France’s €8.5bn Ircantec shifts €1bn in equities into Allianz Global Investors low carbon approach

Major move by leading European public pension scheme.

Ircantec, the €8.5bn French public pension scheme – a notable responsible investor – has become the latest of France’s large quasi state pension schemes to take a big step to reducing the C02 exposure of a slug of its investments and investing in green energy by reconfiguring approximately €1bn in assets run for it by Allianz Global Investors towards a low carbon/environmental opportunities equities strategy.

Ircantec joins its French peer pension funds ERAFP and FRR, who have both begun investing several billion in assets in low carbon investment products.

The Ircantec money, which it says is a pilot project, is being run through a ‘best effort, best solution’ approach by Allianz GI, an active equity strategy that rebalances the portfolio towards companies with lower carbon emissions and those that are active in the clean energy transition or in low carbon solutions.

The pension fund’s investment management is overseen by the French sovereign wealth organisation, la Caisse des Dépôts.

Ircantec – or to give it its full name in French: L’institution de Retraite Complémentaire des Agents Non Titulaires de l‘État et des Collectivités publiques – is a pay-as-you-go second pillar pension structure created in 1970.

It covers state employees, and regional authority workers, including local politicians, and staff atcompanies such as EdF and GdF, the big French utilities, and the Banque de France. Its €8.5bn treasury is its contributions buffer for future pension payments.

The fund has taken a number of steps in the last couple of years to increase its environmental commitment. It signed the Institutional Global Investor Statement on Climate Change, which pledges to supporting the UN Climate Summit in Paris this year and encourage strong domestic and international climate and clean energy policies.

It has also signed the Montreal Carbon Pledge, which is overseen by the Principles for Responsible Investment (PRI), and aims to attract $1trn of portfolio commitment in time for the crunch UN Climate Change Conference in Paris later this year.

Ircantec is a PRI signatory. In 2013, it published a comprehensive charter setting out how it applies responsible investment to its equity holdings based on the PRI and UN Global Compact, as well as outlining its corporate governance and share voting strategy.

Don’t miss Responsible Investor’s specialist RFP’s conference: ESG 2.0 2015 – Investment mandates and long-term value creation in the investment chain: The evolving relationship between asset owners and their asset managers. November 19, London: Link