Giving a meaning to your investments. This approach was developed by incorporating Environmental, Social and Governance criteria into companies’ investment decisions.
Investors who set up a Socially Responsible Investment (SRI) approach are convinced that companies concerned about their impact on the environment, their best governance practices and their social impact, are companies with a long term vision and which are doing what it takes to perform sustainably. These practices provide companies with the tools they need to cope with future contingencies and enhance their ability to face crises.
Since 2008, BNP Paribas Cardif has been selecting all its direct investments according to ESG criteria. These are demanding criteria which complement the traditional financial criteria. In that way, the insurer favours companies with the best practices and those that are the most committed to protecting the environment and people.
In 2015, COP 21 accelerated the development of SRI and put the notion of impact on the map. A lot of tools and methodologies emerged to measure the positive social or environmental impact of investments in addition to financial performance criteria. Impact investing accelerates its development. Thematic funds offers targeting a specific impact are on the rise, often with a social objective. In this case, the social and environmental objectives of investments are predefined and measured.
Measuring the impact of some areas is easier, such as housing. BNP Paribas Cardif finances more than 6,000 places in emergency shelter units through the Hémisphère fund launched by Groupe SNI and AMPERE Gestion, dedicated to housing people in difficulty. These places are designed to accommodate the most vulnerable people, while providing them with social support. The insurer also invests in intermediate housing. Nearly 9,000 new homes were built under the Intermediate Housing Fund (FLI) to allow families whose incomes are too high for welfare housing and not high enough for the free market to find affordable accommodation.
But for impact investing to come up to speed, institutional investors need this market to be structured. "Institutional investors need to rely on strong players who can select projects, follow them up and measure their social and environmental impact through result dashboards," explains Olivier Héreil, Deputy Chief Operating Officer, Asset Management of BNP Paribas Cardif. This kind of methodological breakthrough will determine the future of this new type of responsible investment.