Ircantec has selected two new managers to run nearly €1.6bn in line with its climate and responsible investment goals.
According to a LinkedIn post published by the French public pension fund on Monday, Amundi has been awarded two mandates, whilst BNP Paribas Asset Management has secured a third.
Amundi will run nearly €800m in global equities and €400m in European equities, and BNP Paribas will also run €400m in European equities. All the mandates will last for seven years.
As a result, Janus Henderson and Mirova will lose their mandates – the two briefs have now been split into the three portfolios managed by Amundi and BNP Paribas.
The three portfolios will track a customised SRI index developed by MSCI, which requires their carbon footprints to be at least 50% lower than their benchmarks at all times, and to decarbonise by 7% annually.
To avoid those decarbonisation targets being achieved by simply cutting the most polluting companies from the portfolio – a practice known as ‘paper decarbonisation’, because it doesn’t result in any change to real-world emissions – Ircantec’s index is required to retain at least the same level of exposure to ‘high impact’ sectors as the benchmark.
The index also integrates Ircantec’s SRI Charter, which includes the exclusion of some issuers based on their thermal coal, oil or gas activities, and a requirement to engage those “most involved in the financing of coal and unconventional energies, so that they develop credible plans to phase out coal and non-conventional energies by 2030”.
In its LinkedIn post, Ircantec said its new managers “will have to follow [its] ambitious voting policy and conduct a regular dialogue with the companies in the portfolio on environmental, social and governance issues”.
“This award illustrates Ircantec’s desire to select management companies capable of combining index management, extra-financial requirements and support for economic, environmental and social transitions,” it added.
In August, Ircantec announced it was also on the hunt for three managers to run two €700m green bond funds, and one €300m social bond fund. It is yet to award those contracts, but they will be based on benchmarks from MSCI and Bloomberg.
