opinion | Europe: for social taxonomy!

Today, responsible asset management cannot be considered without considering ESG issues. Among these environmental, social and governance criteria, the social aspect, like the other two, should be one of the priorities of investors today, while the Covid-19 pandemic highlights the fundamental nature of many professions. , especially in terms of wages.

The war in Ukraine also underscores the need for more ambitious social policies for the population affected by this conflict, particularly in France, where rising commodity and energy prices will strain household budgets. in trouble.

Social taxonomy

Thus, asset managers must integrate social and societal issues at the heart of issuers’ non-financial analyses. Investing in companies that weigh these concerns and pursuing the goal of a fairer society are not secondary issues, quite the opposite.

While an ecological taxonomy is being implemented on a European scale, we believe that the time has come to create a social taxonomy. A clearer normative framework, shared by all, is essential to direct financial flows to activities and companies that respect human rights and promote employment, well-being, health, diversity, prevention, accessibility or mobility for all.

An indication of respect for human rights

The intention to refer to the Paris Square in terms of climate transition (Perrier Report) should also be accompanied by initiatives to promote human rights and social progress. In parallel with efforts to address climate issues, social and societal issues must become the focus of asset managers’ concerns. In this context, there is currently no Greenfin-type label dedicated to social and public issues.

Investing in the social field is more about employment, wages or equality between men and women within each company. However, the application of the indicator of respect for human rights by the diversity of companies and employees would also be appropriate.

In addition to considering indicators that should help investors in their stock selection, every shareholder must play their part by committing to encourage companies to improve their social practices and their impact on society. The role of an asset manager should not be limited to investing in companies, but supporting them in their transformation.

For sustainable businesses

So it’s more about identifying opportunities, seeing society as a source of opportunities rather than a limitation. Indeed, companies that create jobs or invest in the well-being and health of their employees are also the companies that attract the best talent. A company plays a role in society that goes far beyond simple profit making.

Fair compensation of employees and shareholders, limiting compensation gaps between the highest and lowest earners within the company, and taking into account the well-being and health of all employees are important and obvious criteria of a company’s social ambition. In the long run, these are undoubtedly the most sustainable and financially successful companies.

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