Sycomore Asset Management is offering its proprietary SRI tool with other asset managers as the need for action on climate and environmental issues intensify.
The Net Environmental Contribution (NEC) assesses over 1,300 companies and was developed as a result of cooperation with advisory firm Care & Consult and Quantis as well as BNP Paribas Securities Services that lasted for more than three years.
The indicator measures how sustainable a company’s business model is when it comes to global environment and energy transition.
The rating covers all the sectors and assigns -100% to the companies that are especially harmful for the environment and +100% to those firms that are especially climate and environment-friendly.
Jean-Guillaume Péladan, portfolio manager and head of Sycomore AM’s environmental strategy, outlines: “Our aim was to provide a simple answer to a complex question: ‘Does this business, company, fund or index contribute to the environmental and energy transition?’ We worked with a body of experts supervised by an independent strategic committee. As the first results were extremely encouraging, we continued our efforts and by 2018 had achieved a coherent system that has already been tested on over 1,300 stocks and bonds”.
Guillaume Neveux, CEO of I Care & Consult, says: “Since 2015, our clients’ interest in the NEC has grown considerably and we have applied this indicator across different asset classes: listed companies, private equity, infrastructure and real estate. Investors are interested in the wide-ranging nature of its sector applications, its ability to integrate the full range of environmental issues relevant to specific industries, and its discriminatory power. We firmly believe that the NEC Initiative will attract a large number of financial players keen to join us in developing this new standard”.
Christine Kolb, partner and founder of Sycomore AM adds: “The NEC began in 2015 with the launch of the Sycomore Eco Solutions fund. Since then, the NEC has become our compass as we navigate the environmental and energy transition and now covers all of our investments. In 2018, we believe that the NEC will be of greater use to our stakeholders and have a broader impact, particularly with our clients, if we move into an open-source system, sharing with an engaged and collaborative group”.