Understanding Responsible Investment #1 - Sustainable and Positive Investment - Definition
"Understanding Responsible Investment" Podcasts
Episode #1: "Sustainable and Positive Investment: Definition"
by our CSR expert Dorothée Chapuis,
Head of Corporate Social Responsibility and Responsible for Société Générale Private Banking Luxembourg, Monaco and Switzerland.
Click on the button below to play.
Spotify
Apple Podcasts
Full Script:
Dorothée Chapuis: Hello everyone and welcome to the first episode of our "Understanding Responsible Investment" podcast series. I am Dorothée Chapuis, Head of CSR for Société Générale Private Banking Luxembourg, Monaco and Switzerland. Before explaining what socially responsible investment is, let's see how this theme fits into our global private banking strategy.
At the beginning of 2020, the Société Générale group adopted a "raison d'être" which is "building together, with our clients, a better and sustainable future through responsible and innovative financial solutions". For private banking, providing financial solutions to build a more sustainable world means being able to help you make a greater societal impact with your assets and offer you sustainable and positive investments.
About terminology to be clear on the terms used: you often hear people talking about sustainable or responsible investments, or SRI or ESG investment; SRI meaning “Socially Responsible Investment”, and ESG being “Environment, Social and Governance”. It's basically the same thing: with these words, we are aiming for financial products that incorporate sustainable development considerations. At Société Générale Private Banking, we have chosen the term "SUSTAINABLE AND POSITIVE" offer to refer to all of our products that integrate sustainable development. For financial management solutions such as our internal collective funds or management mandates, we prefer the term “SRI management”.
What is sustainable development?
It is the idea that economic growth must be part of a long-term perspective by integrating issues related to the environment and the functioning of society. The term was first used in 1987 by the United Nations, which defines sustainable developmentas development that meets the needs of the present without compromising the ability of future generations to meet their own development needs.
According to the FIR, the Forum for Responsible Investment, SRI is an investment that aims to reconcile economic performance with social and environmental impact by financing companies and public entities that contribute to sustainable development, regardless of their sector of activity. By influencing governance and the behaviour of stakeholders, SRI promotes a responsible economy. It is therefore an investment that takes into account traditional financial criteria but also so-called extra-financial criteria. The latter are derived from the CSR (Corporate Social Responsibility) policies of companies. They are classified according to three pillars: “E” for Environment, “S” for Social and “G” for Governance. Companies don’t integrate sustainable development issues with the same intensity. They can be given a dedicated rating, most often called an ESG Rating, which enables them to be compared with each other.
At the same time, how can SRI be defined?
What are the concepts covered by ESG?
In the environment part, we find for example the company's energy consumption, greenhouse gas emissions induced by the activity, production and waste treatment. The S for Social covers how the company manages its human capital, for example on the subjects of safety, climate quality and social dialogue or supply chain management. Finally, under the G, the Governance pillar covers, for example, the issues of quality, diversity and independence of decision-making bodies, executive remuneration, transparency and shareholders' rights.
To measure how a company is interested in development, we can also take the analytical grid of the 17 sustainable development goals defined by the United Nations in 2015. At Société Générale Private Banking, we have grouped these 17 objectives into the following 3 major ones: firstly, issues related to the biosphere, such as the protection of the oceans, or biodiversity, or forests...; secondly, issues related to society, i.e. those that contribute to making our human societies more harmonious, such as gender equality, access to education or an efficient and egalitarian healthcare system; and thirdly, issues related to sustainable economic development, such as the development of infrastructure, the circular economy or sustainable cities.
Now that we have defined sustainable and positive investment, does it imply a compromise in performance and how do we get there? This is what we will see in our next podcast. See you soon!
This podcast is part of a series of episodes proposed by Societe Generale Private Banking to understand responsible investment. It is available on the Spotify and Apple Podcast streaming platforms via the "#Private Talk by Societe Generale Private Banking" program and on our website www.privatebanking.societegenerale.com. Feel free to subscribe to be notified when the next episode is released and to spread the word.
Would you like to discuss this subject further with us?
Important information
The content provided on this page is for informational purposes only and is not contractually binding. The materials contained herein are not intended to provide investment advice or any other investment service and do not constitute a personal recommendation, advice, or an offer from Societe Generale Private Banking to purchase, sell or subscribe to investment services and/or financial products and/or investments in the aforementioned asset class. Some of the products, services and solutions described can carry various risks and involve the potential loss of the entire invested amount, if not theoretically unlimited loss. As such, they are reserved for a certain category of investors and/or adapted solely for informed investors who are eligible for such products, services and solutions. The information set out above shall not be considered legal, tax or accounting advice.
The wealth management and financial solutions, offers, products, services and activities mentioned on this page depend on each client’s personal situation, the legislation applying to them, and their tax residence. Consequently, the offer presented may not be eligible for implementation, adaptation or approval at all of the Societe Generale Private Banking entities and must comply with Societe Generale Group's Tax Code of Conduct. Furthermore, access to some of these products, services and solutions is subject to specific conditions, notably in respect of eligibility.
Please contact your private banking adviser to check that these offers meet your needs and are suited to your investor profile (knowledge, experience in investment, financial situation, including ability to withstand losses, and investment objectives, including risk tolerance).
Societe Generale Private Banking shall under no circumstances be held liable for any decision taken by a reader on the basis of this information. Before Societe Generale Private Banking can provide a potential investor with an investment service and/or a subscription to financial products, the investor must first be made aware of, understand and sign the related informative and contractual documentation, notably in respect of the associated risks (prospectus, Key Investor Information Document, Term Sheet, etc.). The potential investor must not base his/her investment decision and/or give investment instructions solely on the basis of this document.
All Societe Generale Private Banking entities reserve the right not to update or amend this document and shall accept no liability in this regard. The present document has the sole aim of informing investors, who will make their investment decisions without overly relying on this publication. The Societe Generale Private Banking entities shall under no circumstances be held liable for the accuracy, relevance or exhaustiveness of this information. The Societe Generale Private Banking entities give no explicit or implicit guarantees as to the accuracy or exhaustiveness of this information or of the profitability or performance of any asset class, country or market.
This document is not intended as a list or summary of all the terms and conditions pertaining to financial products, nor to identify all or some of the risks that may be involved in the acquisition and/or sale of a financial product/investment in any of the aforementioned asset classes.
The historical data and the information and opinions herein have been obtained from, or are based upon, external sources that Societe Generale Private Banking entities believe to be reliable but have not been independently verified. The Societe Generale Private Banking entities shall under no circumstances be liable for the accuracy, relevance or exhaustiveness of this information. Information provided on past performance, even repeated performances, is in no way a guarantee of future performance and may not be repeated. The value of an investment is not guaranteed and the value of investments may fluctuate. These forecasts about future performances are based on assumptions which may not be realised and do not therefore provide any assurance or guarantee with regard to the expected results of the investments in the aforementioned asset classes.
Generally speaking, Societe Generale Group companies may be market makers, conduct transactions involving the securities referred to on this page, and may provide banking services to companies whose asset classes are mentioned on this page, as well as the subsidiaries thereof. Societe Generale Group companies may, from time to time, conduct transactions, generate profits, hold securities or act as adviser, broker or banker in relation to these securities, or derivatives thereof, or in connection with the asset classes mentioned in this document. Societe Generale Group companies may, from time to time, acquire or liquidate positions on the securities, or the underlying assets (including derivatives), mentioned on this page or, where applicable, any other assets. Consequently, this may affect any returns for a potential investor either directly or indirectly. Societe Generale Group companies have no obligation to disclose this page or take it into account in providing advice or conducting transactions with a client or on behalf of a client. The administrative structure of the Societe Generale Group includes all safeguards needed to identify, control and manage conflicts of interest. To this end, Societe Generale Private Banking entities have implemented a conflict of interest management policy to prevent such conflicts of interest. For further details, Societe Generale Private Banking clients may refer to the conflict of interest management policy given to them by the Societe Generale Private Banking entity of which they are clients.
Non-financial analysis, also known as ESG analysis (Environmental, Social, Governance), is essential for evaluating a...
Joint interview, Croisine Martin-Roland, Head of Philanthropic Support, and Jean-Christophe Jouannais, Sustainable...
Key report
According to the Brundtland Report of 1987, sustainable development aims to meet the needs of the present without...
Sustainable finance is a concept that integrates environmental, social, and governance (ESG) criteria into investment...