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France's Préfon to collaborate with insurers on Green bonds, carbon

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Préfon, the association behind a voluntary additional pension scheme for French civil servants, wants to have a clearer overview of the Green bonds in its portfolio and has made this one of three projects for 2016.

Préfon-Retraite is an optional retirement regime for French civil servants that was created in 1967 by Préfon, a non-profit association itself established a few years before then.

It is an insurance-based scheme, with CNP Assurances, AXA, Groupama and Allianz contracted to deliver a guaranteed retirement income and the ones running the scheme’s €16bn in assets.

Christian Carrega, chief executive at Préfon, said the association could not impose an investment strategy on the insurers – “each one is the master of its investment choices” – and that it could only be involved as a collaborator.

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It believes, however, it has a fiduciary responsibility towards its members and that socially responsible investment (SRI) goes hand in hand with safeguarding investments over the longer term.

“Our involvement is a labour of conviction, of co-construction with the insurers,” said Carrega.

“The insurers are receptive to our thinking and already active themselves.”

Carrega, speaking to IPE after Préfon published the scheme’s performance in relation to pre-selected environmental, social and governance indicators, sketched out how the scheme intends to respond to requirements under France’s new energy transition law.

Asked to elaborate on those plans, he told IPE Préfon had three main projects for 2016 in an SRI context.

The first is to define shareholder voting guidelines, which it will submit to the insurers running the scheme, as they are the ones that vote.

The second is to work with the insurers to build a consolidated overview of the Préfon-Retraite regime’s Green bond investments.

“Each insurer has, to a more or less substantial degree, already invested in Green bonds, but we want to have a consolidated vision,” said Carrega. “This will help us to go further.”

In its announcement last week, the association referred to putting in place Green bond reporting.

It also wants to explore a low-carbon investment strategy.

Third, Préfon is targeting a common methodology for measuring and publishing the carbon emissions associated with the retirement regime’s investments.

This means coming to an agreement with the insurers about what is the best approach, with a first meeting due to be held this week, said Carrega.

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