Réponse de l’AFG à la consultation sur la refonte du Label ISR

The AFG has responded to the consultation on the redesign of the ISR Label framework. The objective of the Label Committee is to propose a more demanding and transparent label while maintaining the general nature of the ISR Label and incorporating a climate focus.
Given the widespread use of the ISR Label, the AFG and its members considered it important to examine the proposed changes and their potential effects in detail. While the AFG supports the Label Committee’s efforts to modernize and enhance the ISR Label, as well as aligning the framework with the European framework, it expresses concerns regarding several points:
Firstly, the constraints related to the initial investment universe are deemed disproportionate, difficult to implement, and could restrict the management capacity of asset managers. Secondly, the list of exclusions, coupled with the systematic exclusion of issuers with significant climate-related issues, may not effectively support the transition.
Moreover, the imposition of a minimum weight of 20% for each of the E, S, and G pillars, without considering materiality matrices, could have unintended consequences, particularly for index-tracking strategies and smaller asset management firms relying on data providers.
The requirement for quantitative engagement in many cases is seen as an ineffective approach to efficient engagement. Additionally, the removal of the option to use the issuer-based calculation methodology would notably impact passive strategies, diversified active strategies, broad market equities, bonds, and would disadvantage small-cap companies.