For a sustainable economy

Responsible investing

Responsible investing

CNP Assurances’s primary financial responsibility is to secure the commitments made to policyholders and guarantee a steady, optimized performance year after year.  

In line with the belief that including socially responsible investment criteria in the investment selection process optimizes the yield-to-risk ratio over the long term, ESG screens have been applied to the  majority of CNP Assurances’s assets and those of its French subsidiaries (81% at end-2016) over the last few years. CNP Assurances wants to use its investments as a driver for positive change in the economy.

81% of CNP Assurances financial assets managed according to ESG criteria

CNP Assurances is an insurance company. As such, it does not manage assets for others and entrusts the management of its own assets to specialists. The responsible investor approach is defined and led by CNP Assurances, drawing on the extra-financial expertise of the asset management companies. This commitment was strengthened in 2011 when CNP Assurances signed on to the Principles for Responsible Investment ( PRI), as well as in 2015 when it signed on to the Montréal Carbon Pledge. On 31 December 2016, the ESG filter covered 81% of the financial assets of CNP Assurances and its French subsidiaries.
CNP Assurances' responsible investing is reflected by progressively taking into account environmental, social and governance (ESG) criteria for the whole portfolio over the different unit-linked investments:

■     Listed equities: The approach is based on best-in-class management. Quarterly monitoring allows Natixis AM’s and LBPAM's extra-financial analysts to exchange ideas concerning high-risk securities and current challenges. Dialogue is initiated with the owned companies in the event of ESG problems. When dialogue fails to produce results, other actions can be taken. These might include suspending purchases of the company’s securities or even selling/excluding the existing portfolio.
Responsible investing in listed unit-linked investments supports ecological and energy transition, in particular via the development since 2014 by our management company SRI analysts of a risk and carbon opportunity approach. As of 2008, CNP Assurances excluded manufacturers of cluster bombs and antipersonnel mines from its listed equities. Since 2015, it has excluded all coal mining
and coal-based energy producing companies whose turnover is more than 15% derived from thermal coal.

■     Government bonds and equivalents: Exclusion of tax havens and non-democratic countries with a low freedom rating according to the Freedom House index, or which are deemed corrupt by Transparency International.

■     Corporate bonds: Quarterly ESG portfolio scores, exclusion or limitation of the investment world based on the Global Compact’s principles. In 2008, CNP Assurances excluded from its bond investment world cluster bomb and antipersonnel mine manufacturers. Since 2015, it has also excluded all coal mining and coal-based energy producing companies whose turnover is more than 15% derived from thermal coal.

■      Mutual funds: The procedure is based on the selection of management companies (taking their ESG commitment into account) and the definition of general investment principles: players who speculate on agricultural raw materials and manufacturers of cluster bomb and anti-personnel mines are excluded. Furthermore, dedicated mutual funds that do not comply with the Global Compact principles and the carbon footprint issue defined in accordance with the procedure on bonds have also been excluded since 2015.
The issue of sensitive countries is also monitored: an investigation into tax havens and embargoes was conducted in 2015. Findings from this investigation are included in the due diligence questionnaire, which prompted the exclusion of new dedicated mutual funds.
Furthermore, CNP Assurances invested €2.8 billion in SRI mutual funds, or 10% of the amounts outstanding for all non-dedicated mutual funds held at end-2016.

■     In addition, SRI documentation is provided in unit-linked policies . They represent an outstanding amount of €592 million, up 9% compared with 2015.
 

■       The Caixa Seguradora Group makes industry exclusions based on its investments in government and corporate bonds, as well as exclusions in shares. CNP Seguros de Vida prioritises between investments with equal risks and returns, selecting the one with the better social and/or environmental profile. At the end of 2016, 16% of assets were dedicated to supporting SMEs and social infrastructures. In 2015, CNP UniCredit Vita implemented exclusion rules defined by CNP Assurances for sensitive securities and countries in its Euro portfolio, or 46 % of its financial assets at the end of 2016 in line with MFPrévoyance.

 

Energy and environmental transition

Ecological and energy transition

CNP Assurances obtained a share in private equity funds in the eco-energy/eco-industry/cleantech sector amounting to €34 million at the end of 2016. Direct and indirect investments in renewable energy infrastructures, sustainable mobility and water and waste treatment represented a total of €651 million at the end of 2016. In addition to these funds, €902 million was invested directly in bonds linked to specific environmental projects (green bonds).
At the end of 2015, together with the management company Meridiam, CNP Assurances launched an infrastructure fund “Meridiam Transition” in order to finance innovative development projects involving energy transition, local services such as heat networks and waste-to-energy processing, electricity and gas networks and innovative renewable energies: €100 million was invested at the end of 2015 followed by a further €49 million in 2016.
Thanks to developments within the framework of its low carbon strategy, CNP Assurances reached its target of tripling outstanding amounts for the benefit of TEE between 2014 and 2017 with these amounts standing at €1.7 million on 31/12/2016.
CNP Assurances received a special mention from the jury at the awards for first prize in the international competition for the best investors climate report in October 2016.

Withdrawal from the coal sector

CNP Assurances has transferred bonds in coal mining and coal-based energy producing companies worth around €300 million since 2015. At the end of 2015, it no longer held any direct position in the listed shares and bonds of companies, for whom more than 25% of their turnover is derived from thermal coal.

Financial portfolio's carbon footprint

After committing to the Montréal Carbon Pledge in May 2015, CNP Assurances measures and publishes its financial portfolio's carbon footprint. As a first step, this measurement concerns
the portfolio of listed equities held directly.
At 31 December 2016, this footprint was estimated to be 0.405 teq CO2/thousand Euros invested. CNP Assurances has set the objective of a 20 % reduction in the level reached on 31 December 2014 by 2020 (slightly faster rate than the commitments of the European Union under the Paris agreement) in particular by engaging in talks with the companies in which it owns shares. This indicator, which is useful in terms of coordinating the decarbonation of the portfolio, remains imperfect as it does not necessarily put the company’s positive actions to promote energy transition in a positive light, CNP Assurances supports the development of methodologies on the carbon and TEE impact of companies, in particular those related to avoided emissions.
NB: This is an estimate of greenhouse gas emissions for scope 1 and 2 portfolio companies at the end of 2015 (last published figures), without reprocessing duplicates, reported in the portfolio book value. These estimates are volatile and depend notably on the data collection methods and scope within firms and changes in reference emission factors. Therefore, even though the results are extremely encouraging at the end of 2016, CNP Assurances remains vigilant and is still pursuing these actions.