Since 2005, Demea Invest has placed the environment at the heart of its investment strategy with this founding commitment: "combining financial performance with environmental commitment". With more than half of its assets under management dedicated to the environmental transition, Demea Invest is a pioneer and leader in responsible investment.
The challenge is to encourage investment players to specify their level of integration of Environmental, Social and Governance (ESG) criteria and to assess their impacts on financial performance, but also to establish common standards for financial products presenting or claiming ESG or sustainable aspects.
ESG risks are integrated into investment processes and monitoring of portfolio companies, in accordance with the SFDR regulation. They are broken down into two elements:
Sustainability risk arises when there is an environmental, social or governance event or situation which, if it occurs, could have a significant negative impact on the value of an investment. It is similar to financial risk.
Demea Invest is a signatory of numerous initiatives such as UN PRI (Principles for Responsible Investment), CDP (Carbon Disclosure Project), iC20 and The Shift Project.
The regulation is applicable at the entity level
That is to say at the level of portfolio management companies, but also at the product level, such as investment funds.
The SFDR regulation requires each product to be categorized according to its ESG characteristics. The definition of each of these categories is as follows:
It covers funds that do not integrate any form of sustainability into the investment process and could include investments currently excluded by ESG funds, such as tobacco companies or coal producers. These funds may continue to be sold in the EU (European Union), provided they are clearly marketed as unsustainable.
It applies “…when a financial product promotes, among other characteristics, environmental or social characteristics, or a combination of these characteristics, provided that the companies in which the investments are made follow good governance practices. »
It covers products with the objective of tailor-made sustainable investment and applies “… when a financial product has the objective of sustainable investment”.
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