l’ isr way - sycomore am · or the re-election of appointment committee mem - bers when the 40%...

L’ISR WAYb y S Y C O M O R E A S S E T M A N A G E M E N T

GOVERNANCE

RE

SO

LU

TE

LY

RE

SP

ON

SIB

LE

#5

EDITORIALDelivering sustainable performance with partnership governance

OPINIONGovernance is key to credit analysis

DISCOVERING SRIImproving governance practices through an active approach

THE SRI TWEETS

INTERVIEWVirginie Seghers - ProphilShareholder Foundations:Providing stability and sustainable performance

THE FREEDOM TO ENGAGESRI by Sycomore

SYCOMORE ASSET MANAGEMENT

OUR EDGE

PAGE 3

PAGE 4

PAGE 5

PAGE 10

PAGE 12

PAGE 18

PAGE 22

PAGE 23

3THE RESPONSIBLE WAY - GOVERNANCE

DELIVERING SUSTAINABLEPERFORMANCE WITHPARTNERSHIP GOVERNANCEThe traditional definition of “corporate go-vernance” covers all rules and principlesthat determine how a company is managedand controlled, as well as the breakdown ofpower between the different governing bodies.By appointing representatives that constituteboards of directors, shareholders exert someform on control on management.

The central role given to shareholders ispartly do to the fact that they bear a certainamount of risk, with no certainty over fu-ture returns. But the question is whethershareholders are truly the only stakehol-ders to be carrying this risk. An employeeis hardly in a position to diversify risks byworking for several employers, and a sup-plier’s negotiating power with whoevercommissions the work often limits his orher room for manoeuvre. Finally the nega-tive impact of corporate activity on the en-vironment (all forms of pollution, dwindlingresources, climate change…) also demons-trates a lack of representation within thesecompanies’ decision-making bodies.

Therefore, it seems that the inclusion ofthe different stakeholders in the directors’mandates has the merit of recognising theimportance of each and every one and

providing a fairer compensation for risk, without de-nying shareholders their central role in corporategovernance.

We wish to see the emergence of new governancemodels that effectively embed the interests of differentpartners in shareholders meetings or supervisorycommittees. We believe that companies should raisethe importance given to these considerations and en-sure that the value created is distributed fairly; this ap-proach would clearly constitute a powerful driver forsustainable performance.

In this edition of our Newsletter, we shall describe ourapproach as bond investors and address the way weexercise our voting rights as shareholders. Our focuson Prophil will open us up to new forms of governanceaimed at aligning the common good with economicprofitability. Essentially, these articles will relate dis-cussions and exchanges that not only help us defineour vision, but also enable us, at our own level, to drivechange and continue to innovate in the field of corpo-rate governance.

Bertille KNUCKEY Head of Sustainable

& Responsible Investment

ED

IT

OR

IA

L

GOVERNANCE IS KEYTO CREDIT ANALYSISby Stanislas de Bailliencourt Fund manager

*Shareholders, creditors, employees, clients, suppliers.

When we launched our SRI Credit fund fouryears ago, our objective was to approach theanalysis of issuers from a fixed income pers-pective. We were careful to take into accountthe risks induced by the company’s financialstrategy, based on the principle that goodnews for shareholders is not always positivefor bond holders over the long term.

We observed that the priority given by a com-pany to its key stakeholders* can vary overtime. Among existing extra-financial criteria,we chose to give a stronger weight to thequality of financial communication and ac-counting risks. We also set a new criterion:the bond-holder risk, which assesses thecompany’s strategy from the perspective ofits bond holders and measures the vulnerabi-lity of their position in the event of unfavourabledecisions being taken. These decisions canrange from the out-of-control use of debt, orthe pledge of assets as collateral for other cre-ditors, to an overly-generous dividend policy.

Let’s look at the example of Lafarge, whichhas experienced a period of strong externalgrowth, followed by a rather tense episodeafter the 2008 crisis. Once the company wasback on track, in June 2012, the managementstated it wished to regain its Investment

Grade status. From that moment on, all decisions thatwere taken were biased in favour of the company’sbond investors.

Conversely, in the telecom sector, Altice carried out aseries of acquisitions in Europe - including SFR, andlater in the United States. Most and foremost, thegroup’s objective was to maximise shareholder valueby leveraging on the restructuring of the telecom in-dustry’s landscape, on easy access to low interest ratecapital, and on its ability to make considerable costsavings.

The implementation of this strategy clearly demons-trated that the company gave no precedence to the in-terests of its employees or suppliers, or even to itsclients, who were negatively affected by the lack ofinvestment in the networks. For the company’s creditors,these acquisitions gradually increased the gearingratio, and therefore the company’s risk profile. Weconsequently excluded the company from our bond in-vestment universe, as management had clearly favou-red shareholders over other stakeholders.

“... GOOD NEWS FORSHAREHOLDERS IS NOT ALWAYSPOSITIVE FOR BOND HOLDERSOVER THE LONG TERM.”

OP

IN

IO

N

IMPROVINGGOVERNANCEPRACTICESTHROUGH ANACTIVE APPROACH

Sycomore is an active voter at the shareholders’meetings of all companies held in the portfolios.The case-by-case analysis of the resolutionssubmitted to the shareholders is a sizeable in-vestment for us - which we nevertheless considerto be essential for the responsible exercise ofour voting rights. While our vote as a minorityshareholder tends to have a limited influence onthe final outcome, we consider this vote to be avaluable means of expression, and one which weintend to use with a view to improving governancepractices.

The shareholders’ meetings season is a distinctiveperiod of dialogue between shareholders and com-panies, and is particularly conducive to engagement.Our active voting policy enabled us to initiate a dia-logue with 28 companies on issues of governance.50% of these companies say they intend to take ourcomments into account when preparing their nextshareholders’ meeting.


by Sara Carvalho de Oliveiraand Bertille Sainte-Beuve

DIS

CO

VE

RIN

GS

RI

During the most recent season, the shareholders ofFrench companies expressed their views on executivecompensation for the third time since the introduction ofsay-on-pay in the Afep-Medef Code of June 2013.

With a 54% rejection of the remuneration attributed toCarlos Ghosn, Renault’s shareholders rekindled the de-bates over the consultative nature of this vote, which en-abled the board of directors to ignore the opinion of thecompany’s shareholders.

French members of Parliament added an article to thedraft bill on “Transparency, the Fight against Corruptionand Modernisation”, also known as “Sapin 2”, in orderto give a legally binding status to shareholder votes.

With European countries applying different rules on the ap-proval of compensation by shareholders, it is clear that thelevels of maturity are particularly inconsistent on this issue.At present, only the United Kingdom, the Netherlands andSwitzerland have adopted binding voting systems.

However, true to our universal vision of good governancepractices, and free of national and sector comparisons, we

have applied the same requirements to all portfolio com-panies. Our vote carries no judgment on the amounts at-tributed. Nevertheless, we thoroughly examine thetransparency and the alignment with shareholders’ inte-rests.

Some companies’ best practices stand out in terms oftransparency on executive compensation. We appre-ciate the efforts made by Ingenico to justify qualitativeobjectives based on detailed facts. Whenever they ac-count for a large proportion of short-term compensa-tion, we believe that qualitative objectives need to beexplained in tangible terms, in the same manner asquantitative targets. Concerning the integration of CSRcompensation criteria, we particularly appreciated thequantitative assessment of CSR performance deployedby Legrand, including the publication of many indica-tors that improve the measurement of progress.

The overall improvement in the transparency of com-pensation reports enables us to appreciate the rigourof performance criteria. We have been particularly at-tentive to potential discrepancies between the objec-tives assigned to the managers and those disclosed tothe market. Furthermore, we are opposed to all formsof discretionary adjustments to the bonus by the boardof directors, even if these involve taking into considera-tion unplanned events during the course of the year. Webelieve that long-term compensation policies shouldprevent any post facto alterations to objectives.

LONG-TERM COMPENSATIONPOLICIES SHOULD PREVENT

ANY POST FACTO ALTERATIONSTO OBJECTIVES

Source: Les Echos.fr - Illustration ®Pinel

Gender parity on boards of directors has also been at thecentre of attention this season for listed companies inFrance, many of which took advantage of their shareholder’smeetings to submit the appointment of female directorsto their shareholders’ votes.

The legal requirement for female directors to make up40% of a company’s board will come into force on Ja-nuary 1st 2017. According to the wording of the Law, thecompliance of the Boards of Directors and SupervisoryCommittees is assessed following the first Ordinary GeneralMeeting to take place after this date.

The sanctions planned for non-compliance with this laware, on the one hand, the invalidity of appointments thatdo not meet these parity objectives, and on the other, thesuspension of attendance fee payments.

At Sycomore, we chose to anticipate this law by takingthis 40% threshold into consideration starting with the2016 Shareholders’ Meeting. Consequently, we some-times opposed the appointment of new male directorsor the re-election of Appointment Committee mem-bers when the 40% limit had not yet been attained. Thiswas the case, for instance, with Direct Energie (18%:vote against two members of the Appointments Com-

mittee), Tarkett (22%: vote against one member of theAppointments Committee), and Séché Environnement(25%: vote against one member of the AppointmentsCommittee). This commitment in favour of better gen-der balance on boards of directors fits in naturally withour investment philosophy. We believe that diversityis one of the sustainable performance drivers that wehave identified and embedded into our fundamentalcorporate analysis model. We are attentive to parity,as we are to generational or socio-cultural diversity, atall levels of the company. Although we are not in favourof persistent quotas over the long-term, we believethat this legal requirement is an efficient tool in theshort and medium term to accelerate the transition to-wards better gender balance on corporate boards.

Five years after the enactment of the Copé-Zimmer-mann Law, the impact of setting quotas is alreadyclearly visible in France. In 2015, 34% of the directorssitting on the boards of French Stoxx 600 companieswere female; these figures enable France to rank inthird place in Europe, behind Norway and Sweden.Note that this percentage is up 16 points compared to2011.It is no surprise that European countries that have in-troduced quotas over the 2011-2015 period – namelyFrance, Italy and Belgium – are also those that haverecorded the strongest improvement in gender balanceon corporate boards (+17 points on average versus +11points for the Stoxx 600)1.

...to see whether this positive momentum at the top ofthe corporate ladder will trickle down to the rest of theorganisation. Equity and diversity at all levels of thecompany remain priority engagement commitmentsfor Sycomore.

Source: Education CitoyenneIllustration ®Cannella

WE ARE NOW DETERMINED...

1Source: European Women on Boardshttp://european.ewob-network.eu/wp-content/uploads/2016/04/EWoB-quant-report-WEB-spreads.pdf


FOCUS ON THE “SHADOW COMEX” OF ACCORHOTELS

LEADING GLOBAL HOTEL OPERATOR

EVERY DAY, OVER 190,000 MEN AND WOMENTAKE CARE OF THOUSANDS OF CLIENTS IN 3,900 HOTELS PRESENT IN 92 COUNTRIES

A TURNOVER OF 5.6 BILLION EUROS IN 2015

As the influence of Millenials and Generation Y on cor-porate life and the place of women in the organisationhave become hot issues facing society today, somecompanies are innovating by creating new structuresable to compensate for the lack of diversity that re-mains the rule in many corporate organisations.

AccorHotels is one of these innovators. The grouplaunched a “shadow comex” in February 2016 with13 in-house managers aged under 35.

Is this a passing fashion or real innovation in the fieldof governance? To find out more, we spoke to SebastienBazin, CEO of the AccorHotels group, in early October.

When he joined the group three years ago, SebastienBazin wanted to shake things up. Aware that 90% ofstart-ups are now created by people aged under 35– an age bracket that represents over 65% of his240,000 employees – he wanted to go further thantraditional ‘reverse mentoring’, which involves re-cruiting young employees to work alongside moreexperienced workers.

His revolutionary idea in the field of human re-sources was ingenious: to constitute a shadow exe-cutive committee that would only include peopleunder 35, with a perfect gender balance – bearingin mind that the group’s executive committee isonly 16% female. This was a major achievement fordiversity…

In less than two weeks, each member of the executiveteam suggested two candidates; and seven youngwomen and six young men were selected following aninterview process. The CEO of the hotel group declaredthat in years to come, no decision would be taken by theAccorHotels group without consulting these 13 people,who will be expected to address the same issues as theexecutive committee. Furthermore, shadow comexmembers will have “access to 100% of all privileged

Source: Tweets by @AccorHotelsJobs. Groupe Acc

90% OF START-UPSARE NOW CREATED BYPEOPLE AGED UNDER 35

and confidential information available [to the CEO],whether concerning shareholders, margins, procure-ment, and distribution”. This committee, which boastsa female to male ratio of over 50%, will be directly in-volved in all major decisions taken by the group.

How successful was this project? We were fortunate tobe able to meet Sebastien Bazin in October 2016 to dis-cuss this initiative: does the “shadow comex” deliveron expectations? What would he change if he had to doit all again?

Beyond the 35 years age limit that caused some tensionwithin the company, the “shadow comex” is no longersimply consulted on issues that are of direct relevanceto the Millenials generation – such as e-commerce,client service, brand positioning…. They are kept in-formed of tougher issues such as corporate actionsor relations with trade unions, but on which they donot necessarily give their opinion. The “shadow

comex”, for instance, examined the most recentconcept developed by the group: the “Open Houses”launched in September 2016 targeting ultra-connectedusers aged between 18 and 35.

For Sebastien Bazin, this initiative is an undeniablesuccess from a managerial point of view. It is certainlytoo early for us investors to assess the real input andadded value for governance. We hope that such prac-tices, extended to over 20 subsidiaries that have alsoset up their “shadow comex”, will help to influence thestructure and the way incumbent governing bodiesoperate, either in terms of age, gender or diversity ofexperience.

Management has set the tone, the road map and theobjectives (cf. figures shown below). Now only timewill tell how successful the group will be in meetingthese targets.

Source: AccorHotels

ACCORHOTELS: ON THE ROAD TO GENDER EQUALITY

16% of women on the Executive Committee. Target for 2016: 20%; target for 2018: 30%

44% of womenon the Board of Directors

27% hotel managersare women Target for 2017: 35%

AccorHotels has made a formal commitment in the field of recruitment:

an equal number of male and female candidates will be “shortlisted” by 2017

AccorHotels wants

to improve gender pay equityat its Paris headquarters and in 3 other countries before the end of 2017


46% of womenwithin the group

Sycomore AM@sycomoream

68% of French companies own double vo-ting rights according to the @OECD


The proportion of female directors inCAC40 companies: 15 have not reached the40% threshold, 5 of which are not domiciledin France.@womencac40


Engie, the only #CAC40 companythat does not comply with genderrepresentation: less than 40% ofits directors are men!@engie


The average size of boards of directors hasfallen from 14.5 to 13.5 members in 2016,often at the expense of employee represen-tatives.


Out of 84 engagement initiatives by @Syco-more AM, 62% led to a positive/constructiveresponse from the company.


35% of the investors surveyed rely on#shareholder engagement to encouragecompanies to consider. #climate issues

Source: Novethic

Source: Proxinvest

Source: Proxinvest

Source: Proxinvest

Source: Proxinvest

Source: Sycomore AM

SR

IT

WE

ET

S



14 of the 120 largest French market ca-pitalisations used the #Florange Law toestablish double voting rights.


@Ubisoft managed to appoint two women withno other directorships.


55% of the directors who combine 4 or 5directorships are women. @ISS#gouvernance


2016 voting season: a high proportion (6.1%) ofchallenged resolutions in France, versus 3.75%in Europe. @votes2016


Percentage of women directors in CAC40 com-panies: the target is 40% by January 1st 2017.@women#CAC40


12.5% of Stoxx Europe companies have acontrolling shareholder (with over 20% of thecapital) and multiple voting rights.

Source: ISS, 2016 Voting Season Report


Sources: Proxinvest, ECGS



Sources: Proxinvest, ECGS

Virginie SEGHERSChairwoman

SHAREHOLDERFOUNDATIONS:PROVIDING STABILITYAND SUSTAINABLEPERFORMANCE

Virginie Seghers is a specialist in philanthropyand social entrepreneurship and has providedconsulting services to French and internationalbusinesses for almost twenty years.

Director of Admical (association that brings to-gether the largest corporate donors) from 1995to 2002, and of the European network CERECfrom 1999 to 2002 (a network of 12 associationsat the time for the promotion of corporatesponsorship in Europe), and later an indepen-dent consultant, Virginie Seghers has contribu-

ted to the structuring and development of a more entre-preneurial focused form of philanthropy. As a founder ofthe first training on corporate social responsibility and so-cial entrepreneurship at Sciences Po Paris, she also lec-tures at HEC business school and Paris-DauphineUniversity. Virginie Seghers is the Director of severalFrench and international foundations, she is also the co-founder of Mouves, sits on the Board of the AshokaFrance/Belgique/Suisse Fund and is an expert on theComptoir de l’Innovation of the SOS Group. She has alsoauthored several books on corporate sponsorship and so-cial entrepreneurship.

Virginie Seghers is a graduate of HEC and holds an MBAfrom the University of Berkeley and a Masters in CultureManagement from Dauphine University. In 2012, she wasthe youngest French woman to be appointed Officier desArts et des Lettres in recognition of her contribution tothe development of philanthropy in France.

IN

TE

RV

IE

W


Where does your interest for shareholderfoundations spring from? Is this not anoxymoron?

Shareholder foundations are foundations that owncompanies. In this model, the company no longer al-locates an – often minor – share of its earnings to aperipheral foundation; rather, the foundation ownsthe company, allocates investments, decides on stra-tegy and funds charities through the dividends it per-ceives.

This is a widespread model for corporate transfersand governance, particularly in Northern Europe:Carlsberg, Rolex, Sandoz, Bosch, Playmobil, Bertle-smann, Novo Nordisk…actually belong to foundations,in whole or in part.

In Denmark, 54% of listed companies are majority-ownedby such foundations. In Sweden, one third of the MOX30 index is controlled in this way. In these countries,shareholder foundations are not marginal; they are astructuring phenomenon – both from an economicand societal perspective.

Nevertheless, this economic reality – which switchesthe traditional roles of a company and a foundation –is out of our radars and appears, to some, as an in-trinsic contradiction: the word “foundation” conjuresup ideas of general interest rather than lucrative bu-siness, while “shareholder” refers directly to the ca-pitalist economy. For conservative mind-sets, thesetwo concepts are incompatible.

At Prophil, the strategic consultancy that I cofoundedwith Geneviève Ferone Creuzet, we focus on this thirdway that sits at the crossroads of capitalism and al-truism, always with a long term perspective. So it wasonly natural that we dedicated our first Europeanstudy1 to this relatively unknown and particularly ins-piring topic.

Known to be redoubtable “anti-takeoverpills”, shareholder foundations have oftenbeen decried by minority shareholders.What are their advantages and how do thesestructures help to create long-term value?

When they are majority shareholders, corporate founda-tions protect companies from takeover bids since it is im-possible to buy a foundation - they belong to no one! Bydefinition, foundations have long term missions; this en-sures that the majority shareholders are stable – and phi-lanthropic – but does not prevent the company from beingpartially listed on the market.

The mission statement, generally laid out in the articlesof association, tends to be of a dual nature – economicand social. On the one hand, the foundation needs to pro-tect and develop the company, preserve the industrial le-gacy and the jobs in the country; on the other, it commitsto serving the common good.

1 “Shareholder Foundations”, a study published by Prophil in partnership with Del-sol law firm and the Philanthropy Chair at ESSEC, and with support from Mazars.

Source: Prophil, “Shareholder Fondations – The First European Study

In Nordic countries, this dual mission is perfectly takenon board, which is not (yet) the case in France, where thecommon good is still clearly set apart from economic in-terest.

With shareholder foundations, companies are able tokeep the equity capital within their country, which clearlyserves the principle of “economic patriotism”. It is unde-niable that Denmark has been able to hold onto so manyof its industrial beacons thanks to this widespread model– 1,400 companies, including some of the largest in thecountry, are owned by foundations.

Our role is to prove to minority shareholders that this ca-pital structure can create value. The – albeit rare - aca-demic research that we have been able to read inGermany or in Denmark shows pride in this model; itseems to show better resilience to the crisis, deliver eco-nomic performance that is superior or equivalent to “tra-ditional” companies, protect jobs and give the company’smission a meaning that is better shared by all.

In most cases, foundations are not expectedto get involved in the operational managementof the companies they own. However wouldit not serve the common good if the foundationswere to provide advice and support to someof the business units (procurement, R&D,CSR etc…)?

You are absolutely right. But the answer hinges on what

you mean by “common good”. The CEO of StaedtlerFrance, which is wholly-owned by a foundation in Ger-many told us: “we believe that ensuring the sustainabilityof a company over time and preserving employment andproduction in the country serves the common good”.

The Steadtler Foundation reinvests 95% of the company’sprofits in R&D to ensure that no substance that may betoxic for the environment, employees or users is used inthe pens and erasers that are manufactured, whichconstitutes a major technological challenge in the indus-trial sector of ink.

The Foundation’s mission is also to preserve employmentin Germany (80% of the jobs have stayed in Nuremberg,although the company is present in 23 countries) and todonate 5% of its annual profits to charities.

This example proves that the fundamental role of thefoundation is to combine performance with social/envi-ronmental impact, responsibility and sustainability. Thefoundation’s long-term vision and its focus on economicinterests and the common good are able to influence thestrategy and the management of the company.

“THE FOUNDATION HAS TO PROTECTAND DEVELOP THE COMPANY ...IT IS COMMITTED TO SERVINGTHE COMMON GOOD”



Governance therefore becomes a crucial issue. Dependingon the countries and applicable regulation, companies areeither directly owned by a foundation, or indirectly via aholding company (as in Bosch and Novo Nordisk). The di-rectors of the foundation are often managers or execu-tives, but they can also be more detached from operationalmatters. The permeability between the foundation and thecompany will hinge upon this governance, on the qualityof the qualified people who sit on the board of directors,and on the role of the foundation as drawn up in the arti-cles of association. In France, current regulation requiresthe two entities to be clearly separate via an intermediaryholding, and that the members of the foundation consti-tute a minority on the board of directors. This naturally re-duces the positive influence that the foundation could haveon the management of the company.

The legal status of “shareholder foundation” isstill very little used in France. What recent orfuture developments could change this state ofaffairs?

It is true that the model is not very well known. Howeverit is important to note that a shareholder foundation is nota specific status: it is possible for French foundations (andendowment funds) to be company shareholders, particu-larly since the Jacob Dutreil Law of 2005.

France boasts a high-profile example with the FondationPierre Fabre, which owns 86% of the Pierre Fabre labo-ratories. Pierre Fabre, who had no heirs, had wished totransfer his company gradually to a foundation, to protectits future, maintain the legacy in France and develop phi-lanthropic initiatives, particularly in Africa, so that his hu-manist principles could live on.Source: Prophil, “Shareholder Fondations – The First European Study


17L’ISR WAY - LA GOUVERNANCE

The press group La Montagne is also majority-owned bya foundation. Two other major shareholder foundationsare worth mentioning: the Fondation Christophe et Ro-dolphe Mérieux, which owns 32% of Institut Mérieux, andthe more recent Fondation Avril, which owns over 30% ofthe Sofiprotéol group.

But these foundations are still few and far between!

We have identified several headwinds that are hinderingthe growth of shareholder foundations: cultural head-winds (beliefs that a foundation is not capable of managinga company/the common good and economic interests areincompatible etc.), technical and legal headwinds (the re-serve portion of an estate often prevents the transfer of acompany to a foundation if there are heirs etc.).

Bearing this in mind, we took advantage of our first majorEuropean conference dedicated to this field, which tookplace on September 20th at the Ministry for Economy(Bercy), to put forward some proposals that could gra-dually help ease these impediments. 2

First, we believe it is necessary to ease the status of “cha-ritable foundations” and to authorise a reduction in theheirs’ reserve portion. Second, in agreement with XavierDelsol, lawyer and partner in our research, we believe inthe relevance of creating a new specific status: founda-tions with economic interests. Such foundations wouldbe granted the company’s stock in an irrevocable and ina-lienable way, but would remain controlled, if applicable,by the founder(s) and his/her heirs or successors appoin-ted in the articles of association. As in Nordic countries,the foundation’s primary mission would be to guarantee

the protection and the long-term future of the company,while serving the common good and philanthropic causeswith the dividends it perceives.

Within the next fifteen years, 700,000 businesses will bepassed down, and many of them are looking for stableshareholders, willing and able to uphold the values of thefamily, we believe that we have much to learn from theshareholder foundation model.

2 Visit www.fondations-actionnaires.eu


“...CREATING A NEW SPECIFICSTATUS: FOUNDATIONS WITHECONOMIC INTERESTS.”


Prophil is a strategic consulting firm, specialised in neweconomic and philanthropic models.

Prophil helps companies and entrepreneurs manage theirinnovation projects, in France and abroad. These initiativescombine donations and investment to create synergiesfrom economic efficiency and social impact.

Launched in 2013, Prophil embodies the 20-year long en-gagement of its founding partners: Virginie Seghers, spe-cialist in new philanthropy and social entrepreneurship,and Geneviève Ferone Creuzet, a pioneer in responsiblefinance and corporate sustainable development.

Source : Prophil, “Les fondations actionnaires d’entreprises”. Virginie Seghers (Présidente de Prophil) et Xavier Delsol (Associé, Delsol Avocats)

SRI BY SYCOMOREESG-CFOOTPRINTOur ESG analysis is based on the in-depthunderstanding of extra-financial criteriastructured around five themes: Suppliers,society & state, People, Investors, Clients,Environment. Its objective, complementary tofinancial analysis, aims to provide insightsthat can refine the risk/opportunity analysisof companies over the mid to long-term.

Sycomore AM takes into account companies’ESG issues when determining their risk pre-

ESG RATING BREAKDOWN OF POSITIONS ACCORDING TO ESG RATINGS

FUNDS ESG rating (from 1 to 5)

FRANCECAP 3.3EUROPEAN GROWTH 3.2EUROPEAN RECOVERY 3.1SÉLECTION PME 3.3PARTNERS 3.2SÉLECTION CRÉDIT 3.2SÉLECTION RESPONSABLE 3.4ECO SOLUTIONS 3.4HAPPY@WORK 3.6UNIVERS SYCOMORE 3.3EURO STOXX 3.1

Data as of 09.30.2016. Fund performance may be partly driven by the ESG indicators of portfolio positions but these are not the sole determining factors. Past performance is no guide to futurereturns. The funds offer no guaranteed yield or performance and carry a risk of capital loss. Prior to making an investment decision, investors are requested to consult the relevant KIID available on ourwebsite: www.sycomore-am.com.

mium. The entire investment universe is analysed using aproprietary ESG research model that is integrated to our fi-nancial valuation tool.

Developed in-house, our scoring model includesover 100 criteria. The model is fed exclusively withgross data disclosed by the companies and enhancedthrough regular meetings with the management teams.Following this analysis process, each company is awar-ded a rating on a scale of 1 to 5.

The ESG footprint reflects the sustainable developmentcharacteristics of each fund and offers additional in-formation.

Since 2015, Sycomore AM’s funds have disclosed theircarbon intensity. The objective of this indicator is tocompare the carbon intensity of a given fund relative to itsbenchmark (in CO2teq) for a one million euro invest-ment. Scope 1, scope 2 and part of scope 3 emissionsare taken into account in the calculation process.

TH

EF

RE

ED

OM

TO

EN

GA

GE

RECENT SRI MEETINGS

TOP 10 PORTFOLIO RATINGS

ESG rating(1 to 5)

MICHELIN 3.9LEGRAND 3.9UPM-KYMMENE OYJ 3.9HALMA 3.9SEB 3.8SMURFIT KAPPA 3.8DASSAULT SYSTEMES 3.7AMER SPORTS 3.6ACCOR 3.5SODEXO 3.4

ESG rating(1 to 5)

SOPRA GROUP 3.3BUREAU VERITAS 3.3DS SMITH 3.3ESKER SA 3.3TELEPERFORMANCE 3.3FIGEAC AERO 3.2BOUYGUES 3.1GEA GROUP AG 3.1ORCHESTRA 2.9RENAULT 2.7

Data as of 09.30.2016.

STOCKS ESG rating(1 to 5)

SCHNEIDER ELECTRIC 4.1AIR LIQUIDE 4.0NOVO NORDISK 4.0TARKETT 4.0UNIBAIL 4.0

STOCKS ESG rating(1 to 5)

HALMA 3.9LEGRAND 3.9MICHELIN 3.9SVENSKA HANDELSBANKEN 3.9UPM-KYMMENE OYJ 3.9


Data as of 09.30.2016. Fund performance may be partly driven by the ESG indicators of portfolio positions but these are not the sole determining factors. Past performance is no guide to future returns. The funds offerno guaranteed yield or performance and carry a risk of capital loss. Prior to making an investment decision, investors are requested to consult the relevant KIID available on our website: www.sycomore-am.com.

SRI BY SYCOMOREOUR INVESTMENTCAPABILITIES

ESG RATINGS & CARBON EMISSIONS

ENVIRO

NMEN

T

SOCIAL

CARB

ON

GOVE

RNAN

CE

SYCOMORE SÉLECTION RESPONSABLE

A responsible selection of European equities that comply with the principles of sustainable development

SYCOMORE SÉLECTION CRÉDIT

A responsible selectionof European corporate bondscovering the full spectrum (IG, HY and NR)


PERFORMANCE SINCE INCEPTION

1 year performance: 0.6%1 year volatility: 15.8%

PERFORMANCE SINCE INCEPTION

1 year performance: 4.3%1 year volatility: 2.6%

Since 2011

Since 2013

Sources : Sycomore AM, Factset. Data as of 09.30.2016, I share class. TR = total return (dividends reinvested). Fund performance may be partly driven by the ESG indicators of portfolio positions but theseare not the sole determining factors. Past performance is no guide to future returns. The funds offer no guaranteed yield or performance and carry a risk of capital loss. Prior to making an investment decision,investors are requested to consult the relevant KIID available on our website: www.sycomore-am.com.

SYC

OM

OR

EA

SS

ETM

AN

AG

EM

EN

T

INVESTMENT& ENGAGEMENT

*Data as of0

9.30

.201

6.

PARTICIPATION & CONTRIBUTION TO INDUSTRY AND STATEWORKING GROUPS

Created in 2001 and majority-owned by its founding partners and employees

Recognised expertise on European markets

Performance-driven investment culture based on active management

A team of 52 people of which 6 are ESG specialists

AUM of €4.5bn*,primarily on behalf of French institutional investors

Investment capabilities acknowledged as “High Standard” since 2008by Fitch Ratings


OUREDGE PROPRIETARY ESG RESEARCH

AN ANALYSIS MODEL,exclusively fed with gross data published by companies

Continual CONSTRUCTIVE DIALOGUE with Sustainable Developmentand Investor Relations teams of corporates

A CONVICTION-DRIVEN SRI APROACH recognised since 2011 via the Novethic Label

Firm ENGAGEMENT with key playersin the field of SRI: PRI, CDP, French-SIF (FIR), SFAF, Government, Ministries, Academics

A team of 6 specialists dedicated to ESG RESEARCH

OUR SRI ASSETS UNDER MANAGEMENT: €1,332m

Growth of SRI assets under management (in €m)

TH

ER

ES

PO

NS

IB

LE

WA

Y

Published document by Sycomore Asset M

anagem

ent. Any reproduction, whole or in part, is strictly prohibited.@November2016

14 avenu

e Ho

che 75

008 Pa

riswww.sycom

ore-am

.com

by

SY

CO

MO

RE

AS

SE

TM

AN

AG

EM

EN

T

l’ isr way - sycomore am · or the re-election of appointment committee mem - bers when the 40%...

Documents