As greenwashing has become one of the priorities of regulators since the adoption of the revised version of MIF2 in Europe and the SEC investigations into ESG funds in the United States, we believe that it is increasingly essential for investment funds and asset managers. to formalize an ESG policy. Thanks to the respect of well-established ESG practices, the ability to engage with portfolio companies and the implementation of quantifiable indicators, IDI is well positioned within an environment marked by increasingly restrictive ESG-related regulations, with ESG becoming predominant for many many investors.
In the past few months alone, the SEC has opened investigations into the ESG commitments of a number of groups as large as DWS, Goldman Sachs AM and BNY Mellon IM. These surveys reflect the growing importance of ESG and the need for precise indicators to monitor progress on this front. In a context where even the AMF has made greenwashing its priority, IDI’s ESG policy and its intention to develop precise metrics measuring its progress on this front in line with the PRI is more than appreciable.
Faced with ESG issues, IDI has created an ESG committee at Supervisory Board level and set up an internal ESG working group. IDI has also defined an internal roadmap including concrete objectives and enabling its ESG performance to be assessed. As a holding company with no economic or manufacturing activities of its own, IDI must encourage the creation of long-term value and improve the ESG practices of the companies in its scope through active ownership.
IDI’s approach to sustainable development applies to all stages of the investment process: pre-investment, holding period and exit. Thus, upstream of the investment, IDI takes ESG criteria into account when making its choices. IDI helps companies adopt more responsible practices as soon as they enter the scope of the holding company. To do this, IDI identifies ESG issues and defines with the companies the points of improvement from which the progress made on this front will be measured. During the exit phase, IDI will add an ESG section to the documentation and valuation and specify its contribution to the ESG performance of the participation.
As part of its ESG approach, IDI has become a signatory to the United Nations Principles for Responsible Investment (PRI). In this context, the group is still striving to improve its ESG practices and to strengthen its collaboration and exchanges with the investments in its scope in order to comply with more specific ESG roadmaps. IDI now follows a methodical approach to ESG issues, with defined objectives and time horizon. IDI has also put in place tools to monitor the progress of its investments on the ESG front. In the current context, the group’s ability to get directly involved via an active shareholder base is very valuable.
Compliance with ESG practices is not self-evident for holding groups, which tend to favor the activity. The tone of IDI’s speech in terms of ESG is original, offering a well-thought-out framework on which the group intends to rely to carry out its permanent controls.