The Covéa Finance ESG project focuses on promoting good governance practices within portfolio companies.
This value-creation exercise is already a well-established practice within the Covéa Finance investment process. As an active investor, the company meets its responsibilities as a shareholder to the best of its ability, aiming to create value over the long-term and to protect its clients interests by exercising its voting rights and participating in shareholder dialogue.
Covéa Finance adopted its voting policy in 2006, which is applied not only to its UCIs but also to its investments mandates. The policy notably specifies the process applied to voting at General Meetings and to shareholder dialogue, with the principle of aligning the interests of all stakeholders.
The objective is to contribute to improving governance practices in companies in which Covéa Finance decides to invest and thereby to defend the long-term interests of the beneficiaries represented by Covéa Finance.
The definition and development of the Covéa Finance voting policy incorporates recommendations issued by the AFG and AFEP-MEDEF in the area of corporate governance, while adapting them to the specific features of its model. The annual review exercise also refines the voting strategy in terms of the particular characteristics of the countries in which the companies are established.
The engagement policy is one of the main areas for the integration of ESG criteria in the investment process. Through the influence that Covéa Finance is able to exercise as an investor in companies, it strives to promote best practices in the field of ESG.
Covéa Finance’s engagement policy is broader in scope than shareholder dialogue with companies, and is broken down into its activities vis-à-vis distinct stakeholders:
Its shareholder client, the Covéa mutual insurance group (and consequently Covéa's clients and policy holders);
- The companies financed via debt or capital;
- Covéa Finance itself, via self-assessment of its own practices.
The results obtained in terms of transparency and the understanding of companies' ESG issues via the process of shareholder dialogue have confirmed Covéa Finance's decision to integrate this mechanism within the ESG criteria applied to the investment process.
Shareholder dialogue covers all forms of dialogue with companies (meetings, questionnaires, etc.) and consists of constructive and regular discussions with the companies in support of multiple objectives:
- To communicate in a transparent manner our expectations as a "responsible investor" regarding the resolutions presented at general meetings via pre-general meeting dialogue;
- To enhance transparency of the companies' ESG practices and commitments, and even modification of certain practices. This takes the form of regular shareholder dialogue throughout the year (outside the AGM process).
Accordingly, Covéa Finance aims to increase direct interaction with the companies on ESG issues by notifying them of its expectations and wishes regarding ESG issues and practices, via a process of constructive shareholder dialogue.