Vigeo Eiris

Find out more about Responsible Investment (RI) and Corporate Social Responsibility (CSR).

The word “Vigeo” is derived from Latin and means: “being watchful and alert, keeping an eye open”. This Latin word has led to the English word “vigilance”.
“Eiris” comes from an acronym for “ethical investment research services” , but EIRIS evolved to offer much broader ESG research in addition to ethical screening.
In December 2015, Vigeo and EIRIS merged to create the Vigeo Eiris agency.
On 1 November 2010, the ISO (the International Organization for Standardization) published a ‎standard titled « Guidance for social responsibility ». As with Vigeo Eiris’ methodology EQUITICS, the ‎definition of social responsibility adopted in the standard rests on the notion of compliance with ‎international standards of behaviour. Vigeo Eiris’ analytical methods are, therefore, fully compatible ‎with the ISO 26000 standard, the recommendations of which have already been embedded into ‎our rating framework.‎
The GRI does not constitute a framework for social responsibility targets, but provides a guide for ‎organising information related to social responsibility. Vigeo Eiris supports this initiative for ‎harmonising SRI information and indicators and for structuring ESG reporting.‎‎
No. Vigeo Eiris has two separate and secure information systems at its disposal.‎ The teams dedicated to SRI research (Vigeo Eiris Rating) and to audits on social responsibility (Vigeo Eiris Enterprise) each have their own dedicated management and an autonomous organisation.
Less than 1% of the companies rated by Vigeo Eiris Rating are clients of Vigeo Eiris Enterprise
The decision has been made to permit companies to act as shareholders, and we take responsibility for that decision. This decision was motivated by our desire for a pluralistic body of shareholders – companies, trade unions, NGOs, traders, etc. – thus reflecting the pluralist expectations and interests of the agency.
By renewing the agreement in 2015 regarding the capital raised, our shareholders indicated their support for the creation of a global extra-financial analysis agency which aims to promote market standards through a production which combines professionalism, quality and R&D.

The theoretical potential for conflict of interests is not ignored.
In order to avoid conflict, Vigeo Eiris limits the participation of any shareholders to 25% and to 2% for corporates that are not financial actors. At present, the participation of each company that is not a financial actor is between 0.22% and 0.95% and the participation of each financial actor is between 0.04% and 10.01%.

The Executive Board is composed of three Boards (reflecting the capital structure of the shareholder stakeholder groups i.e. companies, financial actors, civil society), with three members each, regardless of the level of capital contribution, and 3 independent Directors. Each Board has been given 2 seats on the Executive Board. Shareholders that have at least 9% benefit from an additional seat on the Executive Board.

Finally, Vigeo Eiris has established a Scientific Board, composed of independent university academics and experts, contributing to the independence, professionalism and ethics of the company. The Scientific Board advises and guides the agency as regards its methodological approaches and ensures the respect of these measures in products created for clients.

The international institutions create norms in international law and recommendations for companies. Vigeo Eiris has established its reference values on the basis of these norms and recommendations.
Internally, staff, particularly the Information Department, are attentive to the evolution of the standards and norms created by international organisations, in order to adapt our frame of references if necessary.
Many international organisations (e.g. UN, ILT, OECD) have defined corporate standards in the form of recommendations, guiding principles, declarations, etc. which refer to universally recognised principles, such as the ban of both forced and child labour, the fight against discrimination and the promotion of equal opportunities.
Vigeo Eiris has based its reference framework on these principles.
They can be consulted here.
In 1987, the Bruntland Report, named after the President of the World Commission on Environment and Development (and who was also the Prime Minister of Norway) defined ’sustainable development’ as follows:
“development which meets the needs of the present without compromising the ability of future generations to meet their own needs, and especially the most basic needs of the world’s poor […].”
The expression ‘sustainable development’ was coined in 1992 at the Earth Summit in Rio.
‎RI (Responsible Investment) refers to a form of investment that takes into account Environmental, Social and Governance (ESG) criteria beyond traditional financial criteria. The investment universe is made up of companies that have identified the responsibility issues that concern them and work to manage the associated risks. RI is the application of the principles of sustainable development to investment activities.
Ethical investment draws on the philosophical, religious or moral beliefs of individual or ‎collective investors whose investment universes exclude those companies whose activity or ‎location run contrary to their beliefs. The most common form of ethical investment is reflected in ‎the selection of an investment universe that excludes companies involved, for example, in the ‎production of alcohol, tobacco, nuclear energy, gambling, sex industry, etc.
Nowadays, companies have to face issues such as the respect of human rights, human resources management, market behaviour, protection of the environment, corporate governance, and social commitment.
Such factors can alter a company’s reputation, development and its attractiveness in the market if they are not managed effectively.
Vigeo Eiris defines corporate social responsibility as a managerial commitment according to which the rights, interests and expectations of stakeholders are considered, and which aims at the continuous improvement of its performance and risk management.‎
Yes, by definition, since the UN’s Principles for Responsible Investment encourage investors to ‎display a commitment to acknowledge environmental, social and governance criteria.‎
Vigeo Eiris proposes a whole range of services and tools for the signatories of the PRI, enabling them to ‎define and deploy a process for responsible investment‎.
PRI website: unpri.org
Yes. The Ten Principles of the UN Global Impact select social responsibility targets that have been ‎recommended to companies, these targets are derived from conventions and international ‎standards, based on which Vigeo has built its benchmarking framework.‎
Vigeo Eiris Rating is member of the Global Compact and has developed a specific product for investors to identify ‎companies that comply or do not comply with the principles of the UN Global Impact.‎
A responsible investment policy can be implemented in a progressive and personalised ‎manner.‎
For example, it is possible to:
+ invest all or part of a portfolio in RI,
+ manage assets actively or passively,
+ use a formula (e.g. the Ethibel Range),
+ define a management approach based on proprietary criteria.
According a study realised by GSIA (Global Sustainable Investment Alliance), at end of 2014 the SRI global market was valued at $21.4 trillion dollars, which is an increase of 61% compared to 2012 (when the market was valued at $13.3 trillion).
According this same study, the biggest market remains Europe (63.7%) followed by the United States. Those two make the better progression (76%) between 2012 and 2014 against 55% in Europe.

icon-download-34x36 GSIA study

 

In addition, a growing number of international finance players adhere to the Responsible Investment Principles based on the view that environmental, social and governance risks are likely to influence the valorisation of their investments and that it is part of their fiduciary responsibility. This initiative, launched in 2006, has gained more than 1400 international signatories from more than 50 countries, representing $59 billion of assets.
PRI : unpri.org

icon-download-34x36 Brochure PRI

 

For more information, please consult:
+ GSIA : gsi-alliance.org
+ Novethic : novethic.fr
+ Eurosif : eurosif.org

Various studies have concluded that incorporating environmental, social and governance (ESG) ‎criteria into investment decisions does not negatively impact return on assets. This has also been ‎noted in the performance of the ASPI Eurozone Index in keeping with the performance of its Euro ‎Stoxx 300 reference index over the last few years.‎
In the long term, integrating ESG analytical elements into portfolio management should ‎theoretically allow for better risk-adjusted performance insofar as such integration gives a ‎better appreciation of the risks and opportunities associated with each investment.‎
All asset classes are covered by RI, i.e. listed equities, private equity, bonds and money market ‎instruments, real estate.‎‎
Information is gathered from various sources, i.e.:‎
+ from the company: in the first instance, analysts consult all publicly available documents ‎‎(annual reports, sustainable development reports, press releases) before systematically ‎contacting the company for further information,
+ from stakeholders: analysts rely on field actors and observers, such as trade ‎unions, NGOs and international organisations, to cross-check the information received ‎from the companies.

In its analysis process Vigeo Eiris does not include information from sources that cannot be traced or are given by non-identifiable stakeholders. As a consequence, non-referenced oral communications or anonymous letters sent to the agency are not taken into account.‎

Today different RI labels exist.
The first such label was created by Novethic in 2009. Until 2016, this label was given each year to more than a hundred European funds integrating ESG criteria in their financial management.
The ISR Novethic Label

A second label, the FNG label, was created in 2014. As a result of a strategic partnership between the GermanSIF and Novethic this label aims at promoting and rewarding funds that integrate ESG criteria in German-speaking countries. This label was given for the first time in 2015.
The FNG Label

The first public SRI label was created in France in 2016. Announced on September 28th , 2015 by the French Minister of Finance during the opening day of the French SRI Week, this label was officially implemented when the decree and its order were enacted on January 8, 2016.
The requirements of this label, as well as its allocation procedures, are defined by public authorities.
Read more about the Public ISR Label in France

To know more: novethic.fr