Carmignac

Responsible Investment

Our approach in practice

  • [ISR pages] Picto Avoid
    Avoid

    We avoid companies that conflict with our principles and values. Due to their activity, standards or behaviour, we exclude them from our investment universe. We choose to only invest in companies with sustainable business models that exhibit long-term growth perspectives.

  • [ISR pages] Picto Analyse
    Analyse

    We analyse the firm’s ESG practices alongside conventional financials. Our proprietary ESG research system helps us to assess the impact of a company’s business on the world – and the world’s impact on its business – to capture as many risks and opportunities as possible.

  • [ISR pages] Picto Engage
    Engage

    We engage with companies on ESG-related issues. This includes exercising our shareholder voting rights*, helping instil best practices, clarifying our views or holding senior management accountable when issues arise.

  • [ISR pages] Picto Communicate
    Communicate

    We communicate our actions and achievements with our clients. We provide full transparency related to ESG issues primarily through our website, where we publish fund documentation, reports, policies, and insights from our experts.

* We have set our target of voting participation to 100% across our entire equity fund range from 2020 onwards. Refer to our Policies and Reports page for more details.

Inside START, our proprietary ESG system

Effective management of ESG factors is inherently linked with long-term performance and risk management. Our latest ESG development is the implementation of our interactive proprietary system START (System for Tracking and Analysis of a Responsible Trajectory), systemizing the integration of ESG analysis in our Funds’ investment process.

START provides forward-looking ESG analysis that gives our investment team the insight they need to make appropriate investment decisions, to best serve our clients’ long-term interests.

ESG Indicators used in START

We analyse over 30 specific ESG indicators that we have defined as financially material for around 8000 companies, to which we add controversy and impact data. START allows our teams to add unique human insight and conduct company engagement surrounding these key indicators.

Carmignac
Environment

  • Energy Usage and CO2 Emissions

    Indicators: Carbon emissions, Carbon intensity, Flaring of natural gas, Total energy/Revenues, Renewable energy/Total energy, Total energy consumption.

    Rationale: Companies that reduce their CO2 emissions through renewable energy use and energy efficiencies can have lower costs associated with financing and regulatory compliance.

  • Pollution and Waste

    Indicators: Total waste/Revenues, Waste recycled/Total waste, Direct and accidental oil spills.

    Rationale: By limiting waste production, companies can improve their materials usage efficiency and reduce cost from the needs to dispose waste.

  • Water and Other Natural Resources

    Indicators: Water use/Revenues, Water recycled, Total fresh water withdrawal.

    Rationale: Companies that manage water use efficiently will have less risk to their production methods and for the environment.

Carmignac
Social

  • Employee and Customer Satisfaction

    Indicators: Employee satisfaction, Employee turnover, Incidence of female manager, Customer satisfaction.

    Rationale: Fulfilled employees and happy customers are more likely to support company growth.

  • Fair Remuneration

    Indicators: CEO salary gap with average salary, Gender pay gap.

    Rationale: Equal pay and an appropriate executive pay gap can galvanize employee company support.

  • Health and Safety

    Indicators: Employee training hours, Lost time due to injury, Employee fatalities.

    Rationale: Safe and adapted working conditions provide a more productive and secure workplace and may inspire employees to champion company ambitions.

Carmignac
Governance

  • Board & Committee Strength and Shareholder Rights

    Indicators: Audit committee independence, Compensation committee independence, Nomination committee involvement, Independent board members, Board size.

    Rationale: Independent and appropriately-sized boards and committees have the ability to drive more objective decision-making that is better for people and the planet. They also are more likely to uphold shareholder rights and reduce corruption and bribery.

  • Compensation

    Indicators: Highest remuneration package, Long-term objective-linked executive compensation, Sustainability compensation incentives.

    Rationale: Appropriate board compensation, that is aligned with long-term company aspirations, should support more responsible company management.

  • Culture and Ethics

    Indicators: Average board tenure, Board gender diversity.

    Rationale: A company with strong culture and ethics, as seen through the continuity and diversity of Management, is typically a sign of innovation and potential long-term growth.

The proprietary ESG system START combines and aggregates market leading data providers ESG indicators. Given the lack of standardisation and reporting of some ESG indicators by public companies, not all relevant indicators can be taken into consideration. START provides a centralised system whereby Carmignac’s proprietary analysis and insights related to each company are expressed, irrespective of the aggregated external data should it be incomplete.

Read our Sustainability related disclosures, ESG Integration, Exclusion, Climate, Voting and Transparency Code policies, plus our Carbon, Engagement and Voting reports.