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Christian Carrega: "Today, we look at all the asset classes under SRI prism"

According to Christian Carrega, CEO of Préfon, despite the actual fad, looking at all the asset classes under a prism ISR is an additional way to provide security for our affiliate investments.

Article also available in : English EN | français FR

Next Finance: The COP21 has aroused a widespread enthusiasm. What conclusions do you draw and what actions do you intend to pursue?

Christian Carrega: We have not discovered the issue regarding global warming for this event. This issue has reached our board of directors since 2010. First of all, we think that it is an additional way to provide security to our affiliate investments. Secondly, we think that we have a social responsibility regarding financial decisions made by the Préfon Retirement Plan set up 50 years ago.

However, it is true that the media coverage of this event led to a greater implication from French insurance companies with some strong commitments in terms of portfolio decarbonisation.

Today for all asset classes, we see a lot of SRI or ESG investments. Green Bonds, Infrastructure "sustainable" Property "sustainable" low carbon index shares Shares sustainable / ethic, etc ... What is your view on the emergence of these SRI asset classes?

As I said, beware of fad. When we began to investigate the subject 6 years ago, we said that it was quite opaque. Each asset manager has finally its own SRI definition. We have adopted a very pragmatic approach with a simple principle: do not be restricted to any particular asset class and build understandable and interpretable indicators for our clients. Thus since 4 years, we have published ESG indicators on our overall portfolio.

Today we look at all the asset classes under a SRI prism. In 2016, we want to realize a more precise investigative work, with our advice provider regarding the outline of the Green Bonds to avoid anything that might resemble a marketing approach without any reality content.

As a socially responsible investor, do you will build a 100 % SRI asset allocation ?

The Préfon Retirement Plan is an insurance contract managed by CNP Assurances (reinsured by AXA, Groupama and Allianz) and supported by the association. Everyone has a role. The association does not decide the asset allocation and should not intervene in financial decisions. This is the insurance company responsibility. However, as we have built together ESG indicators, we discuss with them. And I want to stress the cooperation between us. We continue, however, to build together a 100 % SRI approach. The Charter, adopted in 2011 by the board - annexed to the financial agreement - reflects this approach. This is a strong commitment.

Most investors now provide a reporting on the "carbon" footprint of their portfolios but there is still no consensus on an appropriate methodology. How do you provide the carbon footprint of your portfolios? Which method is used ?

This is a real issue, the debate is still raging, and a consensus does not exist. This is for this reason that we have not published the carbon footprint. Once again, our approach is pragmatic and co-developped with insurers. Under the guidance of the SRI committee from the Préfon association, we have set up a group working with insurers and our consulting partner (Mirova) to determine the common methodology between four insurers regarding the Préfon Retirement portfolio.

With negative interest rates and a more volatile environment, SRI investor should not be more focused on the long term and increase the holding period of their assets? Is it not appropriate to evaluate asset managers - to whom you provide mandates - on long term performance indicators incorporating risk measures ?

We do not have a logic of mandates. This is a group insurance contract with the responsibilities of insurance companies. Ultimately, they carry the underlying risk. Obviously, a long term vision is essential and we have it. From our point of view, the SRI dimension provides a key security on a long term basis. As such, it should be pointed out the expected changes regarding pension plans in the Sapin 2 Law, currently under discussion at the French parliament.

Paul Monthe , RF , July 25

Article also available in : English EN | français FR

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