Building a better tomorrow together
A journey into why ESG matters, how investors can help to change the world for good and the Amundi advantage in making this happen.
Favoriser le changement par l'innovation
La finance a un rôle essentiel à jouer dans la résolution des problèmes les plus urgents du monde d'aujourd'hui. Découvrez comment Amundi, le premier gestionnaire d'actifs européen[1], ouvre la voie de l'innovation.
As COP 26 has highlighted, the energy transition is more vital than ever- but must be managed in a socially acceptable way, according to Valerie Baudson, CEO of Amundi.
The looming risk of climate emergency remains more pressing than ever: according to Nasa [1], last year was the hottest ever on record, a fact marked by huge hurricanes and raging wildfires.
Baudson explains. ‘I am a pragmatist, totally committed to the idea of transition. But on one fundamental condition: the transition can only happen if it is fair to everyone’ she says.
‘The responsibility of investors is to finance an energy transition that can only be viable if it is done with fairness. This is the biggest challenge for the future,’ she emphasises.
This is why Amundi, Europe’s largest asset manager [2], made ESG one of its four founding pillars in 2010, and why it has now committed to introducing ESG research into 100% of its active open funds by the end of 2021.
‘As a world leader, we have a responsibility towards society, and Amundi will honour it,’ she says.
At the same time, Amundi is committed to working as an innovator within financial markets to help finance the transition to a low-carbon economy across all geographies, with an emphasis on areas where it is most needed.
In 2018, Amundi launched the world’s largest green bond fund focused on developing markets. This is significantly increasing the scale and pace of climate finance in the developing world, by bringing in capital from a network of institutional investors across Europe and the Middle East.
It's not only climate change that’s being targeted, however. During 2020, many institutions and governments launched social bonds, often as a way of raising capital to address problems caused by the pandemic: one example is the EU’s social bond to help member states finance support for people whose employment was hit by lockdowns. Amundi launched a social bond fund in December 2020 to help support this rapidly-growing area of finance.
Another game-changing initiative during 2020 was Amundi’s partnership with the Asian Infrastructure Investment Bank to launch the Climate Change Investment Framework in order to drive Asia’s green recovery and transition.
The framework takes a holistic approach and will equip investors with a new tool to assess climate change risks and opportunities in line with the three objectives of the Paris Agreement.
Most recently, in the beginning on 2021, Amundi launched the just transition for climate fund. The fund seek to provide investors with a unique solution to measure and integrate the financial risks associated with climate change and support a transition to a low-carbon economy that is socially inclusive.
Financial markets and asset managers have a vital role to play, and investors are waking up to this fact
INNOVATION AT AMUNDI
Fighting humanity’s many challenges
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 30 September 2021
Doc ID# 1849836
Sources:
[1] https://www.theguardian.com/environment/2021/jan/14/2020-hottest-year-on-record-nasa
[2] IPE "Top 500 asset managers” published in June 2021 and based on AUM as of December 2020
- Amundi Asset Management as at 31 August 2021.
- https://www.theguardian.com/environment/2021/jan/14/2020-hottest-year-on-record-nasa
- https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change
As COP 26 has highlighted, the energy transition is more vital than ever- but must be managed in a socially acceptable way, according to Valerie Baudson, CEO of Amundi.
The looming risk of climate emergency remains more pressing than ever: according to Nasa [1], last year was the hottest ever on record, a fact marked by huge hurricanes and raging wildfires.
Baudson explains. ‘I am a pragmatist, totally committed to the idea of transition. But on one fundamental condition: the transition can only happen if it is fair to everyone’ she says.
‘The responsibility of investors is to finance an energy transition that can only be viable if it is done with fairness. This is the biggest challenge for the future,’ she emphasises.
This is why Amundi, Europe’s largest asset manager [2], made ESG one of its four founding pillars in 2010, and why it has now committed to introducing ESG research into 100% of its active open funds by the end of 2021.
‘As a world leader, we have a responsibility towards society, and Amundi will honour it,’ she says.
At the same time, Amundi is committed to working as an innovator within financial markets to help finance the transition to a low-carbon economy across all geographies, with an emphasis on areas where it is most needed.
In 2018, Amundi launched the world’s largest green bond fund focused on developing markets. This is significantly increasing the scale and pace of climate finance in the developing world, by bringing in capital from a network of institutional investors across Europe and the Middle East.
It's not only climate change that’s being targeted, however. During 2020, many institutions and governments launched social bonds, often as a way of raising capital to address problems caused by the pandemic: one example is the EU’s social bond to help member states finance support for people whose employment was hit by lockdowns. Amundi launched a social bond fund in December 2020 to help support this rapidly-growing area of finance.
Another game-changing initiative during 2020 was Amundi’s partnership with the Asian Infrastructure Investment Bank to launch the Climate Change Investment Framework in order to drive Asia’s green recovery and transition.
The framework takes a holistic approach and will equip investors with a new tool to assess climate change risks and opportunities in line with the three objectives of the Paris Agreement.
Most recently, in the beginning on 2021, Amundi launched the just transition for climate fund. The fund seek to provide investors with a unique solution to measure and integrate the financial risks associated with climate change and support a transition to a low-carbon economy that is socially inclusive.
INNOVATION AT AMUNDI
Fighting humanity’s many challenges
Valérie Baudson,
CEO, Amundi
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 30 September 2021
Doc ID# 1849836
Sources:
[1] https://www.theguardian.com/environment/2021/jan/14/2020-hottest-year-on-record-nasa
[2] IPE "Top 500 asset managers” published in June 2021 and based on AUM as of December 2020
- Amundi Asset Management as at 31 August 2021.
- https://www.theguardian.com/environment/2021/jan/14/2020-hottest-year-on-record-nasa
- https://www.theguardian.com/sustainable-business/2017/jul/10/100-fossil-fuel-companies-investors-responsible-71-global-emissions-cdp-study-climate-change
Collaboration has helped to find a vaccine for Covid-19, but the underlying challenges remain
Collaboration has helped to find a vaccine for Covid-19, but the underlying challenges remain
The inclusion of Environmental, social and governance (ESG) criteria are making waves among investors. An increasing number of people are becoming aware of the power their investments can have. Amundi, Europe’s largest asset manager, [1] wants to do more than ‘just’ support businesses that already comply with ESG practices.
The firm, which is one of the pioneers in the sustainable investment space, makes the case for so-called ESG improvers. Those companies haven’t reached their full ESG potential yet, but Amundi believes they are on the way to doing so.
Put differently, the asset manager aims to identify and extract value from businesses on what we believe is an upward ESG trajectory. Amundi’s head of equities, Kasper Elmgreen, argues that investors may benefit from allocating money to businesses where the ESG premium is not priced in fully yet.
As more and more investors are flocking to ESG companies that already provide good ESG credentials, the ESG impact of those investments is reduced - you’re essentially preaching to the choir.
INNOVATION AT AMUNDI
ESG winners of tomorrow
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 17 September 2021
Doc ID# #1821058
Sources:
[1] IPE "Top 500 asset managers” published in June 2021 and based on AUM as of December 2020
[2] Amundi Asset Management, as at 31 August 2021
[3] https://research-center.amundi.com/page/Article/Insights-Paper/2020/09/Looking-for-hidden-ESG-gems-a-new-frontier-for-responsible-investing-with-improvers?search=true
[4] S&P Global Market Intelligence analysed 17 exchange-traded and mutual ESG funds, 14 of which outperformed the broader market through 31 July 2020. S&P Global Market Intelligence:
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/esg-funds-outperform-s-p-500-amid-covid-19-helped-by-tech-stock-boom-59850808
The inclusion of Environmental, social and governance (ESG) criteria are making waves among investors. An increasing number of people are becoming aware of the power their investments can have. Amundi, Europe’s largest asset manager, [1] wants to do more than ‘just’ support businesses that already comply with ESG practices.
The firm, which is one of the pioneers in the sustainable investment space, makes the case for so-called ESG improvers. Those companies haven’t reached their full ESG potential yet, but Amundi believes they are on the way to doing so.
Put differently, the asset manager aims to identify and extract value from businesses on what we believe is an upward ESG trajectory. Amundi’s head of equities, Kasper Elmgreen, argues that investors may benefit from allocating money to businesses where the ESG premium is not priced in fully yet.
INNOVATION AT AMUNDI
ESG winners of tomorrow
Kasper Elmgreen,
head of equities, Amundi
‘As more and more investors are flocking to ESG companies that already provide good ESG credentials, the ESG impact of those investments is reduced - you’re essentially preaching to the choir,’ Elmgreen says.
‘We step away from the traditional best-in-class approach and focus on companies that sit in the middle of the valuation curve, so businesses that are neither great nor terrible. We’re looking for opportunities in other places than the standard best-in-class investor.’
Thinking outside the box
The link between ESG and valuation
According to Elmgreen, ESG improvers enable investors to tap into trends well before they materialise and may help increase the return potential of portfolios.
That’s one of the reasons why Amundi, in line with its philosophy of helping firms meet their sustainability goals, set out to accompany businesses in their ESG journey. ‘We are actively supporting companies seeking to improve in ESG areas in which they are currently underperforming,’ Elmgreen states.
Amundi’s search for ESG improvers follows a dynamic and forward-looking approach, which ensures that each company’s ESG potential is assessed on an individual basis.
1
Buy Low, Sell High
We extend this common investment philosophy to the realm of ESG and believe that this will increasingly get rewarded by the market.
Best In Class
Seeking ESG improvers through an all-inclusive approach across all sectors.
2
Fundamental Approach
Our analysis goes beyond static ESG ratings, we include forward looking qualitative assessments.
3
Materiality
ESG improvement must be tangible and relevant, therefore we focus on financially material factors.
4
Improvers & Leaders
The return potential of the improvers combined with the quality of the leaders may enhance the risk-adjusted return profile.
5
From Elmgreen’s perspective, Europe is particularly interesting for ESG investors, both in terms of established and up-and-coming players. It’s not only home to many global ESG leaders, but also has the most advanced ESG framework in the world. [3]
Covid-19 and the resulting market turmoil have confirmed the increasing relevance of integrating ESG criteria into investment decisions, with ESG funds weathering the crisis better than their traditional counterparts. [4]
‘The whole ESG arena is booming,’ Elmgreen points out. ‘When we ask investors what matters to them, ESG consistently comes up as one of their top priorities. That’s great news, but, as I said, as more people are joining the ESG space, we just have to accept that the output gets less. Our ESG improvers concept enables us to find opportunities off the beaten track.’
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 17 September 2021
Doc ID# #1821058
Sources:
[1] IPE "Top 500 asset managers” published in June 2021 and based on AUM as of December 2020
[2] Amundi Asset Management, as at 31 August 2021
[3] https://research-center.amundi.com/page/Article/Insights-Paper/2020/09/Looking-for-hidden-ESG-gems-a-new-frontier-for-responsible-investing-with-improvers?search=true
[4] S&P Global Market Intelligence analysed 17 exchange-traded and mutual ESG funds, 14 of which outperformed the broader market through 31 July 2020. S&P Global Market Intelligence:
https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/esg-funds-outperform-s-p-500-amid-covid-19-helped-by-tech-stock-boom-59850808
Amundi’s five guiding principles for ESG Improvers [2]
‘As more and more investors are flocking to ESG companies that already provide good ESG credentials, the ESG impact of those investments is reduced - you’re essentially preaching to the choir,’ Elmgreen says.
‘We step away from the traditional best-in-class approach and focus on companies that sit in the middle of the valuation curve, so businesses that are neither great nor terrible. We’re looking for opportunities in other places than the standard best-in-class investor.’
Thinking outside the box
The link between ESG and valuation
Sources:
Amundi (https://research-center.amundi.com/page/Article/Insights-Paper/2020/09/Looking-for-hidden-ESG-gems-a-new-frontier-for-responsible-investing-with-improvers?search=true). As of September 2020.
Source:
Amundi (https://research-center.amundi.com/page/Article/Insights-Paper/2020/09/Looking-for-hidden-ESG-gems-a-new-frontier-for-responsible-investing-with-improvers?search=true). As of September 2020.
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 20 September 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use:
Doc ID#1838632
Sources:
[1] IPCC, Climate Change 2021: the Physical Science Basis, 9 August 2021
[2] BCG, Global Asset Management 2021: The $100 Trillion Machine, July 2021
[3] BCG, Global Asset Management 2021: The $100 Trillion Machine, July 2021
[4] Bloomberg, ESG assets may hit $53 trillion by 2025, a third of global AUM, 21 February 2021
[5] Amundi/ Bloomberg, December 2020
[6] MSCI indices referenced are MSCI World Climate Change Index, MSCI Europe Climate Change Index and MSCI EM Climate Change Index, net returns in USD. As at 31 July 2021
[7] European Commission https://ec.europa.eu/info/publications/sustainable-finance-renewed-strategy_en, March 2018
While the Covid-19 crisis had a devastating effect on society and global economies, it had a positive effect on global carbon dioxide emissions which fell by 6.4% during 2020. However emissions have rebounded as economic activity has begun to recover.
It’s important that companies pay their fair share of tax, which can be used to support infrastructure and social cohesion. Applying this type of pressure is a relatively new theme within ESG investing, but it is gathering momentum, particularly in Europe
INNOVATION AT AMUNDI
Index investing and the climate emergency
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 20 September 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use:
Doc ID#1838632
Sources:
[1] IPCC, Climate Change 2021: the Physical Science Basis, 9 August 2021
[2] BCG, Global Asset Management 2021: The $100 Trillion Machine, July 2021
[3] BCG, Global Asset Management 2021: The $100 Trillion Machine, July 2021
[4] Bloomberg, ESG assets may hit $53 trillion by 2025, a third of global AUM, 21 February 2021
[5] Amundi/ Bloomberg, December 2020
[6] MSCI indices referenced are MSCI World Climate Change Index, MSCI Europe Climate Change Index and MSCI EM Climate Change Index, net returns in USD. As at 31 July 2021
[7] European Commission https://ec.europa.eu/info/publications/sustainable-finance-renewed-strategy_en, March 2018
While the Covid-19 crisis had a devastating effect on society and global economies, it had a positive effect on global carbon dioxide emissions which fell by 6.4% during 2020. However emissions have rebounded as economic activity has begun to recover.
INNOVATION AT AMUNDI
Index investing and the climate emergency
Caroline Le Meaux,
head of ESG research, voting and engagement at Amundi
The past five years have been the hottest recorded since 1850; [1] climate change has become an emergency. For investors committed to a sustainable future, we believe index investing presents opportunities for positive climate impact.
Source:
https://carbonmonitor.org/
The colours in the bar chart above correspond to the colours for each sectos shown in the second graphic.
The percentage for each sector shows the contribution of this sector to the total change in emissions. The percentages in blue boxes show the sector change in 2020 vs 2019.
Expectations are high for investors to act with urgency in tackling climate change. But just how can the investment industry play its part? The sector proved resilient in 2020: global assets grew 11% ending the year on $103 trillion, [2] while assets in passive strategies totalled $22 trillion in 2020. [3] These volumes represent a major opportunity to drive sustainable change.
Environmental, social and governance (ESG) investing became truly mainstream in 2020. Bloomberg [4] now predicts global ESG assets reaching $53 trillion by 2025, and ESG represented 51% of all assets allocated to ETFs in 2020 [5]. This growth stems from both investor demand and from regulation.
Why climate matters to investors
The increasing urgency of climate change has become a key concern for investors. Firstly, it has become recognised as an investment risk. Secondly, investment opportunities arising from the energy transition could outweigh climate-related risks over time. Thirdly, we are increasingly seeing investors seeking to reflect their sustainability values in their asset allocation. This desire from investors has been facilitated by climate investing as proven by MSCI climate indices, which have shown consistent outperformance vs. their parent index over the last five years [6].
The regulatory landscape is also evolving and driving change. The European Commission Action Plan of 2018 [7] introduced initiatives for standardisation and transparency of disclosure for ESG and climate issues. In July 2021, the EC set out its intention to achieve climate neutrality across the EU by 2050. This incorporates at least 55% net reduction in greenhouse gas emissions by 2030. Specifically this means the phase-out of coal, curtailing deforestation, accelerating the transition to electric vehicles, and investment in renewables. Developed countries and international financial institutions are expected to play a key role.
Historically climate investing focused on impact investing strategies or active investment. However indexing and climate investing are compatible. Amundi was at the forefront of climate index innovations, co-developing the MSCI Low Carbon Leaders index series with French and Swedish pension funds in 2014.
Today, improvements in the quality and availability of ESG data have led to a new generation of climate indices. These consider indirect emissions and future climate commitments in addition to historical data. The Climate Transition Benchmark and Paris-Aligned Benchmark are two new comprehensive pan-European climate index labels enabling passive investors to incorporate climate goals into their portfolios in alignment with their individual objectives. They are the first such pan-European sustainable indices.
In addition to choosing a suitable climate index, selection of an asset manager with a robust engagement and voting strategy is essential to achieving climate and investment goals. Exclusions, divestment and engagement are all possible with passive investing. In fact tangible change achieved across a range of sectors in recent years has demonstrated the importance of selecting a manager that “walks the talk” on engagement issues targeting climate change.
Climate & Index investing
Amundi is deeply committed to meeting investors’ investment objectives while contributing positively to addressing society’s key global challenges. Against this backdrop, our range of climate ETFs seek to enable you to play your part in responding to the climate emergency.
Find out more at www.amundietf.com
Climate Investing with Amundi ETF
Amundi is deeply committed to meeting investors’ investment objectives while contributing positively to addressing society’s key global challenges. Against this backdrop, our range of climate ETFs seek to enable you to play your part in responding to the climate emergency.
Find out more at www.amundietf.com
Climate Investing with Amundi ETF
The past five years have been the hottest recorded since 1850; [1] climate change has become an emergency. For investors committed to a sustainable future, we believe index investing presents opportunities for positive climate impact.
IMPORTANT INFORMATION
This document contains information about Amundi Planet Emerging Green One fund. The management company of the Fund is Amundi Luxembourg SA, 5 allée Scheffer, L-2520 Luxembourg.
This material is for information purposes only, is not a recommendation, financial analysis or advice, and does not constitute a solicitation, invitation or offer to purchase or sell the Fund in any jurisdiction where such offer, solicitation or invitation would be unlawful. This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any U.S. Person (as defined in the prospectus of the Funds). The Funds have not been registered in the United States under the Investment Company Act of 1940 and units of the Funds are not registered in the United States under the Securities Act of 1933. Accordingly, this material is for distribution or to be used solely in jurisdictions where it is permitted and to persons who may receive it without breaching applicable legal or regulatory requirements, or that would require the registration of Amundi or its affiliates in these countries.
Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment in the Fund may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability. It is the responsibility of investors to read the legal documents in force in particular the current prospectus of the Fund. Subscriptions in the Fund will only be accepted on the basis of their latest prospectus available in English or in the local language of EU registration, and/or the Key Investor Information Document (“KIID” available in local language in EU countries of registration) which together with the latest annual and semi-annual reports may be obtained, free of charge, at the registered office of the management company of the Fund, or at www.amundi.lu. A summary of information about investors rights and collective redress mechanisms can be found in English on the regulatory page at https://about.amundi.com.
Please note that the management company may de-notify arrangements made for marketing as regards units or shares of the Fund in a Member State of the EU in respect of which it has made a notification.
The information in this document is as at 31 August 2021 except where otherwise stated. This material is based on sources that Amundi considers to be reliable at the time of publication. Data, opinions and analysis may be changed without notice. Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held responsible for any decision or investment made on the basis of information contained in this material.
The information contained shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi.
Date of publication: 17 September 2021
Doc ID: 1821074
---
Amundi Asset Management
A French simplified joint stock company (société par actions simplifiée), a portfolio management company approved by the “Autorité des marchés financiers” or “AMF” under the number GP 04000036 whose registered office is located 90 boulevard Pasteur, 75015 Paris – France –, under the Paris trade register number 437 574 452 RCS.
In compliance with Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on free movement of such data (“GDPR”) and as applicable, investors can exercise the right to access, rectify or ask for deletion of the personal data the Amundi Group holds on them. To enforce this right, please contact dpo@amundi.com.
Yerlan Syzdykov, Amundi’s global head of emerging markets & co-head of emerging markets fixed income, has a big task on his hands. He and his team are responsible for convincing companies and governments in emerging markets to become more sustainable.
Often this means asking for changes to policy, business models and supply chains to be made, at significant upfront cost.
So, how does Syzdykov get emerging market companies to engage on matters of sustainability, and how is he able to convince the business owners and leaders in these societies to invest in the collective future of our planet?
It begins with sharing his enthusiasm on the scale of the opportunity. With 80% of people in the world now living in emerging markets, Syzdykov believes it is here where the biggest impact will be felt.
‘I think the scope for ESG investing in emerging markets over the next 100 years is huge, it is certainly the focus of the future for us.’
With all eyes on the opportunity, there is a lot of work to do to create the processes and systems needed to win hearts and minds on the ground, as Syzdykov explains.
In practice, the shift to a new level means moving away from an investment strategy based simply on exclusion criteria, to having a much bigger impact.
‘We cannot change the world by just passively not investing in some of the companies or governments that are not in line with our ESG policies,’ Syzdykov argues.
Instead, he and his team are taking a much more activist role, engaging with companies, and governments to gradually walk them through the process of transition.
‘We see a lot of opportunities for engagement because through our existing relationships, companies and governments are telling us they are willing to change, but of course, we need to educate and inform them of what that entails.’
The beauty of ESG, he says, is that everyone has an interest in it. The most challenging part however is to explain that at the end of the journey there is a benefit for all parties involved.
Syzdykov argues that if companies or countries perceive sustainability to be a bureaucratic straight jacket, with costs associated, it will be harder for them to recognise the long-term benefits.
However, once the large organisations that control capital such as asset owners, and asset managers all move in the same direction, suddenly, it will be clear to the companies and the countries involved that this is a long-term, irreversible transition. Add international bodies such as the World Bank and the IMF to the mix and the sustainability drive really gains momentum.
Getting these international bodies involved at an early stage was something Syzdykov and his team believed would pay dividends. Indeed, Amundi was the first and largest investor in emerging market green bonds.
In March 2018, together with the IFC (a member of the World Bank Group), Amundi launched the Amundi Planet Emerging Green One fund (AP EGO). Green bonds are, put simply, a way for companies, NGOs and even governments to raise finance for environmental projects. Since each bond has a defined end goal, and green bond selection is aligned with the guidelines from internationally recognised green bond frameworks, investors know that their money is being put to work to build a greener future.
At $1.5bn, AP EGO was the world’s largest targeted green bond fund launch focused on emerging markets. This was followed by a second version of the fund with an expanded remit.
Amundi realised the most efficient way to implement ESG policies around the world, was to cajole international institutions and governments to act on a regulatory basis.
‘A lot of countries would hide behind the sovereignty clause, saying “we’re sovereign, therefore, you guys cannot tell us what to do” so that’s where we needed the IMF or the World Bank or the United Nations to come and say “this is not an invasion into your private life, this is a serious issue for the whole planet”’.
The message is clear: shifting to a greener future will require massive investment, and while the costs might seem large, they have to be met to avert worse global warming scenarios and the consequent economic and social problems. This is where, Syzdykov says, the controversy and intellectual difficulty comes when implementing ESG principles in emerging markets.
However, large asset managers such as Amundi, he believes, are at an advantage as they have significant financial resources to build teams for ESG analysis and engagement, as well as investment.
‘Only a few investors around the world can say this because not a lot of emerging market investors have an integrated model like we do.’
That, however, does not come at the expense of industry collaboration, and Syzdykov believes this is a vital ingredient to the successful implementation of ESG in emerging markets.
Citing an example of when he invited other asset managers to join his discussions with the Argentinian and Ecuadorian governments, Syzdykov was pleasantly surprised by how many of his peers expressed interest in talking through the issues.
‘While it is important for us to popularise our ideas and principles, we also have to gain consensus and convince others to join us on this journey. For Amundi the purpose of the exercise is to effect a real change and that will only be possible if we have enough like-minded investors pushing along with us.’
INNOVATION AT AMUNDI
Bringing ESG to emerging markets
IMPORTANT INFORMATION
This document contains information about Amundi Planet Emerging Green One fund. The management company of the Fund is Amundi Luxembourg SA, 5 allée Scheffer, L-2520 Luxembourg.
This material is for information purposes only, is not a recommendation, financial analysis or advice, and does not constitute a solicitation, invitation or offer to purchase or sell the Fund in any jurisdiction where such offer, solicitation or invitation would be unlawful. This information is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities or services in the United States or in any of its territories or possessions subject to its jurisdiction to or for the benefit of any U.S. Person (as defined in the prospectus of the Funds). The Funds have not been registered in the United States under the Investment Company Act of 1940 and units of the Funds are not registered in the United States under the Securities Act of 1933. Accordingly, this material is for distribution or to be used solely in jurisdictions where it is permitted and to persons who may receive it without breaching applicable legal or regulatory requirements, or that would require the registration of Amundi or its affiliates in these countries.
Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment in the Fund may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability. It is the responsibility of investors to read the legal documents in force in particular the current prospectus of the Fund. Subscriptions in the Fund will only be accepted on the basis of their latest prospectus available in English or in the local language of EU registration, and/or the Key Investor Information Document (“KIID” available in local language in EU countries of registration) which together with the latest annual and semi-annual reports may be obtained, free of charge, at the registered office of the management company of the Fund, or at www.amundi.lu. A summary of information about investors rights and collective redress mechanisms can be found in English on the regulatory page at https://about.amundi.com.
Please note that the management company may de-notify arrangements made for marketing as regards units or shares of the Fund in a Member State of the EU in respect of which it has made a notification.
The information in this document is as at 31 August 2021 except where otherwise stated. This material is based on sources that Amundi considers to be reliable at the time of publication. Data, opinions and analysis may be changed without notice. Amundi accepts no liability whatsoever, whether direct or indirect, that may arise from the use of information contained in this material. Amundi can in no way be held responsible for any decision or investment made on the basis of information contained in this material.
The information contained shall not be copied, reproduced, modified, translated or distributed without the prior written approval of Amundi.
Date of publication: 17 September 2021
Doc ID: 1821074
---
Amundi Asset Management
A French simplified joint stock company (société par actions simplifiée), a portfolio management company approved by the “Autorité des marchés financiers” or “AMF” under the number GP 04000036 whose registered office is located 90 boulevard Pasteur, 75015 Paris – France –, under the Paris trade register number 437 574 452 RCS.
In compliance with Regulation (EU) 2016/679 on the protection of natural persons with regard to the processing of personal data and on free movement of such data (“GDPR”) and as applicable, investors can exercise the right to access, rectify or ask for deletion of the personal data the Amundi Group holds on them. To enforce this right, please contact dpo@amundi.com.
Yerlan Syzdykov, Amundi’s global head of emerging markets & co-head of emerging markets fixed income, has a big task on his hands. He and his team are responsible for convincing companies and governments in emerging markets to become more sustainable.
Often this means asking for changes to policy, business models and supply chains to be made, at significant upfront cost.
So, how does Syzdykov get emerging market companies to engage on matters of sustainability, and how is he able to convince the business owners and leaders in these societies to invest in the collective future of our planet?
It begins with sharing his enthusiasm on the scale of the opportunity. With 80% of people in the world now living in emerging markets, Syzdykov believes it is here where the biggest impact will be felt.
‘I think the scope for ESG investing in emerging markets over the next 100 years is huge, it is certainly the focus of the future for us.’
With all eyes on the opportunity, there is a lot of work to do to create the processes and systems needed to win hearts and minds on the ground, as Syzdykov explains.
In practice, the shift to a new level means moving away from an investment strategy based simply on exclusion criteria, to having a much bigger impact.
‘We cannot change the world by just passively not investing in some of the companies or governments that are not in line with our ESG policies,’ Syzdykov argues.
Instead, he and his team are taking a much more activist role, engaging with companies, and governments to gradually walk them through the process of transition.
‘We see a lot of opportunities for engagement because through our existing relationships, companies and governments are telling us they are willing to change, but of course, we need to educate and inform them of what that entails.’
The beauty of ESG, he says, is that everyone has an interest in it. The most challenging part however is to explain that at the end of the journey there is a benefit for all parties involved. Syzdykov argues that if companies or countries perceive sustainability to be a bureaucratic straight jacket, with costs associated, it will be harder for them to recognise the long-term benefits.
However, once the large organisations that control capital such as asset owners, and asset managers all move in the same direction, suddenly, it will be clear to the companies and the countries involved that this is a long-term, irreversible transition. Add international bodies such as the World Bank and the IMF to the mix and the sustainability drive really gains momentum.
Getting these international bodies involved at an early stage was something Syzdykov and his team believed would pay dividends. Indeed, Amundi was the first and largest investor in emerging market green bonds.
In March 2018, together with the IFC (a member of the World Bank Group), Amundi launched the Amundi Planet Emerging Green One fund (AP EGO). Green bonds are, put simply, a way for companies, NGOs and even governments to raise finance for environmental projects. Since each bond has a defined end goal, and green bond selection is aligned with the guidelines from internationally recognised green bond frameworks, investors know that their money is being put to work to build a greener future.
At $1.5bn, AP EGO was the world’s largest targeted green bond fund launch focused on emerging markets. This was followed by a second version of the fund with an expanded remit. Amundi realised the most efficient way to implement ESG policies around the world, was to cajole international institutions and governments to act on a regulatory basis.
‘A lot of countries would hide behind the sovereignty clause, saying “we’re sovereign, therefore, you guys cannot tell us what to do” so that’s where we needed the IMF or the World Bank or the United Nations to come and say “this is not an invasion into your private life, this is a serious issue for the whole planet”’.
The message is clear: shifting to a greener future will require massive investment, and while the costs might seem large, they have to be met to avert worse global warming scenarios and the consequent economic and social problems. This is where, Syzdykov says, the controversy and intellectual difficulty comes when implementing ESG principles in emerging markets.
However, large asset managers such as Amundi, he believes, are at an advantage as they have significant financial resources to build teams for ESG analysis and engagement, as well as investment.
‘Only a few investors around the world can say this because not a lot of emerging market investors have an integrated model like we do.’
That, however, does not come at the expense of industry collaboration, and Syzdykov believes this is a vital ingredient to the successful implementation of ESG in emerging markets.
Citing an example of when he invited other asset managers to join his discussions with the Argentinian and Ecuadorian governments, Syzdykov was pleasantly surprised by how many of his peers expressed interest in talking through the issues.
‘While it is important for us to popularise our ideas and principles, we also have to gain consensus and convince others to join us on this journey. For Amundi the purpose of the exercise is to effect a real change and that will only be possible if we have enough like-minded investors pushing along with us.’
INNOVATION AT AMUNDI
Bringing ESG to emerging markets
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 17 September 2021
Doc ID#
Sources:
[1] IPE "Top 500 asset managers” published in June 2021 and based on AUM as of December 2020
How effective can your savings be in addressing the big issues facing our planet?
As Europe’s largest asset manager [1], Amundi engages with companies on issues such as climate change, supporting them on the pathway to reducing emissions.
‘We have two ways of engaging with companies,’ says Caroline Le Meaux, head of ESG research, engagement and voting policy at Amundi. The first is on a case by case basis: when assessing a company’s ESG credentials, which is part of the fundamental research Amundi performs on all the companies it holds or might hold. ‘During the research process, we might well have a conversation about ESG quality, and cover, for example, any risks or controversies we have uncovered. We are always looking to help the company improve its overall ESG quality.’
The second approach is more thematic and begins by considering big macro-economic themes, of which climate change is an obvious example. ‘We want to make sure that companies are reducing their emissions. We have specific engagement streams around, for example, phasing out fossil fuels; or around the Science Based Target Initiative, which aims to provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals.’
While climate change is hugely important, Amundi’s ESG engagement covers a host of different areas, Le Meaux points out. Other engagement streams within the ‘E - Enviornment’ of ESG revolve around ‘natural capital preservation’, which covers biodiversity, water scarcity and pollution, as well as deforestation.
Within the social pillar of ESG, a particular area of concern is the wellbeing of employees.
‘Inequality is another very important issue for us, so we have engagement streams around a living wage. The aim is to choose companies we think are very exposed to these areas - big manufacturers for example - and check that they are offering a living wage to their employees, both direct employees and their suppliers,’ Le Meaux says.
Within the governance pillar, issues such as gender diversity are covered, as well as the levels of tax that companies pay.
‘It’s important that companies pay their fair share of tax, which can be used to support infrastructure and social cohesion. Applying this type of pressure is a relatively new theme within ESG investing, but it is gathering momentum, particularly in Europe, with some of the largest pension and state funds getting involved. The idea is also gaining a lot of traction in Asia. We expect to see this area develop over the coming years,’ she says.
The Covid crisis has provided an example of how Amundi has been able to engage as a shareholder, voting at Annual General Meetings to ensure companies kept appropriate levels of cash rather than paying out to shareholders. ‘We want companies to act fairly and to think about the long-term welfare of all stakeholders. During 2020, in the case of those companies that put employees onto the government support schemes, we voted against their paying out dividends to shareholders, because it seemed unfair for the companies and their shareholders to benefit from state support in those circumstances.’
It’s important that companies pay their fair share of tax, which can be used to support infrastructure and social cohesion. Applying this type of pressure is a relatively new theme within ESG investing, but it is gathering momentum, particularly in Europe
INNOVATION AT AMUNDI
How Amundi helps companies hit ESG targets
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 31 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. All investors should seek professional advice prior to any investment decision, in order to determine the risks associated with the investment and its suitability.
Date of first use: 17 September 2021
Doc ID#
Sources:
[1] IPE "Top 500 asset managers” published in June 2021 and based on AUM as of December 2020
How effective can your savings be in addressing the big issues facing our planet?
As Europe’s largest asset manager [1], Amundi engages with companies on issues such as climate change, supporting them on the pathway to reducing emissions.
‘We have two ways of engaging with companies,’ says Caroline Le Meaux, head of ESG research, engagement and voting policy at Amundi. The first is on a case by case basis: when assessing a company’s ESG credentials, which is part of the fundamental research Amundi performs on all the companies it holds or might hold. ‘During the research process, we might well have a conversation about ESG quality, and cover, for example, any risks or controversies we have uncovered. We are always looking to help the company improve its overall ESG quality.’
The second approach is more thematic and begins by considering big macro-economic themes, of which climate change is an obvious example. ‘We want to make sure that companies are reducing their emissions. We have specific engagement streams around, for example, phasing out fossil fuels; or around the Science Based Target Initiative, which aims to provide companies with a clearly-defined path to reduce emissions in line with the Paris Agreement goals.’
While climate change is hugely important, Amundi’s ESG engagement covers a host of different areas, Le Meaux points out. Other engagement streams within the ‘E - Enviornment’ of ESG revolve around ‘natural capital preservation’, which covers biodiversity, water scarcity and pollution, as well as deforestation.
Within the social pillar of ESG, a particular area of concern is the wellbeing of employees.
‘Inequality is another very important issue for us, so we have engagement streams around a living wage. The aim is to choose companies we think are very exposed to these areas - big manufacturers for example - and check that they are offering a living wage to their employees, both direct employees and their suppliers,’ Le Meaux says.
Within the governance pillar, issues such as gender diversity are covered, as well as the levels of tax that companies pay.
‘It’s important that companies pay their fair share of tax, which can be used to support infrastructure and social cohesion. Applying this type of pressure is a relatively new theme within ESG investing, but it is gathering momentum, particularly in Europe, with some of the largest pension and state funds getting involved. The idea is also gaining a lot of traction in Asia. We expect to see this area develop over the coming years,’ she says.
The Covid crisis has provided an example of how Amundi has been able to engage as a shareholder, voting at Annual General Meetings to ensure companies kept appropriate levels of cash rather than paying out to shareholders. ‘We want companies to act fairly and to think about the long-term welfare of all stakeholders. During 2020, in the case of those companies that put employees onto the government support schemes, we voted against their paying out dividends to shareholders, because it seemed unfair for the companies and their shareholders to benefit from state support in those circumstances.’
INNOVATION AT AMUNDI
How Amundi helps companies hit ESG targets
Caroline Le Meaux,
head of ESG research, voting and engagement at Amundi
Amundi, an investment partner that is constantly looking ahead at the challenges and opportunities as we move
into a new era.
We believe in investing for a socially-inclusive transition to a 2 degree world. By showing investors the carbon intensity and global warming effect of their portfolio, measured on a monthly basis against key benchmarks.
A power company has committed to reducing direct greenhouse gas emissions by
by 2030
80%
It is also committed to reducing the negative effects of this transition on
workers, local communities and consumers
Amundi also has a clear policy of engaging with companies in the portfolio as a responsible investor, ensuring a dialogue that helps to make sure the
two degree scenario is met while also considering fairness to employees and other social factors.
The company scores an A on Amundi’s Just Transition rating scale
This will mean repurposing existing structures and infrastructure, such as power plants, mining areas
and coal facilities, with involvement of local stakeholders, to create value for local communities via job creation and economic growth
Amundi wants to help bring about the transition to a more carbon neutral world …
… but also seek to manage it in a just and fair manner …
… while aiming to benefit from the opportunities transition may bring.
We advocate for a
Just Transition approach.
We believe that forward thinking and innovative techniques are vital to managing energy transition as it re-shapes our world.
Electric vehicles are likely to lead a smaller workforce to assemble, and less maintenance.
This could potentially mean people losing jobs, an increase in inequality and social unrest.
Similarly, other companies may be forced to move location – which could also have potential negative effects for employees.
could be lost in Germany over the next decade as its auto industry shifts towards electric vehiclest [7]
More than
400,000 jobs
These changes will bring opportunities for innovation, but may also have huge social consequences, not always positive.
The Paris agreement pledges to keep global warming
– preferably 1.5
well below 2°C
On current plans the world is expected to breach the 1.5 degree ceiling within 12 years or less [1]
Are we on track?
The pharmaceutical industry currently has an emissions profile 55% greater than the automotive sector! [4]
could be lost in Germany over the next decade as its auto industry shifts towards electric vehiclest [7]
More than
400,000 jobs
Globally, food loss and waste have a combined carbon footprint of
[2]
metric tons of CO2.
70–91%
The power sector needs to reduce emissions by
between 2020-2035 [2]
The aviation sector is required to reduce average carbon intensity by
between 2019-2035 [3]
35–40%
sold globally would need to be electric by 2030 [5]
of new cars
64%
The fashion industry would need to cut its emissions by around
by 2030 [6]
50%
Energy and car companies are obvious examples of those that will have to restructure – but nearly all companies in the world will face some challenges.
We believe that if the world has any hope of meeting the necessary Paris targets, huge changes will be required at company level.
click to find
out more
CO2
CO2
CO2
CO2
managing the disruption stemming from a net zero pathway
IMPORTANT INFORMATION
Unless otherwise stated, all information contained in this document is from Amundi Asset Management S.A.S. and is as of 30 August 2021. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi Asset Management S.A.S. and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results.
Date of first use: 17 September 2021
Sources:
[1] https://www.bbc.co.uk/news/science-environment-55498657
[2] https://sciencebasedtargets.org/resources/legacy/2020/06/SBTi-Power-Sector-15C-guide-FINAL.pdf
[3] https://sciencebasedtargets.org/resources/files/SBTi_AviationGuidanceAug2021.pdf
[4] https://theconversation.com/big-pharma-emits-more-greenhouse-gases-than-the-automotive-industry-115285
[5] https://www.scientificamerican.com/article/ninety-percent-of-u-s-cars-must-be-electric-by-2050-to-meet-climate-goals/
[6] https://www.mckinsey.com/industries/retail/our-insights/fashion-on-climate
[7] https://www.plattform-zukunft-mobilitaet.de/wp-content/uploads/2020/03/NPM-AG-4-1-Zwischenbericht-zur-strategischen-Personalplanung-und-Entwicklung-im-Mobilit%C3%A4tssektor.pdf
Image of melting iceberg that eventually lets the water overflow the water from the edges of the pedestal
Car manufacturing line showing the transition to electric cars with less people and more robots
Another gate opening with a moving van and boxes in front of it
Amundi showing investors their portfolio analysis and strategies
Amundi people in dialoge with companies looking together at a high end
e-car charing point (e.g. tesla)
potentially escalators moving between different pedestals to connect them and give a tech look and feel
Amundi people in dialoge with companies and their employees (e.g. technician)
Employees being trained from technicians to electricians
Zoom out - illustration of someone ticking all the boxes for the Just Transition Strategy.
A door from the main pedestal opens and people walking out
bold
0.0bn
1/3
[2]
Crossheader 17 / 30 / 27
Boxout Headline 12 / 30 / 18
Boxout copy 12 / 30 / 18
HEADER 12 / 30 / 22
Call outs
35/30/45
Intro 18 / 30 / 24
Body copy 15 / 30 / 24
CO2
CO2
