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Monthly Archives: October 2018

Engagement of Etica Sgr, Voting and Dialogue with Companies

Engagement of Etica Sgr, Voting and Dialogue with Companies

Engagement of Etica Sgr, voting and dialogue with companies

What is engagement in the investment world? The term engagement refers to the activities of dialogue between investors and companies and the exercise of voting rights connected to the shareholding.

The objective of the engagement activity is to establish an ongoing dialogue over time and constructive on issues of sustainability and social responsibility .

The engagement activity of 2017

Let’s see specifically how Etica Sgr’s engagement activity was developed in 2017.

Voting activity: active ownership

voto 270x300 In 2017 the active shareholding of Etica Sgr was aimed at 17 companies , of which 11 Italian, 3 Japanese and 3 American. Etica Sgr undertakes to physically attend the Board of shareholders of the Italian companies in which the funds are invested. A certain fact is not negligible, to make the comparison more and more profitable by involving the Board members in the dialogue.

In particular, specific attention was given to the scope of governance in relation to the following topics:

  • management of gender diversity , in relation to the presence of women in the Boards of Directors;
  • remuneration policies ;
  • independence of the members of the Board of Directors ;
  • dividend policies;
  • purchase of treasury shares .

Activities of dialogue with companies

Dialogue-ethics-SGR

The dialogue activity for Etica Sgr aims to influence and push companies towards sustainable good practices and behaviors .

For this reason, this activity is not limited to the companies in which the funds invest or are part of the Investible Universe.

In fact, the activity can go further and involves other realities, especially if it is carried out with international networks of responsible investors with whom Etica Sgr collaborates. With regard to dialogue activities, the strategic areas identified by
Ethics Sgr are:

      • Climate change.
      • Human rights along the supply chain.
      • Tax optimization.

Why does Etica Sgr believe in engagement?

Etica Sgr, which has always been committed to sustainable and responsible investments , considers engagement to be an essential and strategic element of its business. The engagement activity is not limited to the single shareholders’ meeting in which the right to vote is exercised, but develops during the year in a continuous dialogue. The objectives of which to monitor progress over time through a patient journey are precise, the aim is to highlight companies the opportunities, also in terms of business, to assume increasingly responsible conduct , with a view to adapting the company’s business to environmental and social changes taking place.

engagement

Our action is aimed above all at soliciting reflection and action on aspects related to the environment, to the social, to governance and for this reason we undertake paths for improvement with company interlocutors. Above all in a context such as the current one, where governments, companies and citizens are called to do more to achieve sustainable development.

The importance of the engagement activity for Etica Sgr is confirmed by the fact that, in 2018, the figure of Corporate engagement and network manager was set up, which deals with managing the engagement activity on sustainability issues realized by Etica Sgr independently or within the national and international networks to which it belongs.

Ethics Sgr, engagement and SDGs: unity is strength

The shareholders season 2017 Etica SGR has chosen to associate, for the first time, the issues addressed in the activity of engagement with companies to Sustainable Development Goals (Sustainable Development Goals – SDGs) of the United Nations, with the aim of stimulating the dialogue with companies in a broader, global and shared perspective: that of sustainable development .

These Goals commit the governments of the 193 member countries of the United Nations to promote sustainable development of the planet, touching on issues such as health, education, gender equality, the fight against hunger and poverty and environmental protection.

SDGs

What are the main areas tackled by Etica Sgr?

Find out more by clicking the following items.

Corporate governance

The subject of corporate governance is linked to elements such as the independence of the Board of Directors, the separation between the Chairman of the Board of Directors and the Managing Director / General Manager, the gender diversity in the Board of Directors and the remuneration systems.

This issue plays an important role in the analysis of Etica Sgr, because a well-run company has a better chance of giving good economic results in the long term.

OBJECTIVE 5: Gender equality

 Reaching gender equality and empowering all women and girls. The main obstacle to change is the persistence of a gender gap, often highlighted by the fact that women are still under represented in managerial positions and / or remunerated less at the same position.

OBJECTIVE 8: Digitious work and economic growth

 Encouraging lasting, inclusive and sustainable economic growth
full and productive employment and decent work for all. As part of the eighth Sustainable Development Goal, Etica Sgr dealt with governance issues relating to corporate remuneration policies.

OBJECTIVE 12: Consumption and responsible production

 Guarantee sustainable production and consumption models. One of the Goals of the Sustainable Development Goal “Consumption and Production Responsible” encourages companies, especially large multinational companies, to integrate sustainability information into their annual reports.

The commitment to face climate change

Etica Sgr has always been active in terms of climate change, a commitment that is realized by excluding investments from sectors that have a particularly impact in terms of climate-changing gas emissions, such as the oil or mining sector, and choosing the most virtuous companies from the point of environmental sight . With the engagement activity Etica Sgr strengthens and amplifies the commitments undertaken as a sustainable and responsible investor, encouraging companies in which it invests in developing strategies that are increasingly efficient and consistent with the Sustainable Development Goals linked to climate change.

OBJECTIVE 6: Clean water and hygiene

 Ensure the availability and sustainable management of water and sanitation facilities to all. The United Nations push towards greater
responsibility in the use of water resources. We must achieve adequate and fair access to sanitation for all, reduce pollution and protect and restore water-related ecosystems.

OBJECTIVE 13: Acting for the climate

 Promote actions, at all levels, to combat climate change . Climate change is a global challenge that has no boundaries. Greenhouse gas emissions from human activities are currently at their highest level in history. In this context, Etica Sgr is committed to guiding companies towards a low carbon economy, urging the reporting of emissions and the reduction of consumption, favoring the development of renewable energy.

OBJECTIVE 15: Life on earth

 Protecting, restoring and promoting sustainable use of the Earth’s ecosystem, sustainably managing forests, combating desertification, stopping and reversing land degradation and halting the loss of biological diversity . The United Nations considers it important to mobilize and substantially increase the financial resources to conserve biodiversity and ecosystems. Etica Sgr therefore urges companies to adopt responsible procurement policies for timber, reducing deforestation caused by palm oil suppliers and policies to respect animals.

Human rights along the supply chain

The issue of human rights is of crucial importance, especially in those countries characterized by low-stringency legislation, where many companies operate through their suppliers. Etica Sgr has always been careful to respect human rights in the selection and monitoring processes of the supply chains of companies in which its funds invest. The engagement action is aimed at soliciting the Boards of the companies on the values ​​of social and environmental responsibility also towards their suppliers. It is important to encourage the reporting of internal processes, such as supply chain audits, to avoid incidents of discrimination or exploitation such as child or forced labor.

OBJECTIVE 8: Decent work and economic growth

 Encouraging economic and lasting, inclusive and sustainable growth, full and productive employment and decent work for all . For Etica Sgr a sustainable supply chain is necessary and at the same time highly rewarding. At the forefront of campaigns against the violation of human rights, Etica Sgr draws the attention of companies on the policies for supply chain management and workforce procurement practices, so that respect for the environment and human rights is protected throughout the supply chain.

OBJECTIVE 16: Peace, justice and strong institutions

 Promoting peaceful and more inclusive societies for sustainable development ; offer access to justice for all and create efficient, responsible and inclusive bodies at all levels . The United Nations requires the planet to reduce illicit financial and arms flows by 2030 and combat all forms of organized crime. It is important for national institutions to strengthen themselves, including through international cooperation, to prevent violence and combat terrorism and crime.

Tax optimization

Investors are increasingly turning their attention and interest into the business conduct of the companies in which they invest. Consequently, for a company it is strategic to reconcile economic growth with a correct distribution of resources, adopt transparent tax management and in line with current legislation, appropriately remunerate all stakeholders, report in an integrated manner its business activity. .

OBJECTIVE 10: Reduce inequalities

Reduce inequality within and between nations . Reducing national and international inequalities is perhaps one of the most challenging objectives. In fact, few resources are available for the poorest countries to improve their situation. The Sustainable Development Goal 10 draws attention to this aspect monitored through specific indicators, including social, economic and political inclusion of citizens. Reducing inequality is also and above all a necessity because, beyond a certain threshold, inequality also damages economic growth.

 

SRI Week, The Master Event on Responsible Finance Returns

SRI Week, The Master Event on Responsible Finance Returns

SRI week, the master event on responsible finance returns

SRI week, soon we start again! The most important initiative in Italy on the theme of sustainable finance has reached its sixth edition. We are talking about the SRI Week (from English Sustainable and Responsible Investment which stands for sustainable and responsible investment). The event is promoted and coordinated by the Forum for Sustainable Finance (FFS) , the multi-stakeholder organization that promotes the integration of environmental, social and governance criteria into investment policies and processes. The organization also collaborates with the Members or other subjects who share the Forum’s mission. Sustainable Finance Forum

The event will take place from 8 to 17 November . It will be a succession of meetings and conferences, all with free admission, which will take place between Milan and Rome . High-profile national and international speakers will present important studies and research focused on sustainable finance.

The themes of the SRI Week

The opening day will take place in Rome at the Chamber of Deputies with the presentation of research on responsible retail investors in Italy. The focus will be on socio-environmental aspects in investment choices.

The main themes of the SRI week events will be the impact investing , the role of sustainable finance in local development , the risks and returns of sustainable investments and the evolution of diversity & inclusion in the Italian scenario.

Within the SRI Week is the SRI Show , the first Italian trade fair dedicated to sustainable finance products open to investors and consultants. The event will take place on November 14th in Milan within the elegant setting of the Stelline Congress Center.

The edition will close again in Rome at the COVIP headquarters with an event dedicated to the social security sector. On this occasion a survey will be presented on the sustainable investment policies of the main Italian social security plans .

Ethics Sgr at the SRI Week

Also this year Etica Sgr will be present at the Salone SRI on November 14th with its own stand and will preside over the event which will be held on November 15th at BASE Milano. On this occasion the Impact Investing manual will be presented, created by the Forum for Sustainable Finance in collaboration with the Social Impact Agenda for Italy. The publication is the result of a working group of which Etica Sgr is part, alongside financial operators and third sector organizations.

As a responsible investor, we strongly believe that finance should contribute to generating a positive social and environmental impact. Microfinance and crowdfunding (literally bottom-up funding) are important examples of financing the real economy to generate positive impact in society.

Indeed, the impact investing strategy is experiencing significant growth in Italy and Europe. This was also confirmed by the data from the last Eurosif study ” European SRI Study 2016 “.

Finance, but not only

In recent years we have seen important progress in sustainable finance in Europe and in Italy: in fact, the masses managed according to the ESG criteria are growing and the importance given by the various financial subjects to the issues of sustainability is growing. Moreover, this evolution is reflected in the associative base of the Forum, ever more numerous, motivated and proactive.

Bicciato, Secretary General of the Forum underlined .

There will also be a specific focus on Europe with the presentation of the High-Level Expert Group on Sustainable Finance . This is a study carried out by the European Commission with the aim of developing a common strategy on the development of sustainable finance. The conference is the Italian stage of the Roadshow that Eurosif – the association that promotes sustainable finance in Europe, which the Forum is part of – is organizing in the main European financial centers.

Sustainability is not only finance, but also culture, then theater, music, interactivity and workshops for children. After the SRI week, on Sunday 19 November at Palazzo Mezzanotte, interesting cultural events will take place to bring the general public closer to the young and to sustainability. Go to the complete program .

Sustainable Development, An Economic Model with 24 Million Jobs

Sustainable Development, An Economic Model with 24 Million Jobs

Sustainable development, 24 million new jobs by 2030

Sustainable development is also worthwhile in purely economic terms: 24 million new jobs by 2030 . This is the estimate of the last report published by the International Labor Organization (ILO), entitled ” Greening with jobs. World employment social outlook 2018 “, in which the impact in terms of employment of the ecological transition is calculated to implement the Paris Climate Agreement.

In the budget of this transition, it is estimated that as many as 6 million jobs could disappear , all concentrated in sectors related to fossil fuels and mining .

The balance would therefore be active for 18 million jobs . To these could be added another 6 million by investing in a circular economy .

Sustainable development and … employment

Employers who lose fossil fuels , concentrated in some geographic areas, could be the main ones to lose jobs.

Sustainable development in Europe would lead to a positive job balance (around 12 million more jobs), the same in the Americas (3 million) and the Asia-Pacific area (14 million). In the Middle East and in Africa the values ​​would be negative for 300 thousand and 350 thousand. This is due to the massive presence of structures and companies engaged in the fossil fuels and mining sectors.

Employment by region in 2030 (percentage difference)

Occupazione per regione nel 2030 e1527695320297

Benefits for much of the world economy

At a global level “most sectors of the economy will benefit from net job creation “, the UN explains: out of the 163 economic sectors analyzed by the report, only 14 could be subject to job losses of over 10,000 jobs. work.

Only oil extraction and refineries will see their workers decrease by more than a million units. On the contrary, in the energy production sector, the losses of 400 thousand places (mainly in the exploitation of fossil fuels) would be largely offset by the reaction of 2.5 million new seats guaranteed by renewables.

Employment by sector (percentage difference) 

Occupazione per settore nel 2030

The circular economy , recycling activities, separate collection, repair and reuse services could also provide new impetus . Although judged to be more difficult to quantify, the growth of organic farming would also guarantee an important number of new jobs.

Prepare for the green transition

The path towards sustainable development will certainly not be “automatic” or painless. So much so that the UN “invites countries to take urgent action to train workers in the skills necessary for the transition to a greener economy and to ensure social protection that facilitates the transition to new jobs”. “Above all, low or middle income countries – the report reads – still need to adopt and finance strategies that guarantee a transition towards a sustainable and inclusive economy, both from an environmental and a social point of view”.

Sviluppo sostenibile

Ethics Sgr and sustainable development

Etica Sgr has always promoted the transition to a sustainable economy and it does so by engaging on various fronts. Such as?

  • It offers a simple and transparent range of funds , compliant with the European Code for the Transparency of Sustainable and Responsible Investments of Eurosif and certified for the system for the Quality Management System of the analysis and research process.
  • It carries out engagement activities, through which Etica Sgr dialogues with companies to encourage top management to undertake increasingly responsible conduct.
  • Form and infoma with EticAcademy , the online training academy of Etica Sgr, a reference point for the banks and placement agents of the funds of Etica Sgr.

For us, financial education is one of the fundamental elements for the transition towards a model of sustainable development.

 

Pollutant Emissions, Investors Ask for More Transparency From the Fossil Sector

Pollutant Emissions, Investors Ask for More Transparency From the Fossil Sector

Polluting emissions, investors demand more transparency from the fossil sector

“To achieve the goals set by the Paris Climate Agreement, companies in the fossil fuel sector must be more transparent and take responsibility for their polluting emissions “. Thus the open letter sent to the Financial Times by 60 financial companies begins.

These are companies that together manage more than 10.4 trillion dollars , long-term investors of the oil & gas sector.

More costs for the sectors that emit polluting emissions

“We are strongly aware of the importance of a transition to a low polluting future ” – the letter reads – “for the sustainability of the global economy and the prosperity of our customers”.

It is also also a question of costs: the new regulations in many countries of the world are aimed at keeping the global temperature rise below 2 degrees and meeting the objectives set by the Paris Agreement . This means that in future there will always be greater costs for the sectors that emit polluting emissions and will therefore be subject to an increase in investment risks .

Reduce polluting emissions, a necessity

The CDP (formerly the Carbon Disclosure Project) estimates that the oil & gas sector is responsible for 50% of global pollutant emissions . And, they write in the open letter, “for 90% these emissions derive from the use of the products of companies in this sector”. Consequently, “reducing the polluting impact of our products would be, for these companies, the most effective strategy for moving to a world with low polluting emissions”.

The 60 big investors also ask governments to pursue a regulation that supports investments in low impact technologies .

“We will continue our vigilance and dialogue with companies in the fossil fuel sector, to better understand how the investments we choose on behalf of our customers are in line with a sustainable future . We investors are taking over our responsibility to support the Paris Agreement “- the open letter closes -” it is time for companies to do the same “.

The EU Parliament also calls for a fossil free future

A request for disinvestment from the fossil fuel sector also came from the European Parliament , which approved a resolution on sustainable finance .

The provision highlights fifty points, emphasizing the importance of a stable and ambitious regulatory and supervisory framework for mobilizing private capital towards sustainability .
And, among the various points, he also asks to put in action actions to “decarbonise” the most prestola finance . “Since by the middle of the century we have eliminated fossil fuels from our economy” – said Molly Scott Cato, the British MEP rapporteur of the resolution – “we must also eliminate the activities that depend on them from our financial system”.

Reducing the impact on the environment: we believe in it to the end

At Etica Sgr we care about the transition to a low carbon future . For this reason we join – already in 2015 – at the Montréal Carbon Pledge , an initiative promoted by the PRI aimed at institutional investors all over the world, which includes the commitment to measure, reduce and report the carbon footprint . of their equity investments.

From the last study carried out on the Ethical Equity Fund, it emerged that the companies in the portfolio are active in reducing their polluting emissions. In fact, 81% of companies have undertaken initiatives to reduce environmental impact through, for example, the development of low carbon products and production processes that are more energy efficient.