Nina Lagron, CFA is Head of Large Cap Equities and fund manager of La Française’s carbon investment strategy. Nina has over twenty years of experience in financial markets: after a career in Corporate Finance, she held several international portfolio manager positions across emerging and developing markets within Amundi, Gemway Assets and Fortis Investments. Nina holds a Master in Management and a postgraduate degree in Finance. Nina Lagron has dual citizenship (French and German) and is a CFA charterholder.
What challenges do you foresee for La Française for the coming months?
At the corporate level, La Française is implementing ESG analysis across a variety of asset classes, including stocks and real estate. In the coming months the challenge lies in adapting our ESG analysis to alternative asset classes, including for example debt.
What is your opinion on the integration of ESG criteria when investing?
Sustainable investment solutions are an effective means to influence capital allocation and stock valuations in favor of those companies transitioning to a low carbon economy. Our carbon investment strategy supports positive change and gives investors the opportunity to participate in the climate transition.
How do you establish an ESG portfolio? How do you evaluate companies and investors? and decision making?
With the expertise of our in-house extra-financial research center, Inflection Point by La Française, we analyze our investment universe according to ESG factors with a proprietary ESG scoring model. The bottom two deciles are automatically excluded from the investment universe. Thereafter, the extra-financial analysis team and our fund management team (financial analysis) work hand in hand and further screen companies within the universe. In doing so, we try to ascertain that the carbon emissions reduction programs put in place by companies are technically feasible, credible and fundable.
Our Carbon Investment strategy focuses on companies that provide solutions to address climate change, particularly companies that are on target to achieve significant tangible reductions in greenhouse gases or that focus on products or services for such reductions. We focus on transitioning companies with ESG momentum which might be linked to alpha generation.
What kind of company would you never invest in?
Though climate change is an issue for all sectors and activities, we will for example exclude coal manufacturers or even underweight certain energy utilities using fossil fuels. We also apply norm-based exclusions such as land and cluster mine manufacturers and more generally companies that are in violation of the principles of the UN Global Compact. Additionally, we systematically exclude companies scoring within the two lowest deciles of our proprietary ESG scoring model.
Is it difficult to find sustainable and profitable companies at the same time?
Actually, we believe that profitability and sustainability go hand in hand. Often CO2 emissions reduction programs lead to enhanced cost savings and hence higher margins, better reputation/brand image and hence better top lines and margins.
Often companies providing technology to drive more sustainable developments have stronger growth potential and positive profit margin perspectives.
Given the relative size of our investable universe, we are able to select companies with what we consider positive valuation perspectives. Additionally, keep in mind that our carbon investment strategy focuses on those companies that will facilitate the future transition for others or that are on a positive trend, which should be reflected positively on their future financial statements.
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