Question n°7
Anne-Catherine Husson-Traore
Chief Executive Officer of Novethic
Paris, France
How can a large investor contribute to the reduction of carbon emissions?
Answer
CNP Assurances has taken environmental, social and governance (ESG) criteria into account in asset management for about ten years, and they now affect 81% of its portfolio. In 2015, on the back of the momentum created around COP21, CNP Assurances published the carbon footprint of its shares portfolio, for the first time: 0.47 tonnes of CO2 equivalent per thousand euros invested. The company has set itself very ambitious targets, which will force it to act quickly and in a concrete way towards the ecological and energy transition, by encouraging the companies in which it invests to reduce their impact, supporting those that contribute to energy efficiency, and, as a last resort, withdrawing the worst-performing companies from its portfolio. In one year, CNP Assurances has reduced its carbon footprint by 5%, and does not intend to stop there.
–20% This is the carbon footprint reduction commitment of the listed share and real estate portfolios between now and 2O2O
€265 billion of the assets managed by the Group are subject to ESG criteria, or 81% of total assets
Mikaël Cohen
Director of Investments
When you invest, you take on a responsibility.
Our awareness of the length of our commitments to our insured, over ten, twenty or even thirty years, leads us to take into account all the long-term risks, and in particular climatic risks and their macro-economic consequences. The decarbonisation actions that we take reflect our commitment to be a socially-responsible investor, in line with our financial risks policy.
Our approach is not only to disinvest, in order to protect ourselves from risks, it is constructive: we invest in companies and projects which contribute to combat climate change, and in that way find sources of growth.
Speeding up the energy transition
CNP Assurances manages assets of just over €300 billion, in order to keep to its long-term commitments to its insured.
The consequences of climate change are already visible and could be quite a lot more visible within that timeframe, which encourages the Group to act now using the powerful lever of its investments.
By signing the Montreal Carbon Pledge in May 2015, CNP Assurances committed to publishing the carbon footprint of its financial assets. It began with direct action on its share portfolio in 2015, with an additional target, that of reducing its carbon footprint by 20% by 2020. Responsible financial management is entering a new era: the decarbonisation era. How? Through dialogue, and by encouraging companies of which it is a shareholder to reduce their greenhouse gas emissions.
At the same time, in order to support the energy transition, CNP Assurances sold nearly €300 million in bonds issued by companies extracting or producing carbon-based energy.
€300 million in bonds of companies operating in the carbon energy sector, sold in 2015
€800 million in green investments, infrastructures, private equity and green bonds, at the end of 2015
Going further for the climate
Based on its convictions, CNP Assurances has decided to make energy transition one of the new objectives of its responsible investment policy.
In the future, the Group undertakes to no longer invest directly in companies in which more than 15% of the revenue is associated with carbon-based energy. It is also interested in companies specializing in the energy transition and its ambition is to double the amount of its green investments (infrastructures, private equity and green bonds), which will increase from €800 million to €1.6 billion by the end of 2017. The first flagship initiative is the launch, with the management company Meridiam, of a green infrastructure fund, Meridiam Transition, dedicated to financing the ecological and energy transition, which could quickly reach €500 million.
This new policy has resulted in CNP Assurances measuring the limits of the carbon footprint. This indicator, which is the only one that currently enables the aggregation of the CO2 impact of the whole portfolio, only covers companies’ direct emissions and does not count the positive impact of their activity. In fact, it is possible to invest in an industry that emits carbon to produce insulating materials, which will avoid substantial CO2 emissions by reducing energy consumption. CNP Assurances supports the search currently underway for methods including this concept of avoided emissions, and contributes to the industry discussions, for a global reading of the contribution to the energy transition.