Our Sector Policies

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"We refer to sector policies rather than exclusion policies, as we support companies and help them stage their transformations: we hold constant dialogue with them to encourage them to enhance their practices: exclusion is the last resort in our view."

Joséphine CHEVALLIER, ESG Strategy Expert Leader

Ostrum Asset Management has rolled out a series of strict exclusion and sector policies to exclude all sectors and issuers that do not comply with certain fundamental responsibility standards from our investment universe. Somme policies apply to all our funds (weapons, blacklisted states), while others cover all our open-ended funds (coal, tobacco, worst offenders). We also offer tailored exclusion policies for our clients to support them in meeting their own individual goals.

Coal: an ambitious sector policy

In 2019, Ostrum AM had already halted investment in companies that derive more than 25% of their revenue streams from coal-fired energy vs. 50% previously. We rolled out additional criteria in 2020 and bolstered our engagement and dialogue efforts with companies:

  1. Companies that develop new coal capacity. This exclusion criterion also applies to coal infrastructure developers.
    Deadline for application: At January 1, 2021, for investments. With a six-month timescale for divesting holdings in companies concerned under normal market conditions.
  2. Companies that have not set out a coal phase-out policy in 2021. The phase-out plan must comply with the Paris agreement. We will undertake constant engagement efforts with companies, which were informed in 2020 of the timeframe for action via our individual engagement policy. We will monitor the credibility of the exit plans proposed and their funding.
    Deadline for application: At January 1, 2022: end to investments. With a six-month timeframe to run down existing positions under normal market conditions.
  3. Companies whose main business relies on coal. This criterion covers companies producing, transporting and selling coal derived using aggressive mountain top removal methods (MTR), used in the Appalachian Mountains in the United States.
  4. Companies that exceed the following thresholds as defined by the Global Coal Exit List (GCEL):
    20 millions metric tons of thermal coal production on an annual basis
    10 GW in installed capacity
    >30% coal share of power generation.
    Deadline for application: At January 1, 2021, for investments. With a six-month timeframe for divesting holdings under normal market conditions.

The quality of our updated coal policy was commented by Reclaim Finance.

Oil and gas

Ostrum AM will publish its oil and gas sector policy in early 2022. This policy will detail the complete exit of Ostrum AM from unconventional and/or controversial oil and gas exploration and production activities by 2030.
To discover now the main principles, read our news Ostrum AM announces key principles of an oil and gas sector policy to support the transition.

Controversial Weapons

Ostrum AM has excluded from its portfolios all companies involved in the production, use, stockpiling, sale and transfer of anti-personnel mines and cluster bombs, in line with the Ottawa Treaty and the Oslo Convention.

Tobacco

Since 2018, Ostrum AM has been committed to halting support for the tobacco sector, which has particularly negative social and environmental effects and runs contrary to the United Nations Sustainable Development Goals.

Blacklisted States

Ostrum AM strictly complies with current regulation and as such does not invest in countries under US or European embargo, or those which have been identified as failing to combat money laundering and terrorist financing by the Financial Action Task Force (FATF).

Worst Offenders

Ostrum AM excludes from the investment scope all companies – both listed and unlisted – that are proven to contravene a range of fundamental responsibility standards (United Nations Global Compact, OECD Guidelines), particularly as regards human rights, labor rights, environmental protection and business ethics.

Our CSR News