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22FOSTER A SUSTAINABLE FUTURE WITHIN OUR BUSINESSES

20 19 N FR

A signatory to the United Nations Principles for Responsible Investment (PRI) since 2010 and the Carbon Disclosure Project (CDP) since 2006, ODDO BHF Asset Management participates in several global initiatives and working groups in France and Germany to foster a sustainable investment approach.

ODDO BHF Asset Management s responsible investment approach is based on a long-term investment philosophy founded on its convictions. We ensure that the ESG criteria important to investors are integrated into the analysis and evaluation of issuers in the same ways as traditional financial criteria.

We thus fulfil our twofold aim of offering extensive and comprehensive analysis of long-term risks and opportunities as well as sustainable financial services.

ESG ANALYSIS AND PORTFOLIO CONSTRUCTION

Our methodology is based on an internal model of 42 criteria prioritising the key elements in the following three areas: environment (environmental risks and/or opportunities of products and services), social (human capital, quality of the management team) and governance (corporate governance). This ESG analysis draws on external data providers (Sustainalytics, Bloomberg, Factset), brokers selected for their special ESG expertise and regular meetings with issuers. This information also contributes to the in-depth internal analysis performed by our teams.

We also include controversial issues (industrial accidents, pollution, convictions for corruption, anti-competitive practices, product safety, supply chain management, etc.) in our analytical grid, primarily using input supplied by Sustainalytics. These aspects thus have a direct impact on the final ESG rating of each company.

The risks associated with implementing a company s long-term strategy affect the results of our ESG analysis and thus the construction of our portfolios (valuations of securities, weighting of positions, buy and sell discipline).

DIALOGUE WITH COMPANIES

If companies we are invested in perform very poorly on the most important ESG criteria, we invite them to meet with us. We seek a dialogue in order to work towards improvement rather than simply cutting the company out. The decision to engage in dialogue is taken by our ESG Committee, which meets every quarter and incorporates all areas of investment expertise (equities, bonds, loans, large and mid caps).

APPROACH AND METHODOLOGY