The lack of transparency in sustainability legislation and poor corporate disclosure does not mean that we should not strive for sustainable investing and for more inclusion and gender equality in the asset management industry, argues Maxime Carmignac, managing director of Carmignac UK.
Carmignac is a privately-owned French asset management firm with some 32 billion euro in assets under management. The investment firm, founded in 1998, has had a presence also in Luxembourg since 1999.
In an interview with Investment Officer, Carmignac, daughter of founder Edouard Carmignac, said sustainable investing requires banks and asset managers to be clear and transparent towards their clients about their approach.
“A lot of things are also shifting. Nuclear power used to be seen as good and armament as bad anyway and now people are less sure about that. In any case, we have to be transparent about the criteria we use so that we can help our clients invest their capital according to certain ethical rules,” Carmignac said
Internal sustainability model
Since October 2020, Carmignac has had its own internally developed model called «Start”.
“That tool has allowed us to integrate ESG 100 per cent into our investment processes,” Carmignac said. ”The goal is not to be perfect now, but we want to learn and gradually get better. For me, that is the essence. The data comes from eight different data providers and leads to 34 criteria. There are both quantitative and qualitative criteria.”
“Before the investment decision is made, the manager can decide whether or not to override the quantitative criteria. That way, we ensure ESG integration into our investment philosophy. After that, engagement with companies is obviously important to steer them in the right direction.”
Carmignac said the tool has enabled the asset manager to classify 92 per cent of its funds according to Articles 8 and 9 of the SFDR regulation. Carmignac said this is mainly a bottom-up exercise and targets are spread over time. “Nor do we believe that divestment is the answer, because then lower-quality players will take over the market. We prefer to bet on engagement.”
Still a male bastion
The number of women working in the financial sector is limited, as it remains a male bastion. Nevertheless, the situation is turning around in recent years, with several initiatives at home and abroad, such as Women in Finance.
Carmignac: “I started my career as a buy-side analyst in the energy sector and there was only 1 woman out of 45. So I have experience of it, but it is not that there are no women and I think it is going in the right direction. I don’t want to argue about how many women or men there should be or who is better than the other, but I do think there should be diversity at every level, not only in terms of gender, but also in terms of ethnicity and social origin.”
As examples, she cited the Carmignac Patrimoine, Carmignac Sécurité and Carmignac China New Economy funds, which are largely managed by female fund managers. “If you look at the top 10 funds managed by women in Europe, you will find two from Carmignac. That sends a strong signal to the outside world.”
Maxime Carmignac does not think that women necessarily make better investment decisions than men, but rather that women are under-served as end clients, partly due to a lack of representation in the industry itself. This also applies to some ethnic or social groups. There are initiatives working on this, she said.
“At Carmignac, we have always been committed to ethnic diversity and we are proud that our 300 employees, have 34 different nationalities. This is an important issue for us because we want a reflection of society in our company.”
There are four criteria for keeping women on board an organisation and ensuring they can progress. “The first criterion is flexible working, and that is thankfully more established thanks to the Covid crisis. The second criterion includes realistic role models for women, both internally and externally. Third, companies should also offer coaching to women to help them «settle in» more. Fourth, men should also be included in the story,” she said.
This article originally appeared on Investment Officer Belgium.
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