Europe’s largest asset manager Amundi has launched its Amundi Funds ESG Improvers range, an actively managed strategy open to institutional and retail investors that aims to capture environmental, social and governance (ESG)-related growth potential at an early stage.

Complementing the traditional ESG approach, which targets “ESG winners” according to their current ESG profile, this strategy takes a forward-looking approach to identify companies with promising ESG trajectories through a strategy based on three principles:

• Exclude companies that are not aligned with Amundi’s ESG framework
• Select those that are fundamentally attractive and show real and material ESG progress
• Actively engage with company management throughout the investment process to understand and positively impact the company’s financial and ESG credentials as a whole, and build a portfolio of concentrated, high-conviction holdings.

At this stage, the range offers two equity funds: Amundi Funds European Equity ESG Improvers and Pioneer US Equity ESG Improvers, benchmarked against the MSCI Europe Index and the S&P 500 Index respectively. Further funds will be added, including those with equity and fixed-income strategies.

“This is a new concept that offers investors an opportunity to be part of an actively managed portfolio of tomorrow’s ESG winners,” says Vincent Mortier, deputy chief investment officer at Amundi. “This fundamental bottom-up concept is designed to offer attractive risk-adjusted returns and to encourage companies to improve their ESG credentials.”

Amundi manages over €345 billion (US$415.4 billion) in responsible investment assets with over 10,000 issuers rated with respect to ESG criteria.