ESG investments: a genuine opportunity for your Pension Fund’s investments!
The topic of sustainability has become a key theme in asset management. Investment decisions nowadays are no longer based solely on economic considerations, because a new dimension has now to be taken into account: companies’ responsibility for the environmental, social and corporate governance (ESG). In the era of climate change, social sustainability and shareholder commitment, investments that comply with ESG criteria are becoming increasingly popular in the financial world in general and in occupational benefits funds in particular. Thanks to their positive impact on the environment and society, they meet the needs of a growing number of investors who are keen to align the management of their savings with their personal convictions and to help build a better world for the future.
Contrary to a long-held popular belief, incorporating sustainability into asset management does not mean sacrificing performance compared to traditional investments. In fact, experience shows that ESG investments can have a positive influence on the risk/return factor, as sustainable companies with a long-term focus proactively integrate social trends and risks related to the current and future challenges of our world into their business model. Therefore, they are less crisis-prone and often achieve higher risk-adjusted returns in the long term.
One of the fundamental guiding principles of the FCT Group, which is made up of two collective foundations dedicated to occupational pension plans (FCT and FCT 1e), is to offer affiliated companies the entire diversity and flexibility of an open architecture. In terms of asset management, this means that each Pension Fund is free to choose its banking partner or portfolio manager as well as the investment strategy for its occupational pension assets. To support the companies in their decision, the FCT Group offers a choice of three models: the pre-selected, customized, and individual strategies.
Today, the FCT Group is convinced that taking ESG criteria into account can be an additional opportunity for affiliated Pension Funds’ investments, and it wants to supplement these strategy proposals by publishing a Responsible Investment Charter for FCT and FCT 1e. The aim is to clearly define our policy guidelines in this field: the development of an ESG investment range, the transparent disclosure of information to affiliated companies and insured persons, and the commitment to promoting good governance practices. In this manner, we are once again contributing to the implementation of a framework that enables Pension Funds to promote the sustainable profitability of their investments while optimally securing their long-term future.
We are pleased to enclose our Responsible Investment Charter with this newsletter and will naturally be pleased to help if you have any questions or require further information on this topic.