Between 1980 and 2018, the richest 1% have enjoyed twice as much income growth as the poorest 50%.
The growing inequalities and the social tensions deriving from them illustrate the prompt need of moving towards a fairer economic model. Major listed companies, without replacing governments can play a positive role and contribute to the reduction of inequalities in the countries where they operate through their policies.
Much like climate change, investors are showing a growing interest in social issues. Therefore, there is an increased investor demand for investment solutions that encourage the most virtuous companies by financing those that contribute to social progress in their country.
This strategy provides investors with a unique solution taking into account the financial risks associated with inequalities and making it possible to contribute to reducing them through their investments.
Social inequalities are produced and reproduced through the combination of several factors and they should be apprehended as a whole. We have therefore adopted a very exhaustive and pragmatic approach in defining them.
The investment universe is built on the basis of an « inequality scoring » developed internally. This unprecedented methodology of evaluation of companies and countries is based on specific quantitative and qualitative criteria grouped on 5 pillars: income & labour market, tax policy, health & education, diversity and finally human rights & basic needs.
5 generations, this is how long it takes a descendant of a poor family in the 24 countries of OECD to achieve the average national income
By applying the « inequality scoring » to the initial universe, the whole MSCI ACWI index, the number of stocks composing the thematic universe is reduced to approximately 1,200 (38% of the MSCI ACWI).
Additional filters are applied to businesses involved in major ESG controversies, as well as on any company that scores poorly on the overall ESG criteria and the underlying social criteria.