Summary of responses to the PRI reporting and assessment tool 2008

Etablissement du retraite additionnelle de la fonction publique - ERAFP

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?4700
Please select currencyEuro (EUR)
1a. If 'Other' was selected, please specify the other currency hereNo Answer
2. What category would best describe your organisation?Pension or superannuation or retirement or provident fund or plan
3. What proportion (in %) of your fund is defined benefit and what proportion (in %) is defined contribution? (please only answer this question if you answered “Pension or superannuation or retirement or provident fund or plan” to Q2)
Defined benefit0
Defined contribution100
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)14
Listed equity (developed market, passive)0
Listed equity (emerging market, active)0
Listed equity (emerging market, passive)0
Fixed income - developed markets86
Fixed income - emerging markets0
Real estate or property0
Private equity0
Hedge fund0
Infrastructure0
Currency0
Commodities0
Cash0
Other (Please specify): 0
5. Please indicate what percentage of your assets are managed internally and what percentage are managed externally (in %):
 
Internal
External
Listed equity (developed market, active)0100
Listed equity (developed market, passive)00
Listed equity (emerging market, active)00
Listed equity (emerging market, passive)00
Fixed income - developed markets1000
Fixed income - emerging markets00
Real estate or property00
Private equity00
Hedge fund00
Infrastructure00
Currency00
Commodities00
Cash00
Other (Please specify): 00
Principle 1
7. Do you have a formal investment policy statement that makes specific reference to the integration of responsible investment (RI) or environmental, social and governance (ESG) issues within investment decision making and ownership practices?Yes, it is integrated into a broader investment policy and there is an independent RI/ESG policy
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?2005
10. Has your statement that makes specific reference to the integration of RI or ESG issues been disclosed publicly?Yes
11. Please indicate how this statement that makes specific reference to the integration of RI or ESG issues can be obtained (a URL would be sufficient):http://www.rafp.fr/ca/charte_ISR.pdf
12. For what percentage of your internal assets under management do you integrate RI/ESG issues into your internal investment decision-making processes? (in %)
Fixed income - developed markets100
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Fixed income - developed marketsTo a large extent
14. For what percentage of your external assets under management are RI/ESG issues integrated into the investment decision-making processes of your external investment managers? (in %)
Listed equity (developed market, active)100
15. To what extent have RI/ESG issues been integrated into the investment decision-making processes of your external investment managers?
Listed equity (developed market, active)To a large extent
16. What proportion of your assets involve screening out or excluding stocks or sectors based on ethical (rather than long-term financial) criteria? (in %)100
17. Do you have any staff dedicated to RI/ESG issue analysis and/or implementation?
 
Dedicated
Combined full-time equivalents
Investment analyst00
Research analyst00
RI/ESG issue policy advisor10
(proxy) Voting specialist00
Engagement specialist00
Portfolio manager00.5
Other (Please specify):00
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?Board of trustees Board investment policy committee
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?Yes
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Yes
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)100
22. What forms of RI/ESG training or awareness raising have been invested in, encouraged or provided for internal staff (investment and other)?Informal internal training,Conferences,Regular briefings on key issues
23. Did you support the development of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research in 2007?To a large extent
24. Please indicate how the results of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research development you supported can be obtained if they have been disclosed publicly (a URL would be sufficient):ERAFP is a founding member of an academic research project focused on ESG investing, between the Ecole Polytechnique and the University of Toulouse : http://www.chaire-fdir.fr
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Spoke at or attended conferences,Had dialogue or exchanges with peers
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?The activation of our four SRI equities mandates.
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?Not applicable
28. Please add any overall comments and clarifications related to Principle 1 here.Not applicable
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) votingTo a large extent
Direct engagement conducted privatelyTo a moderate extent
Direct engagement conducted publiclyTo a small extent
Collaborative engagementTo a small extent
Filing shareholder resolutionsTo a small extent
Co-filing shareholder resolutionsTo a small extent
Other (Please specify):Not at all
30. To what extent did you employ the following approaches in your 2007 active ownership strategy for all asset classes other than listed equity?
(Proxy) votingNot at all
Direct engagement conducted privatelyTo a moderate extent
Direct engagement conducted publiclyNot at all
Collaborative engagementNot at all
Other (Please specify):Not at all
31. Do you have a (proxy) voting policy?Planning to in 2008
32. To what extent does your (proxy) voting policy direct action on ESG issues? For each issue, please indicate the extent of direction.
EnvironmentalNo Answer
SocialNo Answer
GovernanceNo Answer
33. Does your (proxy) voting policy apply to all voting regions (where possible)?No Answer
34. Please indicate how your (proxy) voting policy can be obtained (a URL would be sufficient):No Answer
35. Do you ensure that voting is done in accordance with your (proxy) voting policy?No Answer
36. What percentage of total votes cast were against management? (in %)
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental0
Social0
Governance0
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer0
As co-filer0
Planning to be lead filer in 20080
Planning to be co-filer in 20080
40. How were portfolio companies engaged with in 2007? Please check all that apply.External investment managers engaged portfolio companies directly,External investment managers engaged portfolio companies collaboratively
42. Do you systematically ask your external investment managers to bring RI/ESG issue-related engagement opportunities to you?Planning to in 2008
43. How many portfolio companies did you engage directly/were engaged on your behalf on ESG issues in 2007?
 
Extensive engagement
Moderate engagement
Basic engagement
Environmental000
Social000
Governance000
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Benefits and compensation,Bribery/corruption,Climate change,Environment,Governance,Health,Health and safety,Human rights,Labour issues
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Risk profile
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?Planning to in 2008
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.No Answer
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?Activation of our four equity mandates, each implementing their own engagement and voting policies.
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?The investment vehicles chosen for equity mandates ("dedicated" mutual funds - due to accounting considerations) do not enable us to specify our own voting policy.
50. Please add any overall comments and clarifications related to Principle 2 here.Since the four equity mandates were activated after the 2007 voting season was over, we do not have meaningful statistics on proxy voting for 2007. Questions 36-39 should therefore not be read as "zero", but as "not relevant". Moreover, though we have hired four specialised SRI managers, each having engagement activities, we are not yet able to consolidate quantitative data on their activity in this regard. Therefore please disregard the answer to question 43.
Principle 3
51. Have you asked that investee companies (or other investment entities) produce standardized reporting on their RI/ESG issue policies, practices or performance (within annual financial reports or other formats)?To a moderate extent
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?Global Reporting Initiative (GRI)
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a large extent
54. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues?
AdoptionTo a large extent
AdherenceTo a large extent
55. Which norms, standards, codes of conduct or international initiatives related to RI/ESG issues have you sought information about from companies, with regard to their adoption of/adherence to?UN Global Compact,Equator Principles,International Labour Organization standards,OECD guidelines for multinational enterprises,Universal Declaration of Human Rights
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?We have appointed two external ESG ratings agencies to assess local authority bond issuers on ESG issues. This kind of ESG research was not previously available, and was instigated as a result of our initiative.
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?While 13 local authorities were rated in 2007, the coverage is still insufficient to provide meaningful benchmarking. Moreover, local authorities do not provide the same quantity and quality of ESG reporting as large listed corporations, making the rating of them more difficult.
58. Please add any overall comments and clarifications related to Principle 3 here.We have appointed two external ESG ratings agencies to assess issuers. While they do not demand that issuers use standardized formats for ESG reporting, they do cooperate with the GRI on these matters. They both provide feedback to issuers on their reporting, as they do not rely on standard questionnaires without interaction. The ratings they do on our behalf to a large extent take into account the adoption of, and adherence to, the codes listed in question 55.
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
External investment managerYes
Investment consultantYes
Proxy votingNot applicable
Engagement overlayNot applicable
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)No
Other (Please specify):Not applicable
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)No
Incentive structure (external investments)No
Contractual relationships with external investment managersYes
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?Not applicable
62. To what extent do you encourage your service providers to become PRI signatories?To a small extent
64. To what extent do you encourage peer organisations to become PRI signatories?To a small extent
65. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers?To a large extent
67. Have you revisited any relationships with service providers in light of RI/ESG issue-related capabilities?No
68. Have you engaged in dialogue, lobbying or initiatives pertaining to government policy and/or industry regulations (for example, stock exchanges, accounting standards) related to RI/ESG issues in 2007?To a moderate extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?We awarded equity mandates to four specialised ESG asset managers, selected largely on the basis of their capacity to integrate ESG issues in their investment processes. We have also hired two external ESG rating agencies to monitor all our investment portfolios, be they internally or externally managed. Regarding internal operations, most purchases (offices, travel etc.) are conducted, by law, through a separate legal entity, the Caisse des dépôts (CDC). This entity has decided to include sustainable development issues in all its strategic developments, but we do not have a precise view, or any influence, on how they select their suppliers. CDC is a signatory of the PRI.
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?Not applicable
71. Please add any overall comments and clarifications related to Principle 4 here.Within the work of the European association of public sector pension institutions (EAPSPI, our peer group association) we have contributed to a review of European regulations on ESG investments for pension funds. This review was done for one of the association's members, with the purpose to lobby for ESG investment regulations in its country of origin. We also contributed to the association's discussions on ESG investments.
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?No
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?No Answer
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:We have no view on this question, as we have not yet finalized our own direct engagement policy.
75. To what extent do you participate in the following RI/ESG issue-related collaborative engagement initiatives and/or industry associations? For those not listed, please use the "other" field:No Answer
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?Not applicable
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?Not applicable
79. Please add any overall comments and clarifications related to Principle 5 here.We rely, by law, on external asset managers for all equity investments. The four external asset managers we have appointed are all specialised ESG asset managers, and participate in a number of the initiatives listed in question 75. We have not yet finalized our direct engagement policy.
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries and the public
81. Please indicated how this disclosure of how RI/ESG issues are integrated into your investment processes can be obtained (a URL would be sufficient):Press releases and roadshow about our investment policy. Our SRI Charter is available online (http://www.erafp.fr/ca/charte_ISR.pdf).
82. To what extent do you disclose your annual (proxy) voting record?Planning to in 2008
83. Please indicated how your (proxy) voting record can be obtained (a URL would be sufficient):No Answer
84. Do you systematically report (privately and/or publicly) on your RI/ESG issue-related engagement activities, results and progress?To a large extent
85. Please indicate how your reporting on RI/ESG issue-related engagement activities, results and progress can be obtained (if it is publicly available, a URL would be sufficient):For the time being, detailed quarterly reporting is done to the Board of Trustees. We will define how and what to report publicly regarding the implementation of our ESG policy in 2008.
86. Did you communicate on RI/ESG issues and the PRI to beneficiaries or plan participants in 2007?To a small extent
87. Please indicate how your communication on RI/ESG issues and the PRI to beneficiaries or plan participants can be obtained (if it is publicly available, a URL would be sufficient):www.rafp.fr
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?Planning to in 2008
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Investment policy,Investment decisions,Engagement,Proxy voting
90. Have you sought to determine what impact your overall RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behavior or performance?Not at all
91. Have you sought to determine what impact your RI/ESG issue-related approach has had on the performance of your portfolio?Planning to in 2008
92. Have you sought to determine what impact your RI/ESG issue-related efforts, requests and guidance have had on the consideration of RI/ESG issues by your external service providers excluding external investment managers (for example: research providers, consultants, etc.)?Planning to in 2008
93. Do you report on progress and/or achievements relating to the PRI or RI, and how would you like to publish your response to this assessment?Please automatically publish our responses to the reporting and assessment tool in full on the PRI website
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?We have provided detailed quarterly reports on the implementation of our ESG policy in the investment portfolios to the Board of trustess, as from the third quarter 2007. We will define how to report publicly in 2008.
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?We started implementation of our ESG policy in the second half of 2007. Before we start reporting publicly, we need some more finetuning of the framework.
96. Please add any overall comments and clarifications related to Principle 6 here.For the end of 2008, the Board of Trustees has asked for a full review of the implementation of the ESG policy. This will include, as in the quarterly reports, detailed reviews of how the different portfolios take into account the ESG requirements, but also a cost/benefit analysis, an impact analysis, and proposals for how to move forward.
Emerging Markets
97. To what extent have you actively thought about how to integrate RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments?Not at all
98. Please describe your activities with regards to integrating RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments.By law, we are not allowed to invest outside the OECD countries. We will ask for a change to this regulation. If our request is accepted, we will seek to diversify our investments into emerging markets, and since our ESG policy applies to all our investments, we will then investigate the specific questions linked to ESG in emerging markets.
99. To what extent do you believe the integration of ESG issues in emerging markets is as relevant as the integration of ESG issues in other markets?To a greater extent
100. To what extent did you employ the following approaches in your 2007 active ownership strategy in emerging markets?
(Proxy) votingNot Applicable
Direct engagement conducted privatelyNot Applicable
Direct engagement conducted publiclyNot Applicable
Collaborative engagementNot Applicable
Filing shareholder resolutionsNot Applicable
Co-filing shareholder resolutionsNot Applicable
Other (Please specify): Not relevant Not Applicable
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?Not Applicable
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.
2.
3.
103. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues in emerging markets?
AdoptionTo a large extent
AdherenceTo a large extent
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?Not at all
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?Not at all
106. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers investing in emerging markets?Not at all
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?Not at all
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?Not at all
109. Have you sought to determine what impact your RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behaviour or performance in emerging markets?Not at all
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.By law, we are not allowed to invest outside the OECD countries. We will ask for a change to this regulation. If our request is accepted, we will seek to diversify our investments into emerging markets, and since our ESG policy applies to all our investments, we will then investigate the specific questions linked to ESG in emerging markets. Regarding question 103, the rating of multinational companies operating (but not headquartered) in emerging markets largely takes into account their adherence to international norms.
111. What is your top PRI-related goal/priority for emerging markets in 2008?Getting regulatory approval to invest in emerging markets.
Closing Comments
112. Why did your organisation join the PRI?As a public body, the ERAFP wished to set an example by signing the PRI.
113. Please describe the benefits you have enjoyed as a result of signing the PRI:It is especially useful as a tool to benchmark our ESG investment policy.
114. To what extent do you believe the PRI has succeeded in changing investor behaviour and/or raising awareness or capacity on RI/ESG issues? Do you have any examples you could share?The PRI have been very successful in promoting the acceptance that ESG issues, may, or indeed should, be taken into account by investors.
115. What are the top three activities the PRI Secretariat could undertake to enhance and encourage further implementation of the PRI by current and prospective signatories?
1.We believe the PRI should deal more explicitly with potential conflicts of interest between purely financial and ESG considerations. None of the principles refer explicitly to this crucial dilemma. We stress that we do not have any dogmatic view on how an investor should deal with potential trade-offs, but we believe it is necessary to go one step further than measuring the financial impact of ESG criteria. For example, if there is a negative impact, how do you deal with it?
2.NR
3.NR
116. What are your top three PRI-related goals/priorities for 2008?
1.Define a format for public reporting on the implementation of our ESG policy.
2.Define a (direct) engagement policy.
3.Define a (direct) proxy voting policy.
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 2
2Principle 5
3Principle 6
4Principle 4
5Principle 1
Least difficult
6
Principle 3