Responsible Investment

What is Socially Responsible Investment (SRI) ?

SRI (Socially Responsible Investment) is a form of investment which seeks to reconcile economic performance and social and environmental impact by financing companies and public entities that contribute to sustainable development. By influencing the governance and conduct of the players involved, SRI serves to promote a responsible economy. Translation of the French Responsible Investment Forum’s (FIR) definition.

What is the approach adopted by CPIC’s Foundation Board

CPIC’s Foundation Board is aware of the importance of being able to report good annual performances to the beneficiaries. However, the investment performance ought not to be obtained regardless of the price and ought not to cause risks of economic, social or ecological imbalance. That is why we at CPIC have the desire to act as responsible investors. In order to put that wish into practice, our asset management considers not only performance but also the criteria of sustainable investments.

Responsible asset management is based on three main approaches:

-systematic exclusion of certain areas of activity – in particular companies that produce or market controversial weapons or agricultural raw materials essential fo basic foodstuffs;

-participation of our managing banks in SRI platforms, such as Sustainanalytics, and the inclusion of their ratings in the choice of investments;

-appliaction by our managing banks of their internal Ethical, Social and Governance (ESG) policy in the choice of investments.

At each General Assembly, the managers present the specific position held by ESG investments in the CPIC portfolios, with these investments accounting for a steadily increasing share from one year to the next.

CPIC’s  Environmental Social and Governance Charter

The approach described above is embodied in the adoption by the Foundation Board of an Environmental, Social and Governance (ESG) Charter which allows for the long-term enhancement of ESG criteria in the management of investments while respecting the priorities of return and security of the investments.

Article 3 of the Charter states:
“CPIC ensures that the principles of sustainable development are taken into account in the management of its beneficiaries’ assets, while giving due consideration to the general principles of return, security, diversification and liquidity of investments. In respect of investments, CPIC strives to combine the economic, environmental and social requirements of sustainable development with the achievement of the returns necessary to fulfil its mission.

Aware of its responsibility towards society, CPIC is in constant dialogue with its asset managers to ensure that its assets are invested in the productive economy, exercising care for future generations through the application of the principles of responsible investment. In this context, CPIC delegates authority to its asset managers to exercise shareholders’ voting rights and engage in activities related to their assets in the best possible manner.

CPIC is also a member of two of the ETHOS Foundation’s shareholder engagement pools for sustainable development. These are the pools for Swiss shares (Ethos Engagement Pool Switzerland) and global shares (Ethos Engagement Pool International). CPIC actively participates in the Pool’s joint initiatives vis-à-vis the companies concerned.

Given the risks associated with global warming, CPIC calls on its asset managers to strive to reduce the carbon emissions exposure of their portfolios in line with the objectives of the Paris Agreement (COP21) and Glasgow Climate Pact (COP26).

Furthermore, the nature of the companies’ activities and the manner in which they conduct their business are crucial for CPIC. Hence, CPIC does not invest directly in the securities (shares and bonds) of companies active in the sectors of controversial weapons as per the principles of the Swiss Association for Responsible Investments, conventional weapons – if they account for more than 10% of a company’s sales – unconventional oil extraction (shale oil, hydraulic fracturing), coal production, gambling, pornography or tobacco. The same applies to companies that use child labour or systematically violate human rights in the course of their activities.

CPIC does not invest in agricultural commodity derivatives.

In the case of investments in gold, CPIC favours investments that give precedence to certified gold, traceable gold or ethical artisanal gold.

Finally, CPIC makes sure that the annual reports drawn up by its asset managers include an ESG analysis and their portfolios’ carbon emissions.”

CPIC is a member of Ethos

Moreover, CPIC is a member of Ethos – Swiss Foundation for Sustainable Development, a grouping of nearly 246 institutional investors. The purpose of this foundation is to promote consideration of sustainable development principles in investment activities and also to promote a stable and prosperous environment that serves society as a whole.

We are members of the Ethos Engagement Pool Switzerland and of the Ethos Engagement Pool International and entrust them with shaholder engagement for our investments in Swiss and International equities. This commitment is aimed at strengthening the social and environmental responsabiliy of the companies in question and enhancing their governance. In this way, it will be possible, over the long term, to reduce the level of controversy concerning certain investments included in the porfolios.

Link to Ehtos, Prestations, Ethos Engagement Pool suisse and Ethos Engagement Pool international