ESG stands for :
(broader ethical approach than SRI)
The concept is often related to the term SRI :
(« Best in Class » approach, thematic, exclusions policy)
ESG integration is the analysis of all material factors in investment evaluation and investment decisions, including environmental, social, and governance factors.
This involves making investments with the aim of creating a measurable beneficial impact on the environment or society, as well as earning a positive financial return.
2PM positions itself on the main generic principles of Responsible Investment and Sustainable Development.
References made to the 17 United Nations Sustainable Development Goals, to the 6 goals of new directive of the European Taxonomy and to the 6 principles of PRI.
The adoption and application of ESG rules by corporates often lead to an active policy of Impact Investing.
The concept of ESG is not new (17th century in the US)
However it has too often been used for marketing purposes and not for real ecological purposes (recent new regulations should help to prevent trend towards Greenwashing)
A harmonious life of man is only possible in the LONG TERM if he/she fully respects his/her environment, the humans, the animals and the vegetal world. Without the ocean and the forests, any kind of life requiring oxygen is totally impossible
Global warming and the worrying degradation of the planet caused by human activity are slowly pushing the public authorities to adopt corrective measures (all COPs)
The Covid-19 crisis has prompted governments to speed up voting and provisioning budgets dedicated to financing sustainable businesses (European Green Pact)
Indirectly, the Asset Management Companies must necessarily integrate sustainability into their investment instruments as a tool for the ecological transformation/transition
ESG rules are a powerful tool for the structural transformation of our societies
Growing demand for the integration of ESG into the economy justified by:
Sharp rise in awareness on environmental issues among the public
Companies want to drastically reduce their reputational risk
Strategic business development decisions are made with a better understanding of environmental issues
Shareholders are more active in AGMs on ESG topics
Growing desire to have a positive impact on the life of our society
Integrating ESG instruments into portfolios allows:
To increase the defensive nature of portfolios
To include sectors / companies that are often rich in technological innovation and which therefore will offer strong growth prospects
1. Climate change mitigation
Production and distribution of renewable energy
Improving energy efficiency
Increase clean and carbon neutral mobility
Switch to the use of renewable materials from sustainable sources
Carbon capture, storage and use
Strengthen the earth's natural carbon sinks through forest restoration, regenerative agriculture, etc.
Construction of energy infrastructure allowing the decarbonization of energy systems
Clean and efficient fuel production from renewable or carbon neutral energy sources
2. Adaptations to climate change
3. Protection and sustainable development of water and marine resources
4. Transition to a circular economy
5. Pollution control and prevention
6. Protection and restoration of biodiversity and ecosystems
The capital of the companies of 2PM Group is held by a set of stable private shareholders which guarantees its independance of action.
The tripartite operating model (Client-Custodian Bank-2PM) ensures that 2PM's interests are aligned with those of its clients.
Whether it is the management policy, remuneration or even relationships with counterparties, the companies of 2PM Group promote transparency.
2PM adopted this position even before the entry into force of the Mifid regulations at the end of 2007.
The 2PM Group offers personalized solutions combined with quality service and always strives for excellence.
Because 2PM Group's interests are aligned with those of their clients, 2PM are able to build solid long-term relationships based on trust and to advise its clients at all important stages of their lives.
ASSET MANAGEMENT :
A team of committed Portfolio managers maintains a continous dialogue with ESG specialised fund managers for the selection of the most appropriate ESG financial instruments.
2PM DOES MORE THAN TALK ABOUT SUSTAINABILITY – IT IMPLEMENTS IT INTO ITS DAILY LIFE!
Not only in their investments but also in their offices have they shown an environmental commitment, making them an inspiration towards their customers and co-workers.
In 2PM’s offices, all employers have their own stainless-steel water bottle and the offices use glass water jugs and glass bottles for their clients. The water is purified in a water fountain. The offices use recycled paper, and waste including ink cartridges are carefully sorted and recycled.
In addition, 2PM is actively supporting an environmental conservation NGO (TAF- The Animal Fund) since its launch in 2015. ''We have chosen a smaller active local player with real honest commitment and without financial ties to bigger operations''.
2PM's support to TAF means financial contribution and personal commitment of the employees through attending several activities such as educational work for schools/universities, educational stands at events, environmental conferences, and large clean ups in various countries.
2PM often joins beach clean operations organized by TAF The Animal Fund
2PM participates actively at European Week for Waste Reduction (EWWR)
Please find summary report of the EWWR action
2PM group offers investment solutions to each individual client, while ensuring a consistent integration of ESG criteria
Integrity and solid engagement in our investment processes together with our endless commitment to our environmental partners
Those who respect the ESG today are those who will earn tomorrow!
Successfully committed to sustainable, transparent and long-term oriented investment
POSITIONING AND INVESTMENT IN ESG
ESG investment came naturally to 2PM because it fits perfectly with its values
The implementation of ESG is in total differentiation from Greenwashing, which still devalues too much the noble character of honest ESG
The 2PM approach to ESG is based on convictions and transparency
2PM offers its clients ESG solid financial instruments and solutions
2PM always invests in funds that all have a solid ESG "Momentum“
2PM is committed to inform its clients about the importance of ESG
2PM only invest in financial instruments that present the same ESG convictions as its own
Values-based investing requires an allocation of capital to responsible companies with sound governance and respectable social practice
THE ESG PORTFOLIO CONSTRUCTION PROCESS
Clarity AI in the 2PM ESG approach
A financial instrument may have a lower ESG score and may nevertheless be part of the portfolio if and only if :
It is totally in line with the objectives of substainable developement and positive impact
It has a strong and favorable ESG Momentum
This same rule is applicable in the case of individual securities and also to a fund when the manager selects securities that offer ESG Momentum
Definition of personalized impact measures based on the 2PM corporate ESG sensitivities