Our 2021 stewardship report
At Carmignac, we believe a company that does not function in harmony with its environment and stakeholders is doomed for failure. We have always been mavericks, we have always tried to make a difference, sometimes by taking side roads and always with our clients in mind. Being a family business enables us to take a long-term view while embracing Environmental, Social and Governance (ESG) credentials.
In more than 30 years of existence, we have managed to maintain and evolve a longheld practice of investing responsibly by avoiding tobacco or companies involved in the manufacture of controversial weapons. Also, we have focused on companies with a minimum appropriate level of corporate governance standards and transparency, and even more so given our long-standing exposure in emerging markets. It was deemed necessary, as we committed ourselves to make available to our clients and retail investors, asset classes and products mostly reserved to institutional investors. Over time, our active approach has remained steadfast, driven by our ultimate purpose: to efficiently manage investors’ savings.
Our responsible investment approach gives us an in-depth picture of a company’s true potential, helping us to make better investment decisions. ESG considerations are integrated within our investment team’s approach across all asset classes. I encourage you to read this inaugural Stewardship Report for you to see what we have achieved in 2021. Taking into account our investors’ interests we have continued to evolve our practices to render our accountability and understanding of ESG risks and opportunities more efficiently and take our active management and ownership a step further.
Our investors’ expectations have also evolved as they are increasingly mindful of the impact of their investment decisions on the planet they live in and on the society they are part of. Carmignac’s commitment to responsible investing is, in parallel, increasingly reflected in our fund offering as we aim to empower our end clients.
In 2021, we have engaged teams all across the firm and reached close to 90% of our assets classified Article 8 and 9 under the European Sustainable Finance Disclosures Regulation (SFDR).
As we explain in this report, this was supported by the launch of our rigorous “Outcomes Framework” for Article 9 funds based on the United Nation’s Sustainable Development Goals (SDGs) which requires companies to derive at least 50% of their revenues from activities which have a positive contribution to at least one of nine SDGs we deem as investable. These positive developments come with the recognition that the investment industry is only at the beginning of the journey towards greater integration of ESG considerations within investments. We will continue to evolve and improve our processes, actively, and with a fair balance of humility, creativity and hard work.
Managing ESG risks and opportunities across all asset classes has become overtime a key feature of our primary mandate, which is to manage our investors’ money efficiently over the long-term. Our actions do not stop at the investment decision level. We are also an active owner of the companies we invest in, on behalf of portfolios managed.
As we describe in this report, we use our voice through company engagement and exercise our voting rights to encourage them to adopt best practices and to transition to a more sustainable profitability, in line with Carmignac’s three ESG themes of focus: Climate change, Empowerment and Leadership.
In 2021, we undertook 84 company engagements and opposed the management of our investee companies at least once at 41% of the shareholder meetings we voted.
Ultimately, we believe that our fiduciary objective covers both financial returns and creating positive value for society and the environment. I hope you will find reading this report worthwhile.