Novethic-Labels

Novethic

For more than 10 years, Novethic has worked significantly to improve communication of sustainable investment (Socially Responsible Investment (SRI)) in France. Novethic is a subsidiary of the French state-owned financial institution, Caisse des Dépôts.

Since 2001, Novethic has been publishing reports on the French SRI market and trends analyses. In 2009, the Novethic label was awarded to sustainable investment funds for the first time, and, since 2013, other mutual funds, not exclusively distributed in France, are eligible for the label. From this year, a special Green Label for environmental-themed funds/green funds has also been established by Novethic.

A number of the funds awarded by Novethic are approved for sale on the German market and reported accordingly on the market platform www.sustainable-investment.org. Please note that the Sustainable Business Institute (SBI), as editor of the platform, is not responsible for the associated quality statement.

For the award of the label, Novethic once a year screens Environmental, Social and Governance (ESG) criteria of the funds. The explanations of the labels stated below have been provided by Novethic.

The awards for the current calendar year are issued each autumn. For the period October 2015 to September 2016, the updated list of funds can be found below.

 


The Novethic SRI Label

For more than 10 years, Novethic has worked significantly to improve communication of sustainable investment (Socially Responsible Investment (SRI)) in France. Novethic is a subsidiary of the French state-owned financial institution, Caisse des Dépôts.

The Novethic SRI Label is awarded to open-end funds (pooled funds) managed systematically in light of ESG criteria. The fund manager must detail the fund’s SRI management approach, report on its extra-financial characteristics and disclose a complete list of portfolio holdings.

The label does not cover funds’ financial characteristics; neither is it a guarantee of financial performance or an incentive to invest.

OBJECTIVE
The purpose of the Novethic SRI Label is to provide individual investors with a framework for Sustainable and Responsible Investment (SRI) products offered by investment managers. As the Label is awarded by an independent body, Novethic’s SRI Research Centre, investors can be sure that the process offers the greatest possible transparency about SRI products in which they might invest.

LABEL METHODOLOGY
1 - ESG screening: For a fund to be awarded the SRI Label, Environmental AND Social AND Governance issues must all be screened, even if the management approach does not emphasise all three areas. ESG screening must be applied to at least 90% of the portfolio in terms both of assets (excluding cash and community investing) and of holdings, spanning all asset classes. The SRI management approach is intended to encourage the best extra-financial practices among issuers. Therefore, ESG analysis must have a significant impact on investment decision.
2- Transparency: Investors must be able to understand the fund's ESG characteristics and their impact on the management approach. To meet this criterion, fund managers have to comply with the Eurosif Transparency Code. The code must be readily accessible on the fund's dedicated pages.
3 - Extra-financial reporting: The SRI fund's monthly or quarterly report must contain an additional section not included in non-SRI fund reporting. This part of the report contains information on the fund's ESG characteristics.
4 - Disclosure of all portfolio holdings: The full list of portfolio holdings must be disclosed on a half-yearly basis at least and be clear enough.
Find out more information on our website: www.novethic.com/srilabel

 


The Novethic Green Fund Label

The Novethic Green Fund Label is awarded to funds favouring activities with an environmental benefit. The funds are required to disclose a list of those activities. They also have to regularly publish a report on the environmental characteristics of the companies in their portfolio and detailed and comprehensive information on the make-up of the portfolio.
The Label does not address the financial characteristics of the fund. It is neither a guarantee of financial return nor an incitement to invest.

WHAT IS A GREEN FUND?
Environmental-theme funds, or green funds, are made up of stocks and bonds from companies with an environmental benefit, either because they work in an environmental activity or because they make a significant part of their revenue in an environmental activity.
Environmental products encompass sectors such as renewable energy production, improved natural resource management – for example, using water distribution and treatment systems – and energy efficiency.

OBJECTIVE
The Novethic Green Fund Label is awarded since 2013 to financial products focused on environmental activities. Awarded by Novethic’s SRI Research Centre, an expert body, independent from fund management companies, it provides investors with a guarantee of the fund’s environmental characteristics, its transparency and its contribution to sustainability.

LABEL METHODOLOGY
1 – Environmental objective: The fund’s investment strategy must explicitly include an environmental objective, such as financing the energy transition, fighting climate change or improving the management of natural resources, and describe the means being taken to achieve those ends.
2 – Theme-based and ESG analysis: At least 20% of the revenue of each company in the portfolio must be generated by products or services corresponding to the fund’s environmental theme. On average, over one-third of the revenue of the companies in the portfolio must be generated by environmental activities.
All the companies in the portfolio must be analysed in terms of their Environmental, Social and Governance (ESG) characteristics.
3 – Transparency: The investor must be able to understand the environmental objective of the fund and the way it chooses its portfolio companies. To that end, the manager is required to respect the AFG-FIR (Association Francaise de la Gestion financiere) or Eurosif Transparency Code, which must be clearly accessible on the fund management’s website, on the page concerning the fund. This document must include information on the activity sectors eligible for the investment as well as analysis of the companies’ ESG practices.
4 – Disclosure of all portfolio holdings: The full list of portfolio holdings must be published quarterly, with a description of the environmental activity of each company and the percentage of revenue generated by that activity.

Find out more information on our website: www.novethic.com


The following list of funds have the Novethic SRI Label 2015, and are profiled at www.sustainable-investment.org
 

Echiquier Major
Edmond de Rothschild Euro SRI
Erste Responsible Bond
Erste Responsible Bond Emerging Corporate
Erste Responsible Bond Euro-Corporate
Erste Responsible Stock Europe
Erste Responsible Stock Global
Euro Capital Durable
Fructifonds Valeurs Européennes
Generali IS European SRI Equity DX
NN (L) Invest Global Sustainable Equity
Kempen (Lux) Sustainable Smallcap Fund
Parvest Sustainable Bond Euro
Parvest Sustainable Bond Euro Corporate
Parvest Sustainable Equity Europe
Petercam Equities Europe Sustainable
Petercam L Bonds Emerging Markets Sustainable
Petercam L Bonds Government Sustainable
Pictet Emerging Markets Sustainable Equities
Pictet Funds (LUX) European Sustainable Equities
Sycomore Sélection Responsable
Triodos Sustainable Equity Fund
UBS (Lux) Equity Fund - Global Sustainable


The following list of funds have the Novethic Green Fund Label 2015, and are profiled at www.sustainable-investment.org

One Sustainable Fund Global Environment

Parvest Environmental Opportunities
Parvest Global Environment
Parvest Green Tigers