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 |
Danske Bank A/S (Denmark) |
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 |
Indivior PLC (United Kingdom) |
Business Ethics |
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 |
JBS SA (Brazil) |
Environment & Business Ethics |
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 |
S&T Dynamics Co Ltd (South Korea) |
Controversial Weapons |
S&T Holdings Co Ltd (South Korea) |
Controversial Weapons |
Safran SA (France) |
Controversial Weapons |
Saudi Arabian Oil Company (Saudi Arabia) |
Human Rights |
Saudi Basic Industries Corp (Saudi Arabia) |
Human Rights |
Serco Group PLC (United Kingdom) |
Controversial Weapons |
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 |
Southern Copper Corporation (United States) |
Labour Rights & Environment |
Swedbank AB (Sweden) |
Business Ethics |
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. Ten ESG labels and one Environment label have been awarded by the labelling agency LuxFLAG. These labels account for almost 80% of the actively managed assets in transferable securities within FDC’s SICAV at the end of 2020.
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)
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, 9.07 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.
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.
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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