BNP Paribas Asset Management (BNPP AM) has unveiled a fund investing in companies with a proactive approach to reducing social inequalities.
The group has restructured its Human Development Fund and renamed it as the Inclusive Growth Fund amid a shift to focus on reducing inequalities in income, education, gender, ethnicity, geographic origin, age or disability.
It has adopted a proprietary Inclusion Score to rate companies out of 100 to create a concentrated portfolio of 40 to 60 equities. It incorporates an enhanced weighting for social factors, which account for 65% of the overall score, compared to 20% for governance criteria and 15% for environmental. Companies that score below 20 are automatically excluded from the investment portfolio.
The investment strategy is based on five key social challenges identified as major causes of inequalities:
• protecting the most vulnerable members of society
• promoting social mobility
• developing a quality offering accessible to the greatest number of people
• respecting business ethics
• promoting decarbonisation and biodiversity
Managers of the Inclusive Growth Fund, Maria Luz Diaz Blanco and Anne Froideval (pictured), commented: “By integrating specific performance indicators, such as employee turnover rate or board diversity, our proprietary model allows us to filter the investment universe to identify the leaders. Our approach means that we can build a high conviction equity portfolio of 40-60 stocks from around 1,000 companies initially analysed. This allows us to meets the expectations of our clients who are looking to generate a positive impact on tomorrow’s society while generating long-term value.”