmignac Portfolio Emergents:
Carmignac Portfolio Grande Europe:
Carmignac Portfolio Emerging Patrimoine:
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Policies and reports
Exclusion policy
Business norms – All our Funds’ investment universes are screened and exclude companies contravening global norms on environmental protection, human rights, labor standards, and anti-corruption, based on the ISS Ethix Norm-Based Research*.
Business activities – Carmignac screens and excludes all investments involving controversial weapons such as anti-personnel mines, cluster munitions, chemical and biological weapons, depleted uranium weapons and nuclear weapons. In line with Carmignac’s own convictions, investment restrictions are extended to tobacco and thermal coal producers** for all funds.
Please see below our full exclusion policy:
*ISS-Ethix Norm-Based Research evaluates corporate adherence to global norms on environmental protection, human rights, labour standards, and anti-corruption. Global norms are set out in international initiatives and guidelines such as the OECD Guidelines for Multinational Enterprises, the ILO Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, the UN Global Compact and, more recently, the Guiding Principles on Business and Human Rights. **Thermal coal producers with over 10% revenues from thermal coal extraction are excluded in all our funds.
Voting policy and reports
We have partnered with Institutional Shareholder Services (ISS), a leading provider in Corporate Governance and Proxy Voting Analysis & Processing. While benefiting from ISS’s global reach and their comprehensive governance research and recommendations, we maintain total control of our voting choices. We have adopted ISS’s sustainability guidelines.
Below some information on our voting policy and reports:
In the process of reviewing its Engagement Policy in order to align it with the Shareholder Rights Directive (SRD II) and its effective transposition in the relevant countries that occurred along 2019, Carmignac confirms that its Voting Policy will soon be incorporated in its Engagement Policy, as a pillar of its Engagement Framework. Therefore, the reporting of votes for the 2020 proxy voting season would be also incorporated within the Engagement Report for relevant calendar year.
Engagement policy
Carmignac is committed to engaging with companies in which it is invested and implementing effective stewardship. Our Engagement Policy, which explains our active engagement approach to investee companies, can be found below. A more complete description can be found in the Funds’ respective annual reports.
In the process of reviewing its Engagement Policy in order to align it with the Shareholder Rights Directive (SRD II) and its effective transposition in the relevant countries that occurred along 2019, Carmignac confirms that its Voting Policy will soon be incorporated in its Engagement Policy, as a pillar of its Engagement Framework. Therefore, the reporting of votes for the 2020 proxy voting season would be also incorporated within the Engagement Report for relevant calendar year. Furthermore, it will address additional factors such as how we monitor the strategy, financial and non-financial performance, risk and capital structure of our investee companies (where applicable) and also how we cooperate with other stakeholders and coordinate actions. Lastly, in accordance with our Conflicts of Interest Management Framework, Carmignac 2020 Engagement Policy will address how in this strengthened framework, Carmignac manage actual and potential conflicts of interest arising from this updated Engagement Framework.
Transparency codes
Responsible investing (RI) is an essential part of the strategic positioning and behaviour of Carmignac. We have been involved formally in Responsible Investing (RI) since 2012, through the signature of the United Nations backed Principles for Responsible Investment (PRI) and welcome the European Sustainable and Responsible Investing Transparency Code. These are our second statements of commitment for the European and Emerging Market funds and our first statement for the Global funds, Carmignac Portfolio Grandchildren and Carmignac Portfolio Family Governed. Our full responses can be accessed via the links below.
Climate policy and carbon report
Carmignac has made climate awareness a formal component of its investment process, joining the efforts undertaken as part of the Paris Agreement and applying the Energy Transition Rule No 173 of the Monetary and Financial Code of the French government (as per article L533-22-1) on carbon reporting and ESG implementation across the funds.
As of 31/12/2019, €12.6 billion or 38% of our assets under management (AUM) are measured and monitored in terms of carbon emissions(1). The carbon footprint of these investments was 63% lower than their reference indicators per million EUR invested as per MSCI Carbon Analytics data.
(1) Carmignac Funds for which carbon emissions are measured and monitored. (2) The reference indicator of each Fund is hypothetically invested with identical assets under management as the respective Carmignac equity funds and calculated for total carbon emissions and per million Euro invested. Source: MSCI Carbon Analytics, 31/12/2019.