THE OBLIGATION OF INFORMATION IS REQUIRED BY ASSET MANAGEMENT COMPANIES TO TAKE INTO ACCOUNT ENVIRONMENTAL SOCIAL AND GOVERNANCE QUALITY CRITERIA IN THEIR INVESTMENT POLICY.
The "National Commitment for the Environment" law known as Grenelle II published the 12th of July 2010, imposes on companies of more than 500 people new obligations in social and environmental governance. The goal is to reconcile or optimize the couple, economic performance and social and ecological protection in order to reach for a "sustainable development" perspective.
Article 224 of Grenelle II complements Article L.214-12 of the French Monetary and Financial Code by requiring SICAVs and Asset Management Companies to include criteria, in their annual reports and in the documents intended to inform subscribers, about the respect of social and environmental objectives. The purpose is to allow subscribers to be informed about the possible consideration of environmental and social criteria by the Asset Management Company in its investment decisions.
This global approach reveals two types of criteria in the financial management of an asset management company. A precise and determined criterion, the SRI criteria which expressly apply in the context of the management of a SRI labeled fund and the more general criteria reflecting a global policy of taking into account environmental, social and governance issues applicable to all the asset management policies of the company resulting in the choice of its investment decision.
Hugau Gestion does not manage SRI labelled funds and is therefore not subject to comply with the European Code of Transparency for Investors.
However, Hugau Gestion imposes itself in its company selection for its UCITS fund management to comply with the ESG criteria (Environment Social and Governance) inspired by the Social and Environmental Reporting from the Grenelle II.
Hugau Gestion invests mainly in debt or equity securities of large European groups that have signed a chart of good governance. In addition, the management company votes at the general meetings of the French companies in which it invests and in this respect verifies that the AFEP-MEDEF corporate governance code for listed companies is respected, in particular through the following criteria:
Quality of governance:
- Independent administrators
- Rate of independent directors within the 4 Committees of the Board of Directors: Audit Committee, Corporate Governance and Nominations Committee, Remuneration Committee, Strategy, Development and Sustainable Development Committee
- Rotation of the directors every 3 years according to the AFEP / MEDEF recommendation
- Mixed Board of Directors (20% minimum of women by 2024)
- Attendance at Board and Committee meetings.
Aware that environmental criteria directly or indirectly impact companies' risk profiles, their representation and their financial performance, Hugau Gestion attaches particular importance to the respect of these objectives in the selection of companies. They are assessed according to the type of activity. In case of activity with proven environmental risk (oil, gas, petrochemical, chemical, raw materials, food ...), Hugau Gestion selects as a priority, companies that have set up an environmental reporting with data relative on the consumption of groups, (energy, water, paper and packaging), waste treatment, (regular and specific waste) and greenhouse gas emissions. It also ensures that the environmental risk control mechanisms and repair capacities, if necessary, are effective. (Environmental security charter, environmental reporting protocol, etc...).
Hugau Gestion UCITS funds:
Hugau Gestion manages 8 UCITS funds and all of them take the ESG criteria into account in their management policy and in their investment decisions.
As a conclusion, Hugau Gestion takes ESG criteria into account in its management strategy, while respecting the spirit of good corporate governance, environmental and social criteria in order to conduct responsible and sustainable finance.
ESG and Carbon Review: In the interests of transparency and the desire to go further in its environmental and socially responsible approach, Hugau Getion has asked "Vigeo" an independent company, to carry out an energy and ESG assessment of its main mutual funds, which are available at the request of its clients.
Hugau Gestion is also a signatory of the PRI (Principles for Responsible Investment).