CARMIGNAC’S APPROACH
Our approach
How we view sustainable investment
Carmignac offers a broad range of sustainable funds which benefit from our independent and active management style to align our investors’ sustainable goals to our own.Explore our fundsOUR ESG THEMES
Climate
We believe that climate change poses an existential threat and is a source of systemic risk for our economies and the financial markets. We expect every investee company to mitigate their impact on the environment and understand climate change impacts on their activities and operations. We encourage them to contribute to the development of a lower carbon economy in line with the goals of the Paris Agreement.Empowerment
Companies cannot successfully operate without appropriately balancing the interests of their stakeholders. We expect our investee companies to value their employees whilst providing a supportive, safe and inclusive environment at work. With regards to customers, the appropriate processes and internal controls should be put in place to ensure customer welfare, enhancing their experience and therefore, their loyalty. We also look for companies to ensure, to the best of their ability, strong human rights standards through their supply chain.Leadership
We believe that a robust leadership underpins the long-term performance and success of any corporation. Whilst there is no one formula to good governance, we expect our investee companies to put in place the appropriate governance structure which will contribute to fostering innovation as well as ensuring strong checks and balances are in place.OUR PROPRIETARY ESG RESEARCH SYSTEM: START
Effective management of ESG factors is inherently linked with long-term performance and risk management. In 2020, Carmignac invested in a significant development enabling more uniform and efficient understanding and integration of ESG factors across all the key investable asset classes: equities, corporate and sovereign bonds. START (System for Tracking and Analysis of a Responsible Trajectory) is a systemised platform aggregating multiple sources of raw ESG data for our proprietary scoring systems for companies and also our Sovereign ESG model, Controversy analysis and SDG alignment.
START provides forward-looking ESG analysis that gives our investment teams the insights they need to make appropriate investment decisions, to best serve our clients’ long-term interests.
OUR OUTCOMES FRAMEWORK
At Carmignac, we strive to identify firms generating positive change based on the Sustainable Development Goals (SDGs) defined by the United Nations.
Alignment is defined for each company by meeting at least one of the following three thresholds:
- Products and services: the company derives at least 50% of its revenue from goods and services that are related to one of the following nine SDGs: (1) No Poverty, (2) No Hunger, (3) Good Health and Well Being, (4) Quality Education, (6) Clean Water, (7) Affordable and Clean Energy, (9) Industry, Innovation and Infrastructure, (11) Sustainable Cities and Communities, (12) Responsible Consumption and Production; or
- Capital expenditure: the company invests at least 30% of its capital expenditure in business activities that are related to one of the above mentioned nine SDGs; or
- Operations: the company achieves an aligned status for at least three (3) out of all seventeen (17) of the SDGs, based on the evidence provided by the investee company of available policies, practices and targets addressing such SDGs.
For further information on the methodologies, please refer to the pre-contractual SFDR disclosures of the relevant funds as well as our Outcomes Policy.
United Nations Sustainable Development Goals
As part of our sustainable investment journey, Carmignac Gestion uses the United Nations Sustainable Development Goals as illustrations of the company Outcomes Framework. The SDG logos, icons, colour wheel and design rights are and remain the property of the United Nations. Carmignac Gestion is a UN PRI signatory but is in no way affiliated with the United Nations. The United Nations did not endorse the content or data behind the SDG logos, icons and colour wheel. All content and data related to each UN SDG are compiled by Carmignac.
OUR SOVEREIGN DEBT MODELS
At Carmignac, we think that it is key to integrate ESG criteria in the monitoring of sovereign bonds as these are globally dominant in asset allocation. While external solutions are slowly being developed, we have chosen to build our own proprietary models in order to ensure ESG integration and to provide material information to our investors. Two models have been developed in the last years:
- A global sovereign ESG risk model, which aims to assess ESG risks faced by developed and emerging countries
- An Emerging Markets -focused model that aims to identify positive ESG trajectories.
OUR ESG INDICATORS USED IN START
We analyse over 30 specific ESG indicators that we have defined as financially material for around 8,000 companies, to which we add controversy data. START allows our teams to add unique human insight and conduct company engagement surrounding these key indicators:
Environment
Social
GOVERNANCE
AFFILIATIONS
As an active owner, Carmignac sees value in both direct and collaborative engagement, and it is the combination of both which leads to the most influential and effective stewardship. It is by joining forces that investors can most effectively influence their investee companies on material ESG issues, including market-wide and systemic risks, and ultimately help improve the functioning of markets.
Membership to affiliations provides different levels of collaboration opportunities and involvement. We provide below an exhaustive list of the affiliations we are part of either as a signatory, supporter or participant.
KEY TAKEAWAYS
Our approach
Our approach to ESG is built around the following three following themes: Climate, Empowerment and Leadership.Our methodologies
We have developed proprietary methodologies to the assessment of the ESG profile and performance of our investments across our equity and fixed income holdings. This includes our research platform START.Our collaborations
We seek to collaborate with other investors to have more weight and influence in our engagement with investee companies. We also collaborate with essential players of the finance industry with the aim of ultimately improving how markets function.Carmignac's point of view
CLOs - the new frontier of ESG integration in fixed income markets
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The Funds’ prospectus, KIDs, NAVs and annual reports are available at www.carmignac.com, or upon request to the Management Carmignac Portfolio refers to the sub-funds of Carmignac Portfolio SICAV, an investment company under Luxembourg law, conforming to the UCITS Directive. The French investment funds (fonds communs de placement or FCP) are common funds in contractual form conforming to the UCITS or AIFM Directive under French law.
In the United Kingdom: the Funds’ respective prospectuses, KIIDs and annual reports are available at www.carmignac.co.uk, or upon request to the Management Company, or for the French Funds, at the offices of the Facilities Agent at BNP PARIBAS SECURITIES SERVICES, operating through its branch in London: 55 Moorgate, London EC2R. This document was prepared by Carmignac Gestion, Carmignac Gestion Luxembourg or Carmignac UK Ltd. FP Carmignac ICVC (the “Company”) is an Investment Company with variable capital incorporated in England and Wales under registered number 839620 and is authorised by the FCA with effect from 4 April 2019 and launched on 15 May 2019. FundRock Partners Limited is the Authorised Corporate Director (the “ACD”) of the Company and is authorised and regulated by the FCA. Registered Office: Hamilton Centre, Rodney Way, Chelmsford, Essex, CM1 3BY, UK; Registered in England and Wales with number 4162989. Carmignac Gestion Luxembourg SA has been appointed as the Investment Manager and distributor in respect of the Company. Carmignac UK Ltd (Registered in England and Wales with number 14162894) has been appointed as a sub-Investment Manager of the Company and is authorised and regulated by the Financial Conduct Authority with FRN:984288.
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