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Our ESG analysis methodology

We have been shaping our own ESG company analysis and rating methodology since 2007. Our fund management team applies it systematically and rigorously to all the stocks present in our investment funds. The methodology is specially adapted for funds subject to ESG integration.

A policy of sector and normative exclusions

Our approach encompasses three levels of exclusions:

Entire range

Sectors such as tobacco production – banned from the outset – controversial weapons and the production of thermal coal are excluded from all of our investment solutions.

SRI funds

Our exclusion policy covers the tobacco, weapons and fossil fuels sectors across the board. Companies guilty of violating one or more of the 10 United Nations Global Compact principles are also excluded.

Echiquier Positive Impact Europe

The list of exclusions is extended to sectors that contribute negatively to the UN SDGs, such as alcohol, GMOs, gambling and pornography.

Our company assessments

Since it is difficult to assess the quality of a company’s commitment based solely on reading its reports, our analysis draws on meetings with management teams. These interviews dedicated to Environmental, Social and Governance (ESG) issues provide the basis for a rating, which constitutes a discriminating criterion for selecting the stocks in which we invest.

We attach special importance to corporate governance, and apply specifically a rating to the quality of the management team.

Governance

Industry & Services

≈ 60% of the rating

Skill of the management team

Checks and balances

Respect for minority shareholders

Evaluation of non-financial risks

Environment

Industry ≈ 20% of the rating

Services ≈ 15% of the rating

Policy & actions

Results

Suppliers

Environmental impact of products

Social

Industry ≈ 20% of the rating

Services ≈ 25% of the rating

Loyalty & progression

Protection

Suppliers

Social impact of products

Relationship with civil society

Penalty for controversies

Depending on the severity of the controversy, the overall ESG score of the company (out of 10) can be penalised by a maximum of 2 points.

Case-by-case analysis of controversies and focus on their materiality for the company analysed.

An Ethics Committee rules on the most sensitive cases.

Sustainable Development Goals

17 goals to transform the world: the United Nations Sustainable Development Goals (SDGs) aim to promote peace and prosperity, end poverty and protect the planet in the years to 2030. They are tangible objectives that offer asset managers a new matrix and new opportunities for dialogue with the companies in which they invest. The companies in which Echiquier Positive Impact Europe invests derive at least 20% of their revenue from products or services that contribute positively to achieving one or more SDGs. Since 2017, LFDE has developed a proprietary identification methodology for companies committed to the SDGs.

Beyond the analysis, a shareholder dialogue

Interviews with companies devoted specifically to their non-financial challenges contribute to improving their CSR approach and their governance. We formalise specific areas of improvement with each company met, and track progress over time.

100% of votes at AGMs! We systematically exercise our voting rights in General Meetings, thereby making our contribution to the improvement of corporate governance. See our Voting & Engagement Policy and our Voting and Engagement Exercise Report.

Close-up on our method

OUR SRI FUNDS ESG INTEGRATION
Echiquier Major SRI Growth Europe
Echiquier Positive Impact Europe
The full LFDE range
Exclusion Controversial weapons | Tobacco production | Thermal coal production
Fossil energy production | Tobacco industry | Arms sector -
Violation of the United Nations Global Compact
- Alcohol | Gambling | Pornography | GMOs
Notation ESG ≥6/10 ≥6,5/10 Goal: 100% of portfolio holdings to have an ESG rating (minimum 90%)
Contribution to the UN SDGs - Impact score ≥25/100 -
Controversies 100% of controversies analysed Special attention | Ethics Committee to rule on the most sensitive cases
Dialogue 100% of companies met before investing Regular meetings with company managements
Vote Vote for 100% of portfolio issuers
Learn more about Echiquier Major SRI Growth Europe Learn more about Echiquier Positive Impact Europe Discover the entire range
OUR SRI FUNDS
ESG rating
≥6/10
Dialogue
100% of companies met before investing
Exclusion
Controversial weapons | Tobacco production | Thermal coal production
Fossil energy production | Tobacco industry | Arms sector
Violation of the United Nations Global Compact
Vote
Vote for 100% of portfolio issuers
Controversies
100% of controversies analysed
Contribution to the UN SDGs
-
ESG rating
≥6,5/10
ESG INTEGRATION
ESG rating
>Goal: 100% of portfolio holdings to have an ESG rating (minimum 90%)

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Our convictions

SRI, a conviction from the very beginning

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Our SRI offer

Our investment solutions to combine meaning and performance.

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Find out more

Access our SRI documentation, or explore the theme.

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