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 shall ensure that the principles of sustainable development are taken into account in the management of its beneficiaries’ assets, while respecting the general principles of return, security, diversification and liquidity of investments. In terms of investments, CPIC aims to combine the economic, ecological and social requirements of sustainable development with the achievement of the returns necessary to fulfil its mission.
Aware of its responsibility towards society, CPIC maintains a constant dialogue with its asset managers to ensure that its assets are invested in the productive economy, taking into account the principles of responsible investment for future generations. In this context, CPIC delegates to its asset managers the power to exercise shareholder voting rights and engagement activities related to its assets.
CPIC is also a member of the two ETHOS* Foundation for Sustainable Development shareholder engagement pools for Swiss and global equities respectively. It actively participates in the Pools’ collective initiatives towards companies.
In view of the risks posed by global warming, CPIC encourages its asset managers to aim to reduce their portfolios’ exposure to carbon emissions, in line with the objectives set by the Paris (COP 21) and Glasgow (COP26) Agreements.
In addition, the nature of the companies’ activities and the way in which they are conducted is critical to CPIC. Thus, CPIC does not invest directly in the securities (shares and bonds) of companies that are mainly active in controversial armament according to the principles of the Swiss Association for Responsible Investment, unconventional oil extraction (oil shale, hydraulic fracturing), coal production, gambling, pornography, tobacco; the same applies to companies that use child labour or whose activity is marked by systematic violations of human rights.
CPIC does not invest in derivatives on agricultural commodities.
Finally, CPIC ensures that the annual reports of its asset managers includes an ESG and carbon emissions analysis of their portfolios.”
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