France’s ERAFP names managers for €400m SRI Pacific Equities mandates, signs carbon reduction pledge

French civil service fund ERAFP, the 100% socially responsible investor with more than €23bn in assets, has awarded €400m in SRI Pacific Equities mandates between two managers, Comgest and Robeco Institutional Asset Management, with Allianz Global Investors hired for a stand-by brief. The aim of the mandates is to outperform the MSCI Pacific index over the long term and the investments will be made in Australia, Hong Kong, Japan, New Zealand and Singapore. The fund said the appointed managers were hired based on their fundamental analysis of companies – in line with ERAFP’s 100% RI principles – and on their ability to enter in to regular engagement discussions with their investee companies.
The initial term of the mandates is five years, with the option of three one-year extensions. ERAFP carries out its own internal manager selection.
The scheme was formed in 2005 and makes its investments in accordance with a five-point SRI Charter dating from 2006. It is one of the largest public pension funds in the world with nearly 4.5m beneficiaries and close to €1.77bn in annual contributions.
Separately, ERAFP has joined the Portfolio Decarbonisation Coalition (PDC), the group led by The United Nations Environment Programme and leading institutional investors to ‘decarbonize’ an initial $100bnof investment, of which pledges of $45bn have already been made.
The PDC was unveiled at the UN Climate Summit in New York and backed by Swedish state pension fund Fjärde AP-fonden (AP4), French asset manager Amundi and environmental data body CDP. The PDC is also supported by the China International Capital Corporation, the joint venture investment banking and research firm that’s backed in part by Singapore state investor GIC.
ERAFP has also published the carbon footprint measurement of its portfolio of shares in major publicly traded companies following an announcement last week that it and three other major French funds, the Caisse des Dépôts, FRR and Ircantec would all do so.
As of 31 December 2014, the carbon footprint of its stock portfolio emitted on average 16% fewer TEQs (Tradeable Energy Quotas) of CO2/€ millions of revenue than its reference MSCI World index. The fund uses Trucost to calculate the available carbon data of companies on their direct (scope 1) and indirect (scope 2 and direct suppliers) GHG emissions. ERAFP has also been working with Amundi to reduce the carbon footprint of one of its European equity funds by 40% without excluding any sector.