Environmental Finance's Sustainable Debt Awards 2024

Investor of the year, asset owner: AG2R La Mondiale

Winning this award two years in a row, AG2R La Mondiale has quadrupled the market value of investments in sustainable bonds since 2017, to €6 billion ($6.5 billion) at the end of last year.

The French insurance and pensions firm has progressively grown this total, from about €1.25 billion seven years ago, and increasingly diversified where it invests across the spectrum of sustainability-themed debt as it looks to combine social and environmental impact.

The biggest portion of these investments sit in green bonds, with €3.4 billion (61% of the total), followed by social bonds (€958 million, 16%), sustainable bonds (€925 million, 16%) and sustainability-linked bonds (€425 million, 7%).

Its portfolio comprises a diversified portfolio of 200 issuers of various nationalities, from France to Peru and Chile, and categories, spanning governments, corporates, financial institutions and local authorities and regional agencies – with the latter including local authorities at the heart of the Group's three main employment areas, in Ile-de-France, Nord-Pas-de-Calais, and Provence-Alpes-Côte-d'Azur.

AG2R says social bonds are growing in importance as it looks to fight poverty, help create 'inclusive and decent jobs', and promote health and wellbeing – expressed through contributions to UN Sustainable Development Goals.

Its portfolio of social bonds grew from €153 million in 2019 to €1 billion last year.

Social bonds constituted 16% of the group's sustainable bonds purchases between 2022 and 2023.

Meanwhile, AG2R has also rapidly grown its sustainability-linked bonds and loan portfolio, which it says shows its commitment to spurring positive change by French businesses.

The sustainability-linked component of the portfolio grew from zero in 2020, to €293 million in 2022 and €425 million in 2023.

This included an allocation in the sustainability-linked private bond placement by French dairy company Bel, which raised a total of €135 million. Under the terms of the deal, Bel committed to reduce its Scope 1 and 2 greenhouse gas emissions, develop carbon diagnostics and action plans with milk producers, and contribute to a healthier diet on its core brands aimed at children and families.

The investor has similarly grown its private debt exposure, via an investment programme in funds whose managers are selected based on their "ESG DNA". So far it has invested in 50 funds with a total assets under management (AUM) of €1.6 billion.

It says a growing portion of the financing granted by these funds, earmarked for energy transition and the financing of French small and medium-sized businesses, is subject to ESG covenants.

AG2R's sustainability objectives are not limited to one segment of its portfolio but span its €82.9 billion in AUM. AG2R categorises all its assets as Article 8 funds under the EU Sustainable Finance Disclosure Regulation.