What are the main characteristics of Socially Responsible Investment (SRI)?
This investment approach takes into account more than just financial criteria when selecting securities by integrating such non-financial criteria as environmental, social and governance factors. This approach has two objectives: to satisfy the expectations of investors committed to achieving social and environmental value-added on their assets and to integrate now commonplace considerations in the market into their fiduciary and responsible management. The crisis indeed revealed the shortcomings of purely financial indicators in identifying all market risks. First and foremost, SRI is a long-term investing approach. I expect all investment companies to adopt this approach in the near future, as it is becoming increasingly unavoidable.
What were the circumstances behind CA Chevreux’s establishment of the SRI Research Department?
The SRI team was created in 2005. CA Cheuvreux was a pioneer in taking these factors into account. The project gathered pace in 2008 with the signature of responsible investing principles proposed by the United Nations. We are currently the only brokerage firm in the world to have signed these principles. They prescribe several rules that integrate environmental, social and governance (ESG) criteria into the research and securities selection process. The unit has grown from a single staff member at the outset to a team of six specialists. This development can be attributed to the growth of the SRI market since 2005. The crisis even provided further justification for strengthening these criteria. For example, we have witnessed quasi-exponential growth in thematic funds as our investor clients seek out sustainable development, green technologies, eco-design, energy efficiency, etc. We are no longer merely targeting the niche of SRI investors, but potentially all investors who believe that these criteria affect asset performance.
What are CA Chevreux’s commitments regarding these criteria?
To conduct a systematic review of companies’ ESG criteria for all of our research publications on a given security. In the research area, we are currently the only research firm to have adopted this commitment for at least the past three years. We are also committed to promoting dialogue between companies and investors regarding these criteria.
SRI Research has won several awards since its creation. Could you tell us a bit more about that?
_The most recent award was from Thomson Extel for best "Sustainability Research in Europe". After ranking second in 2008 and again in 2009, we were pleased to finish first in 2010. This combination of five awards in different SRI areas (climate change, renewable energy, governance, etc.) recognises our consistent SRI research efforts.
For the second consecutive year, we also received the Farsight Award for the quality of our long-term and non-financial research dealing mainly with climate change. In addition, we have led numerous pro bono initiatives, especially in our capacity as the author of the Carbon Disclosure Project report on behalf of this NGO, whose membership includes many leading international investors.
What are the main SRI events planned for the second half of 2010?
We will continue to work together with experts through roundtables bringing together investors and companies to discuss sectors such as oil, utilities, defense, etc.
One highlight of the second half will be the conference on the financial challenges of biodiversity, which we are organising in conjunction with the WWF.
The "Better Returns in a Better World" project, which we have been working on with Oxfam, will be presented in October.
Finally, the launch of the 2010 Carbon Disclosure Project of course remains a key second-half event in terms of our carbon research.
