As a responsible investor, we consider part of our fiduciary duty to actively manage ESG risks and opportunities when investing on behalf of our clients. We integrate ESG analysis into our equities and fixed income investment process via our proprietary ESG research system START (System for Tracking and Analysis of a Responsible Trajectory), which incorporates human insight and differentiated ESG data sources.
We believe our investments should be made in companies with sustainable business models and which are exhibiting long-term growth perspectives. As such, we have compiled an exclusion list with companies that do not meet Carmignac’s investment standards, due to their activity in areas such as controversial weapons, tobacco, adult entertainment and thermal coal producers (1), or because they contravene global standards on environmental protection, human rights, labour standards, and anti-corruption. (2) Furthermore, Carmignac has committed to a total exit of coal mining and coal-fired power generating companies by 2030 across OECD countries and the rest of world.
As part of our commitment to improve corporate governance practices, we actively engage with the companies we invest in. We assess their ESG behaviour, exercise our shareholder voting rights, help instil best practices, clarify our views and hold senior management accountable when issues arise.
As part of our commitment to ensure complete clarity of our investments to our clients, we welcome the European Sustainable and Responsible Investing Transparency Code, which aims to disclose the practices of our SRI (1) Funds and Thematic ESG Funds. These are the second statements of commitment for the European and Emerging Market Funds, and the first statement for our Global Equity Funds.
We have made climate awareness a formal component of our investment process, joining the efforts undertaken as part of the Paris Agreement and applying article 173 on carbon reporting and ESG implementation across our Funds. (1) As of 31/12/2019, €12.6 billion or 38% of our assets under management were measured and monitored in terms of carbon emissions. (2) The carbon footprint of these investments was 63% lower than their reference indicators per million EUR invested.
As part of being a responsible investor, we believe it is important to understand the sustainability outcomes that we have caused, have contributed to, and are directly linked to. This Policy underpins our work looking at environmental and social good and harm.
We welcome the Sustainable Finance Disclosure Regulation (SFDR) as it offers a fair and standardised approach applicable to sustainable investments. The SFDR is a new set of European standards on sustainability‐related disclosures in the financial services sector. In the scope of asset management, it aims to help investors better understand and compare the sustainability profile of asset managers and funds by classifying them according to specific Articles, which determine the level of sustainability related information that must be disclosed.