Fonds de Compensation RESPONSIBLE INVESTMENT

As an institutional fund manager, FDC is aware of its ecological, social and good governance responsibilities. In 2010, FDC integrated a responsible investor policy. Since then, FDC's responsible investor policy has been evolving.

Principles

FDC invests long-term and globally and is therefore committed to a healthy and sustainable economy. As an institutional fund manager, FDC is aware of its ecological, social and good governance responsibilities. Such considerations are taken into account in FDC’s investment strategy as well as in its investment decisions.

While the consideration of sustainable criteria has gained considerable momentum especially in recent years, FDC started formalising a responsible investor policy as early as 2010. At the beginning of 2011, the Board of Directors decided to set up and implement an exclusion list based on international conventions ratified by the Grand Duchy of Luxembourg and covering the areas of environment as well as institutional, social and joint responsibility. In addition to the restrictions imposed by the legal provisions and international conventions in force, FDC considers thematic or sectoral exclusions require a change in the legal framework applicable to the FDC.

At the same time, FDC has proactively started to pay more attention to sustainable criteria and aspects in its public tenders for mandating external fund managers. In 2012 the first mandate with an investment approach based exclusively on ESG criteria was awarded. Since then, FDC's responsible investor policy has continuously evolved and deepened.

At the end of 2019, the Board of Directors took the initiative to prepare a dedicated report detailing the scope, various aspects and implementation of FDC's responsible investor policy.

The Paris Agreement on climate change, the 2030 Agenda for Sustainable Development of the United Nations or the 2030 Climate and Energy Policy Framework of the European Commission include environmental and social targets as well as objectives that will have an impact on the entire financial sector. Aware of the importance of these issues and in line with its fiduciary duty, the given report also included a detailed climate analysis of FDC’s portfolios.

With the first sustainable investor report published in 2020, FDC aimed to provide a transparent inventory and to publicly confirm its commitment as a responsible investor. Conscious of the constant evolvement of responsible investing, FDC will continuously monitor developments in the field of sustainability and adapt its responsible investor policy as necessary.

The pillars of FDC's responsible investor policy

Implementation of an exclusion list

Since 2011, FDC has ensured that all its investments through its SICAV comply with international conventions. More precisely, the integration of such a principle is actually implemented through a normative exclusion of companies that do not comply with international standards as enshrined in the ten principles of the United Nations Global Compact covering human rights, the environment, international labour standards and the fight against corruption. Equally excluded are companies involved in activities related to controversial weapons.

FDC's exclusion list
COMPANY NORM

63 Moons Technologies Ltd (India)

Business Ethics

Adani Enterprises Ltd (India)

Environment

Adani Ports & Special Economic Zone Ltd (India)

Human Rights & Environment

Aerojet Rocketdyne Holdings Inc (United States)

Controversial Weapons

Airbus SE (Netherlands)

Controversial Weapons

Anhui GreatWall Military Industry Co Ltd (China)

Controversial Weapons & Human Rights

Aryt Industries Ltd (Israel)

Controversial Weapons

Aselsan Elektronik Sanayi ve Ticaret AS (Turkey)

Controversial Weapons

Avio SPA (Italy)

Controversial Weapons

Babcock International Group PLC (United Kingdom)

Controversial Weapons

BAE Systems PLC (United Kingdom)

Controversial Weapons

Bharat Dynamics Ltd (India)

Human Rights & Controversial Weapons

Brookfield Asset Management Inc (Canada)

Controversial Weapons

Brookfield Business Partners LP (Bermuda)

Controversial Weapons

BWX Technologies Inc (United States)

Controversial Weapons

CACI International Inc (United States)

Controversial Weapons

Carmat SA (France)

Controversial Weapons

China Aerospace International Holdings Ltd (Hong Kong)

Controversial Weapons

China Isotope & Radiation Corp (China)

Controversial Weapons

China National Nuclear Power Co Ltd (China)

Controversial Weapons

China Northern Rare Earth (Group) High-Tech Co Ltd (China)

Environment

China Petroleum & Chemical Corp (China)

Human Rights

China Shipbuilding Industry Co Ltd (China)

Controversial Weapons

China Shipbuilding Industry Group Power Co Ltd (China)

Controversial Weapons

China Spacesat Co Ltd (China)

Human Rights & Controversial Weapons

CNIM Group SA (France)

Controversial Weapons

CNNC International Ltd (Hong Kong)

Controversial Weapons

CNPC Capital Co Ltd (China)

Human Rights

Cox & Kings (India) Ltd (India)

Business Ethics

Dassault Aviation SA (France)

Controversial Weapons

Ducommun Inc (United States)

Controversial Weapons

El Sewedy Electric Co (Egypt)

Environment

Energy Transfer LP (United States)

Human Rights

Fluor Corp (United States)

Controversial Weapons

General Dynamics Corp (United States)

Controversial Weapons

GMéxico Transportes SAB de CV (Mexico)

Labour Rights & Environment

Grupo México, S.A.B. de CV (Mexico)

Labour Rights & Environment

Hangzhou Hikvision Digital Technology Co Ltd (China)

Human Rights

Hanwha Aerospace Co Ltd (South Korea)

Controversial Weapons

Hanwha Corp (South Korea)

Controversial Weapons

Hanwha Life Insurance Co Ltd (South Korea)

Controversial Weapons

Hanwha Solutions Corp (South Korea)

Controversial Weapons

Honeywell Automation India Ltd (India)

Controversial Weapons

Honeywell International Inc (United States)

Controversial Weapons

Huneed Technologies (South Korea)

Controversial Weapons

Huntington Ingalls Industries Inc (United States)

Controversial Weapons

Indian Hotels Co Ltd (India)

Controversial Weapons

Indostar Capital Finance Ltd (India)

Controversial Weapons

Inner Mongolia Baotou Steel Union Co Ltd (China)

Environment

InnoWireless Co Ltd (South Korea)

Controversial Weapons

Jacobs Engineering Group Inc (United States)

Controversial Weapons

Kangmei Pharmaceutical Co Ltd (China)

Business Ethics

Korea Electric Power Corporation (South Korea)

Human Rights

L&T Finance Holdings Ltd (India)

Human Rights & Controversial Weapons

L&T Technology Services Ltd (India)

Human Rights & Controversial Weapons

L3Harris Technologies Inc (United States)

Controversial Weapons

Larsen & Toubro Infotech Ltd (India)

Human Rights & Controversial Weapons

Larsen & Toubro Ltd (India)

Human Rights & Controversial Weapons

Leonardo SPA (Italy)

Controversial Weapons

LIG Nex1 Co Ltd (South Korea)

Human Rights & Controversial Weapons

Lockheed Martin Corp (United States)

Human Rights & Controversial Weapons

Luckin Coffee Inc (China)

Business Ethics

ManTech International Corp (United States)

Controversial Weapons

Metallurgical Corporation of China Ltd (China)

Environment

Mindtree Ltd (India)

Human Rights & Controversial Weapons

MMC Norilsk Nickel PJSC (Russia)

Environment

Moog Inc (United States)

Controversial Weapons

MTN Group Ltd (South Africa)

Human Rights

MTN Nigeria Communications Ltd (Nigeria)

Human Rights

Mumias Sugar Company Ltd (Kenya)

Business Ethics

Norinco International Cooperation Ltd (China)

Controversial Weapons

Northrop Grumman Corp (United States)

Controversial Weapons

Oceaneering International Inc (United States)

Controversial Weapons

Oil and Natural Gas Corporation Ltd (India)

Human Rights

Orascom Investment Holding SAE (Egypt)

Human Rights

Pan American Silver Corp (Canada)

Human Rights

PetroChina Co Ltd (China)

Human Rights

PG & E Corp (United States)

Human Rights

Poongsan Corp (South Korea)

Human Rights & Controversial Weapons

Poongsan Holdings Corp (South Korea)

Human Rights & Controversial Weapons

PT Vale Indonesia Tbk (Indonesia)

Human Rights & Environment

Ratch Group Public Co Ltd (Thailand)

Human Rights

Raytheon Technologies Corp (United States)

Human Rights & Controversial Weapons

Rolls-Royce Holdings PLC (United Kingdom)

Controversial Weapons

Safran SA (France)

Controversial Weapons

Saudi Arabian Oil Company (Saudi Arabia)

Human Rights

Saudi Basic Industries Corp (Saudi Arabia)

Human Rights

Scancom Plc (Ghana)

Human Rights

Sinopec Kantons Holdings Ltd (Hong Kong)

Human Rights

SK Holdings Co Ltd (South Korea)

Human Rights

SNT Dynamics Co Ltd (South Korea)

Human Rights

SNT Holdings Co Ltd (South Korea)

Human Rights

S-Oil Corporation (South Korea)

Human Rights

Southern Copper Corporation (United States)

Labour Rights & Environment

Tata Chemicals Ltd (India)

Controversial Weapons

Tata Communications Ltd (India)

Controversial Weapons

Tata Consultancy Services Ltd (India)

Human Rights & Controversial Weapons

Tata Consumer Products Ltd (India)

Controversial Weapons

Tata Elxsi Ltd (India)

Controversial Weapons

Tata Investment Corp Ltd (India)

Human Rights & Controversial Weapons

Tata Motors Ltd (India)

Controversial Weapons

Tata Steel Ltd (India)

Controversial Weapons

Tata Teleservices (Maharashtra) Ltd (India)

Controversial Weapons

Teva Pharmaceutical Industries Ltd (Israel)

Business Ethics

Textron Inc (United States)

Controversial Weapons

Thales SA (France)

Controversial Weapons

The Boeing Company (United States)

Controversial Weapons

The Tata Power Company Ltd (India)

Controversial Weapons

Titan Co Ltd (India)

Controversial Weapons

Tokyo Electric Power Company Holdings Inc (Japan)

Human Rights & Environment

Toshiba Corp (Japan)

Business Ethics

Trent Ltd (India)

Controversial Weapons

Tronic's Microsystems SA (France)

Controversial Weapons

Ultra Electronics Holdings PLC (United Kingdom)

Controversial Weapons

Unitech Ltd (India)

Human Rights & Business Ethics

Vale SA (Brazil)

Human Rights & Environment

Voltas Ltd (India)

Controversial Weapons

Walchandnagar Industries Ltd (India)

Human Rights & Controversial Weapons

Wells Fargo & Company (United States)

Business Ethics

Wirecard AG (Germany)

Business Ethics

Zijin Mining Group Company Ltd (China)

Human Rights & Environment

Consideration of sustainable aspects and criteria

The assets invested through the SICAV are managed by professional fund managers approved and duly appointed by FDC. Since 2011, the questionnaire for the selection of fund managers includes detailed questions on sustainable aspects and criteria taken into account by the tendering companies, particularly in relation to their investment process and asset allocation. This aspect has been strengthened over time so that from 2017 onwards, each tendering company participating in a tender for actively managed mandates is obliged to integrate a sustainable approach into the investment strategy proposed to FDC. As a result, all FDC’s fund managers have engagement policies in place, participate in various initiatives and are members of various organisations that promote, among others, sustainability and/or the transition to a low-carbon economy, are all signatories to the United Nations Principles for Responsible Investment and strive to align with the 17 Sustainable Development Goals of the United Nations. The fund managers’ sustainable approaches are monitored and audited. Eleven ESG labels and one Environment label have been awarded by the labelling agency LuxFLAG. These labels account for almost 87% of the actively managed assets in transferable securities within FDC’s SICAV at the end of September 2021.

The sustainble approaches of FDC's asset managers

Allianz Global Investors implements sustainable approaches for the Euro-denominated green bonds sub-fund and for an Euro-denominated bonds sub-fund. Both approaches are labelled ESG by LuxFLAG.

Click here to visualise Allianz Global Investors' sustainable approaches. (Pdf, 1.01 Mb)

 

Amundi Asset Management implements a sustainable approach for an Euro-denominated bonds sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise Amundi Asset Management's sustainable approach. (Pdf, 245 Kb)

 

AXA Investment Managers implements sustainable approaches for the Euro-denominated liquidities sub-fund and for a global bonds sub-fund. Both approaches are labelled ESG by LuxFLAG.

Click here to visualise AXA Investment Managers' sustainable approaches. (Pdf, 1.12 Mb)

 

CBRE Global Investment Partners implements a sustainable approach for a global real estate sub-fund.

Click here to visualise CBRE Global Investment Partners' sustainable approach. (Pdf, 660 Kb)

 

HSBC Global Asset Management implements a sustainable approach for a Euro-denominated bonds sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise HSBC Global Asset Management's sustainable approach. (Pdf, 1.49 Mb)

 

Impax Asset Management, to which the financial management is delegated by BNP Paribas Asset Management, implements a sustainable approach for the sustainable impact equities sub-fund. The given approach is labelled Environment by LuxFLAG.

Click here to visualise Impax Asset Management's sustainable approach. (Pdf, 733 Kb)

 

KBI Global Investors implements a sustainable approach for a global equities sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise KBI Global Investors' sustainable approach. (Pdf, 222 Kb)

 

LaSalle Investment Management implements a sustainable approach for a global real estate sub-fund.

Click here to visualise LaSalle Investment Management's sustainable approach. (Pdf, 183 Kb)

 

Loomis Sayles, to which the financial management is delegated by Natixis Investment Managers International, implements a sustainable approach for a global bonds sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise Loomis Sayles' sustainable approach. (Pdf, 684 Kb)

 

NN Investment Partners implements a sustainable approach for a global equities sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise NN Investment Partners' sustainable approach. (Pdf, 475 Kb)

 

Robeco Institutional Asset Management implements a sustainable approach for a global equities sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise Robeco Institutional Asset Management's sustainable approach. (Pdf, 4.03 Mb)

 

Wellington Management International implements a sustainable approach for a global bonds sub-fund. The given approach is labelled ESG by LuxFLAG.

Click here to visualise Wellington Management International's sustainable approach. (Pdf, 306 Kb)

FDC's LuxFLAG labels
The LUXEMBOURG FINANCE LABELLING AGENCY (LuxFLAG) is an independent and international non-profit association created in Luxembourg in July 2006 by seven public and private founding partners.

Click here to visualise FDC's LuxFLAG labels. (Pdf, 3.41 Mb)

Dedicated positive impact investments

FDC makes dedicated positive impact investments in various forms. Dedicated sub-funds were created within the SICAV to invest in green bonds as well as in shares of companies that intend to generate environmental or social impact, in addition to financial returns. At the end of 2020, nearly 450 million euros were invested in these sub-funds. In this way, FDC contributes, for example, to the treatment and saving of water, the generation of renewable energy, the reduction of greenhouse gas emissions and the recycling and management of waste.

Through its stakes in the National Low-Cost Housing Administration and specific real estate acquisitions, FDC supports affordable housing.

As the owner of almost 700 hectares of forest labelled PEFC, FDC contributes to the absorption of CO2 emissions, among other things.

FDC's PEFC label
PEFC, the Programme for the Endorsement of Forest Certification, is a leading global alliance of national forest certification systems.

Click here to visualise FDC's PEFC label. (Pdf, 69 Kb)

High energy and environmental performance standards

With regard to FDC’s direct real estate, high standards in terms of energy efficiency and sustainability are targeted and ensured in particular through high level BREEAM labels.

FDC's BREEAM labels
BREEAM is the world’s leading sustainability assessment method for masterplanning projects, infrastructure and buildings.

Click here to visualise FDC's BREEAM labels. (Pdf, 1.27 Mb)

Climate analyses and inherent risk monitoring

On an individual basis, detailed analysis and assessment of climate risks are carried out by FDC's fund managers. The management of these risks forms an integral part of their investment process. At the same time, the use of external service providers or tools allows FDC to have a more consolidated and independent view of climate risks and appropriate means to monitor and assess them. In addition, an alignment to a global warming limited to 2°C can thus be analysed.

FDC's responsible investor report 2020 shows the results of the latest climate analyses done by the FDC.

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