ESG & SRI APPROACH

OUR PHILOSOPHY

• At Lazard Frères Gestion, we believe that actively addressing environmental, social and corporate governance (ESG) considerations is essential for the sustainability of any company’s economic performance.
• Indeed, the long-term performance of investments does not depend on financial strategy alone. Companies must interact with their social, economic, and financial environments.
• To ensure this, we consider extra-financial criteria:
  - Social criteria: by valuing human capital
  - Environmental criteria: by preventing the occurrence of all risks impacting our environmental
  - Governance criteria: by respecting the balance between management and shareholder structures to prevent potential conflicts of interest and ensure minority shareholders are respected.
  

                              Download the  ESG Policy  (Article 173 of the law on Energy Transition for Green Growth Act)

IMPLEMENTATION IN LAZARD FRERES GESTION ASSET MANAGEMENT

Integrating ESG Criteria In Our Investment Strategies

• ESG criteria are embedded into our strategies to offer a better understanding of the underlying ESG risks for a company, or a sovereign asset. They differ according to the asset class or investment strategy:

  - Equities: ESG criteria are embedded in the risk premium of our valuation models
    % of assets under management affected: 100% of AUM

  - Convertible bonds: our ESG criteria analysis is included in our investment scenarios
    % of assets under management affected: 100%

  - Fixed income: ESG criteria are included in our assessment of the credit spread
    % of assets under management affected: 100%

Engagement

We consider corporate engagement, as opposed to shareholder activism, to be constructive when it proactively encourages organisations to improve their ESG practices.
Constant dialogue with company management, along with our proxy voting policy, enable us to influence corporate conduct in terms of governance as well as on social and environmental issues.

                                        Download our Engagement Policy

Lazard Frères Gestion is currently working on a complete review of its engagement and ESG documentation in compliance with the new regulatory requirements from the French “loi PACTE” (2019).

Proxy voting policy

• Our proxy voting policy highlights our endeavour to safeguard the interests of minority shareholders in the long term and avoid conflicts of interest that favour majority shareholders, senior managers or any stakeholder to the detriment of minority shareholders.

                                        Download our Voting Policy

                                        Download our latest Annual Voting Report

OUR SRI STRATEGY

• Over 15 years ago, we entered into a partnership with Vigeo-Eiris, an independent SRI ratings agency, to combine our financial analysis with the best SRI competence available.
• This expertise applies to our equities management through our Lazard Equity SRI fund created in June 2001. This Eurozone Equity fund was awarded the SRI Label in 2018 following a strict and independent labelling process.
• The non-financial analysis favours the "Best in Class” approach, which is an ESG selection favouring the issuers with the highest ratings within their sector of activity.
• Our human resources and environmental criteria carry the most weightings in our investment criteria.
  
  Lazard Frères Gestion has strengthened its SRI management offering with the launch in 2020 of a Buy & Monitor fund, Lazard Sustainable Credit 2025 fund. The approach chosen is a "Best in Universe" type of approach, consisting of selecting issuers on their ESG performance without sector distinction.

EXTRA-FINANCIAL REPORTING

• Carbon footprint and energy transition efforts
  Lazard Frères Gestion decided to measure carbon footprints and energy transition efforts for all funds with assets exceeding € 500 million. The perimeter also covers our SRI management with no minimum threshold.

                                   Examples of Carbon Footprint and Energy Transition Efforts
  

• ESG reporting
  We produce tailored reports that can be adapted to clients’ particular constraints and which highlight ESG information.

                                  Download the carbon footprint and energy transition reporting in the Environmental Footprint Report - Lazard Equity SRI
  

OUR COMMITMENTS

• Lazard Frères Gestion has been a signatory to the PRI (Principles for Responsible Investment) since 9 February 2015 and commits to upholding the six United Nations Principles for Responsible Investment. Lazard Frères Gestion reaffirms the desire to consider environmental, social, and governance issues when conducting analysis and making investment decisions.

• Lazard Frères Gestion is a member of the AFG’s Responsible Investment Committee and actively participates in various industry committees.