CPR Asset Management (CPR AM) has launched the first Social Impact fund to address the issue of social inequality
The CPR Invest – Social Impact fund will be an actively managed global equity product containing around 70 stocks, which are scored using internal methodology based on 40 criteria.
CPR AM, the thematic equities arm of Amundi, said the widening of economic inequality around the world in recent decades has had a negative impact on growth, with the the incomes of the richest 1% increased twice as much as that of the poorest 50%.
The group has come up with holistic definition of inequalities is based on five pillars: Labour & Income, Health & Education, Diversity, Taxation, and Human Rights & Access to Basic Needs.
As inequalities must be assessed at country level first, the management team designed evaluation criteria for countries (e.g. progressiveness of the tax system, legal minimum wage, share of total expenditure on health and education as a percentage of GDP, legal provisions to combat discrimination, workers’ rights). The group said they then compile an inequality score for 3,000 companies (e.g. pay differentials, working conditions, diversity policy, tax optimisation, employee training). As a result, companies are assessed according to their efforts in reducing inequalities in the countries where they are headquartered.
The fund will be managed by Yasmine De Bray (pictured) and Eric Labbe.
Valérie Baudson, CEO of CPR AM, said: “The increasing tensions in our societies illustrate the pressing need for a transition to a fairer economic model. As an asset manager, we seek solutions that are concrete and relevant to social issues, and to fulfil our fiduciary duties. We believe that investing in listed companies that pay attention to social issues is a driver of value creation over the long term. CPR Invest – Social Impact provides investors with a unique solution taking into account the financial risks associated with inequalities and making it possible to contribute to reducing them through their investments.”
Emma Saunders, senior collectives analyst at Rathbones, saidthere can be a difficulty in quantifying ‘impact’, given there is no standard template.
“What we are finding is that houses are looking to offer some kind of differentiation in the ESG space – ‘social impact’ is arguably a brand of that. At this point in time, we have found more demand for strategies that encompass environmental and governance themes alongside social impact. However, it is undoubtedly an interesting area.”
The fund will sit in CPR AM €10bn thematic equities range.