SRI: an essential lever for more virtuous finance

Tocqueville Finance and LBP AM are convinced that socially responsible investment (SRI) practices are an essential lever to enable financial markets to play a more virtuous role in the economy. As part of the La Banque Postale Group, we have a civic responsibility that commits us.

Tocqueville Finance has therefore chosen to develop SRI, guided by the major international texts, by the Group’s commitments, by its historical values of being close to companies for 30 years and of responsibility, and, finally, by its essential role in supporting the financing of the real economy (strong investment in small and medium-sized companies).

Tocqueville Finance offers its clients the opportunity to make sense of their investment and seize opportunities for sustainable growth, thanks to a range of funds managed by combining the demand for performance with high-quality financial and extra-financial analysis.

In response to the major challenges facing our society – demographic development, urbanisation, the environment, climate, agriculture, food and public health – Tocqueville Finance has developed an innovative and integrated approach to SRI analysis and management.

In addition to taking into account Environmental, Social and Governance (ESG) criteria, the asset management company benefits from the contribution of LBP AM’s “GREAT” investment philosophy, which is based on four pillars that provide solutions and enable risk management:

– Responsible Governance

– Sustainable management of Resources

Energy and Economic transition

Territorial development

Helping companies to change their practices in favour of a sustainable world is our ambition and the core of our philosophy. Tocqueville Finance’s reputation, proximity and knowledge of French and European companies of all sizes, for over 30 years, are real assets in this approach.

Participation in market initiatives in France and abroad:

Our parent company LBP AM is a player in the advancement of academic research, social commitment and commitment to the climate. Its active participation in working groups and think tanks, covering a wide range of thematics, is a perfect illustration of this.

Tocqueville Finance and its teams, in continuous contact with LBP AM’s SRI teams, benefit from these efforts.

Exclusion Committee

Tocqueville Finance maintains a list of exclusions applicable to all funds under management, as well as subsidiary lists applicable in relation to the specific requests of each client (sector exclusions for example).

Tocqueville Finance’s Exclusion Committee is the body that decides on the exclusion of companies exposed to major controversies. It is held on an ad hoc basis and in conjunction with the Tocqueville Finance Investment Committee. We exclude companies that severely and repeatedly violate the Global Compact Principles. We establish a list of companies that are subject to the most serious controversies, such as corruption or pollution, and for which no appropriate response has been made.

This has an impact on our investment decisions.

Exclusion of controversial weapons

Tocqueville Finance’s commitment is also based on its convictions, which lead it to exclude from its portfolios companies involved in the production and/or marketing of controversial and non-conventional weapons, such as anti-personnel mines and cluster bombs, as required by regulations, but also biological, chemical, nuclear, depleted uranium, blinding and incendiary weapons.

Commitment and voting policy

Convinced that SRI is essential to enable financial markets to play a virtuous role in the economy, we consider that Tocqueville Finance’s approach to SRI must be complemented by a commitment to companies.

We exercise our voting rights in funds for which we are the asset management company and for which we have identified an interest in implementing a shareholder policy. For example, Tocqueville Finance implements measures specific to small caps: raising the thresholds for the share of capital that can be issued with and without preferential subscription rights (DPS), combining the functions of chairman and chief executive officer in small companies, extending the length of terms of office and lowering the level of independence of the board of directors.

Commitment to the climate

Being committed to the climate also means raising our clients’ awareness on the most sustainable and environmentally friendly investments. To this end, Tocqueville Finance’s team of analysts and portfolio managers share with them – during performance monitoring meetings – their knowledge and conviction to invest in companies that are virtuous today (or that are working to find solutions for tomorrow). Tocqueville Finance also provides its investors with dedicated reports on the energy transition in order to analyse the balance sheet of their assets: carbon intensity, coal exposure, solution companies (companies that provide solutions to facilitate the energy transition).