Recognizing the different levels of energy transition between emerging market and developed market companies, Amundi Asset Management is introducing a new rating system that assesses the companies’ efforts in decarbonizing their operations and the development of their sustainable activities.

Amundi’s energy transition rating system, which covers €400 billion (US$451.8 billion) of actively managed open funds, follows a best-in-class approach that measures the energy transition efforts of a particular company in relation to its universe of companies, instead of in relation to other companies in its sector or its geographic market. Based on this new rating system, Amundi’s portfolios will overweight companies that have made the most efforts in their energy transition.

Vincent Mortier, Amundi’s deputy group chief investment officer, says: “Our purpose is to notify companies which are in the right direction (in terms of energy transition), knowing the starting point. An emerging market company can be better rated in our system than a French company, for example. This is normal and something that we want to encourage. It’s a relative approach and it’s a trending approach. We are very suspicious of approaches that are absolute point in time and are embarking on geographical and sectoral biases and exclusions.”

The new rating system will be used in engaging with 1,000 additional companies to define credible strategies for reducing their greenhouse gas emissions, to vote at their annual general meetings, and for management remuneration packages to be linked to these strategies.

From 2022, Amundi says, it will be excluding from its portfolios companies that generate over 30% of their activity from unconventional oil and gas production.

The new rating system is part of Amundi’s ESG Action Plan for 2022-2025, which was launched on December 8 to achieve a faster path towards decarbonization. The new plan sets out objectives for both savings and investment solutions for clients and Amundi’s engagement policy with companies. It also includes policies for the remuneration of its senior executives and presents its climate strategy to its shareholders.

During the launch of the new plan, Amundi chief executive officer Valérie Baudson also reported the results the firm’s ESG action plan for 2018-2021. “This plan (2018-2021) is the reason why we are in a leading position in Europe with €800 billion in ESG assets under management, with more than 770 funds classified under Article 8 and Article 9, and with more than €25 billion inflows in ESG assets since the beginning of (2021)”.

The 2022-2025 ESG plan is based on three objectives: to ensure that its savings solutions offering goes even further in terms of responsible investment, to call on more companies to define credible alignment strategies for the net-zero 2050 objective, and to ensure the support of its employees and shareholders in its new ambitions.

Other objectives of the 2022-2025 ESG plans are:

• Offering open funds in all asset classes with a net-zero 2050 investment objective.
• Reaching €20 billion in assets in impact funds that will invest in companies that seek positive environmental or social performance, the impact of which will be measured and reported annually.
• Ensuring that 40% of its range of passive funds is made up of ESG funds.
• Developing Alto Sustainability, a technology analysis solution designed to support investors in decision-making regarding the environmental and social impact of their portfolio.