Préfon, the association behind France’s insurer-managed €16bn voluntary pension scheme for civil servants, wants to reorientate the regime’s investments to contribute to what in France is commonly known as the ‘energy transition’ and has highlighted Green bonds as one of the means by which to implement this shift.
It said it envisaged limiting the scheme’s investment in fossil-fuel industries and increasing investments that contribute to the energy transition.
It announced these aspirations as two priorities intended to align Préfon with France’s energy transition law, whose frequently cited article 173 requires institutional investors to report on their approach to environmental, social and governance (ESG) factors – and specifically climate risk.
The law also encourages investors to make carbon an integral part of their activities.
Préfon-Retraite is an optional, defined benefit, points-based pension scheme for civil servants that is managed by a pool of insurers: CNP Assurances, AXA, Groupama and Allianz.
Christian Carrega, chief executive at Préfon, said its primary focus was on influencing its asset managers, with the aim of decarbonising the regime’s portfolio and stepping up its contribution to the energy transition.
In a statement, the association refers to two main means of implementation, namely “reporting on green bonds” and a low-carbon strategy, involving investing in companies that contribute to the energy transition.
IPE requested further information about the association’s plans but did not hear back by the time of publication.
On its website, Préfon states that it has requested that reporting be set up to identify green bonds.
It says it will then request its equity investments to be actively managed by investing specifically in green portfolios, or by seeking out companies that contribute to the energy transition.
Préfon, despite its not being the direct manager of Préfon-Retraite assets, has the ambition to be “an engaged actor”, it says.
It first embarked on a socially responsible investment (SRI) strategy in 2007, when its preferences for equity investments were incorporated in a financial agreement.
Several steps have followed, from the regime’s insurers publishing information about the scheme’s “SRI intensity” for the first time in 2010 to the association last year signing the Global Investor Statement on Climate Change.
As at the end of December 2014, the Préfon-Retraite regime was primarily invested in fixed-rate bonds (73%), equities (15%), floating-rate and money-market bonds (10%) and real estate and infrastructure (2%).
Many of France’s large pension schemes are active supporters of the need to tackle climate risk.
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