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Insurers – ESG

Committed to transition

Shareholder engagement policy

With shareholder engagement, insurers can directly influence the ESG practices of the companies in which they hold shares. This can be achieved through the implementation of a general engagement policy that defines the positions taken by the insurer during the various dialogues with the company, or more precisely through the implementation of a voting policy that can have a direct effect on the strategic choices of the companies whose shares are held.Note for the reader: the figures for 2023 are lower than those for previous years, as the question has been clarified: it is no longer a question of knowing whether players integrate ESG criteria as part of their delegated management, but rather of knowing whether they integrate the application of their ESG-Climate policy.

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Sectoral policies

A sector policy is a document through which a player undertakes to stop or reduce its activities with companies in controversial sectors for economic, social or governance reasons. Each player defines the criteria and thresholds of its policy for the sectors concerned.

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Management policy

The integration of environmental, social and governance criteria can be added to financial analysis. Even if common methodologies are being developed for ESG analysis, the sheer number and heterogeneity of criteria makes it difficult to compare companies.

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ESG financing

Responsible products according to SFDR

The SFDR (Sustainable Finance Disclosure Regulation) is a European regulation that comes into force in March 2021. It defines two categories of products. Article 8 products correspond to products promoting environmental or social characteristics. Article 9 products target sustainable investment objectives.

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Labels

Labeling a fund enables a player to certify the management process and the selection of issuers in its portfolio according to the various criteria required by each label. Labeling a fund is a guarantee of compliance with the specifications specific to each label, and helps reassure customers in their selection of responsible products. A number of French labels exist, covering responsible investment (SRI), solidarity(Finansol) and environmental(Greenfin) products.

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Bonds

Bonds are loans issued by companies on the financial markets. Extra-financial conditions can be attached to bonds at the time of issue. This enables investors to choose to support companies and projects according to defined criteria, such as environmental or social criteria.

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Focus on impact financing

Impact funds

Impact finance is an investment or financing strategy that aims to accelerate the fair and sustainable transformation of the real economy, by providing proof of its beneficial effects. The introduction of common definitions and measurement methodologies should help structure these emerging investment methods.

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Biodiversity

Biodiversity footprint

The Biodiversity Footprint enables a company to determine its impact on biodiversity, just as the Carbon Footprint does for climate. However, while the carbon footprint is based on a single metric common to all (CO2), the biodiversity footprint relies on a variety of metrics that are more complex to aggregate and compare. To find out more about the different ways of calculating the biodiversity footprint, read the Institut de la Finance Durable’s publication entitled: ‘Finance & Biodiversity: the French ecosystem’.

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