#14 T N E M E G A N A M T E S S A E R O M O C Y S Y B Y A W E L B I S N O P S E R E H T

GOOD JOB SYCOMORE-AM.COM EDITORIAL 01 | P.3 ThE TrANSITION IS uNdErwAy… buT MUSt BE fAIr Frédéric PonChon | Partner & Portfolio Manager

02 OPINION | P.4 lEt'S rESEt Jean-Guillaume PéLADAn | head of environmental Strategy

DISCOVERING SRI 03 | P.8 ASSESSINg A cOMpANy’S SOcIEtAl cONtrIBUtION TO EMplOyMENT Our METrIC: thE GOOD JOBS rAtING Spotlight on the methodology with Sara CARVALho De oLiVeiRA | eSG Analyst | P.9 Our pArTNEr: thE GOOD EcONOMy Discussion with Mark hePWoRTh | Co-founder of The Good economy | P.16

ANALYSIS 04 | P.23 INVESTMENT CASE: MAISONS DU MONDE Performance of the company on the 3 pillars of The Good Jobs Rating OVErVIEw Of qUAlIty JOBS INItIAtIvES Discussion with Sophie MouhieDDine | Chief human Resources officer of Maisons du Monde | P.30

05 THE FREEDOM TO ENGAGE | P.35 SrI By SycOMOrE

SYCOMORE ASSET MANAGEMENT 06 | P.41 AN ENGAGED ASSEt MANAGEr

OUR EDGE 07 | P.42 1 0

L A I R O T I thE trANSItION IS UNDErwAy… D E BUt MUSt BE fAIr

Frédéric PonChon | Partner & Portfolio Manager

The start of a new year feels like a good provided a rare, possibly unique, opportunity to align time to reassert one of our strong convictions: we the issues affecting the labour market with all of the believe it is essential to approach the sustainability of major disruptions that are shaping tomorrow’s world. our society from the perspective of three concomitant dimensions – environmental , economic and social . In this respect, the corporate world will naturally have a decisive impact. While the worst of the economic crisis Today, with growing inequalities creating unpreceden - is yet to come, companies will see their behaviour “ted systemic risk for our democracies, our institutions scrutinised by their stakeholders more than ever before. and our economies, social issues can no longer be Our role as a responsible investor is therefore to make the sole prerogative of the public sphere. Social a fair assessment of a company’s societal contribution , considerations must be made a priority for companies as an employer and a local economic player, so that we and investors who have the power and therefore the can provide better support as shareholders. Over the responsibility to take action. past few years, much of our work has focused on these considerations, which we are happy to put forward in In particular, we believe it is fundamental to recall the this new issue of our newsletter. role of employment as an essential lever for reducing inequalities and eradicating poverty . The challenge We wish you a pleasant read. is two-fold: how to share wealth in an economy that is more sustainable and aims for full and productive employment, and how to ensure inclusion through work, a fundamental condition for general well-being and social cohesion .

Generational shift, digital revolution, environmen - tal transition – employment is and will remain at the heart of many of the transformations already under way in the next decade. The shock caused by the health crisis and the massive recovery plans have Frédéric PO”NCHON

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m e e r h h c v s i s e i g o o a a a l x a a t i d i i h e e e i y s s s - r ------f t l l Our conviction as asset managers is that these transitions Doughnut economics can create jobs that cannot or will not be relocated, thereby facilitating the future employability of workers serving sus - Kate Raworth, in her book “Doughnut Economics 2”, calls tainable and inclusive missions and business models that for a brand-new economic mindset . She argues that the protect the biosphere, make sense to customers, deal with corpus of economic knowledge, as taught over the past suppliers as partners, favour long-term shareholders and fifty years, is ill-adapted to the Anthropocene 3, and sug - foster diversity and openness in governance. gests that we reset this obsolete way of thinking based on seven principles, starting with the goal. This implies The potential for future work is vast: education of chil - switching from GDP growth, “one of the most stupid dren and young adults, vocational training, personal goals ever invented by a civilisation 4” to steering the care services , care for the elderly, agroecology, “rur - economy within the doughnut’s safe and just space, bet - banisation” – or the return to rural areas, short circuits , ween the ecological ceiling (the planet’s boundaries) and repair services, function-driven economy, low-tech the limits of social justice, or the social foundation. solutions, relocated industrial activities, circular economy, smart grids, selective digitalisation …

As investors, our role is to identify this potential by making a clear distinction between window-dressing, technological illusions and cosmetic announce - ments, and genuine transformations and sustainable jobs . More than ever before, our stakeholder-driven analysis model, sPiCe , and our analysis of induced employment through the Good Jobs Rating will be of valuable help in 2021 as we conduct this deciphe - ring work with a view to achieving our mission. retHiNkiNG eCONOmiCs aND Our relatiONsHiP witH tHe liviNG wOrlD

These many transitions, which shape society and to - morrow’s economy, will not organise and spread themselves gently over time, enabling us to pause for breath between each change. To sail through these storms, we need to be very clear on the course we are heading for and how we shall navigate change. This will require resetting some of our secular software and mindsets: let’s use two examples, economics and our relationship with the living world.

2 “Doughnut economics”, March 2017 and https://www.oxfamfrance.org/actualite/la-theorie-du-donut-une-nouvelle-economie-est-possible 3 Period in the history of the earth that follows the holocene, used to refer to all the events dating from the commencement of significant human impact on earth's geology and ecosystems which have been powerful en - ough to constitute a new geological force. The term Anthropocene, the human era, was popularised at the end of 20th century by the weather scientist and atmospheric chemist Paul Josef Crutzen, winner of the nobel prize for Chemistry in 1995 and by the biologist, eugene Stoermer. The most recent period of the Anthropocene is sometimes referred to as the Great Acceleration due to the exponential growth rate of its indicators. 4 Donella Meadows (1941-2001), American scientist, co-author of the Club of Rome report “The limits to growth” in 1972. The Responsible Way - Good Job | 5 We are being blinded by the dominant model of infinite trictions! The ADEME – that has since become the Envi - growth in a finite planet, which is sending us straight into ronmental Transition Agency - regularly proclaims that the world of schizophrenia. steering the well-being of “the best type of waste is waste that is not produced ”. mankind while taking environmental constraints into Similarly, for the biosphere, the best consumption is account is a hugely disruptive theory but it also generates consumption that never happened”. The novelty, here, a major sense of relief! Educational and well-documented, is that more and more people and entities are showing this book offers conceptual avenues and operational awareness and have committed to reducing their solutions that can serve as a useful guide to the inclusive consumer habits. and environmental transition .

In this respect, the surge in the number of companies rethinking our relationship with the living world and investors announcing their commitment to this target by striving to achieve “net zero” emissions by 2030 or

Our relationship with Nature is also a problem. In his 2040 is highly revealing. Action plans are often limited book “Manières d’être vivant”, the philosopher Bap - or vague and compensations – which fail to cancel any - tiste Morizot exposed the findings of an American thing – are often put forward, but the positive momentum study revealing that children can name one thousand is undeniable! brand logos, but cannot recognise or name ten trees “ that grow in the areas where they live. And if all of these companies and investors believe, and rightly so, that this offers opportunities for growth, this Among others, this distressing observation reveals the trend – which is already visible - will accelerate the de - extent to which our long-standing Western unders - mise of the obsolete models it will eventually replace. tanding of nature as reified, a supply of free resources The mass grave of the old world will fill up with economic operating separately from humankind, is wrong and corpses, alongside the zombies of thermal coal and will hinder our ability to build tomorrow’s world . unconventional oil 8.

“Reconnecting with the living world” 5, of which we are a part – a world that offers a collective and supportive system that is a constant source of wonder and awe - is one of the keys to creating a humbler relations - hip 6 with the biosphere, that is more peaceful and importantly, more meaningful .

Some good news has nevertheless emerged from the health crisis. Achieving global carbon neutrality by 2050 is no longer seen as an impossible feat! To achieve the target mentioned in the IPCC’s 2018 special report on the 1.5-degree global warming scenario by 2100, our greenhouse gas emissions must be cut by 4% per year 7 before 2050 : in 2020, the drop in emissions should ex - ceed this target. This will come as no surprise: the recipe for success was frugality , sadly imposed by COVID res - Source : @theShiftPR0JeCT #decarbonizeurope 5 Title of the Socialter journal published in october 2020, https://www.socialter.fr/article/hors-serie-9-renouer-avec-le-vivant-avec-baptiste-morizot 6 Cf. “une espèce à part”, popular scientific TV programme broadcast by 31’, Arte, 2019, https://www.youtube.com/watch?v=stCxLxBMjYA 7 Cf. estimates by Jean-Marc Jancovici in november 2020: https://jancovici.com/publications-et-co/articles-de-presse/moins-de-degres-et-plus-dargent/ and “The 1.5°C scenarii forecast a drop in the energy intensity of GDP that could reach -5%/annum on average between 2020 and 2030”, The Shift Project, 2019, https://theshiftproject.org/wp-content/uploads/2019/11/etude-Sc%C3%A9narios-Afep_TSP-Rapport-final-FR.pdf 8 Mainly shale sands and shale oil. differentiation IN fINANCIAl The shock in 2020 accelerated the pace of history for MArkETS many individuals and companies. We experienced a global full-scale test on how our hyper-complex socio-technical system would react to a dual shock of economic decline and immobility . The outcome was a neutral or positive year for stock market indices, after a 43% drop in February and March. 2020 saw a but most of the social repercussions still lie ahead of major market rotation in favour of cyclical and value us and the loss of business will be lost for ever. It’s as stocks , but was also the year of tech , renewable if stock markets had already been inoculated with the energies and esG . Covid vaccine, while also being kept alive with cash from central banks … The task here will be to differentiate between robust movements and those feeding bubbles that could These few figures are indicative of how markets reac - eventually burst. Movements grounded in solid fun - ted in 2020. Between February 19th and March 16th, damentals - such as authentic esG , environmental the EuroStoxx index fell by 38% before rebounding themes, quality jobs, ageing population and the pene - by 48% 9, recovering 79% of its losses. The DAX wiped tration of technology in our daily lives - are likely to last. 100% of its losses and many indices rebounded even Others, including esG-washing , fake environmental higher, such as the NASDAQ which rallied 89% after solutions, technological miracles or the dominion of falling 30%; the Russell 2000 index rebounded 108% the GAFAM should be less long-lasting.

9 Maximum intraday variation and rebound as of 28/12/2020. Past performance is not a reliable indicator of future returns.

The Responsible Way - Good Job | 7 DISCOVERING SRI 03 O t u O O r u c

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thE GOOD JOBS rAtING A new data analytics product enabling investors to assess the societal contribution of companies as employers and creators of good job opportunities across and within countries. Good Job contribution that is both incLusive and sustainabLe is Good for empLoyees, Good for businesses and Good for society.

In partnership with the Good economy , social advi - The metric uses a three-dimensional model that sory firm specialising in impact measurement and brings together the quantity and quality of jobs and management, Sycomore AM has developed the their regional footprint. These three interdependent Good Jobs rating metric. dimensions determine the Good Jobs’ performance of the company from a social standpoint. The Good Jobs Rating assesses a company’s overall ability to create sustainable and quality job oppor - tunities, for all , and notably in areas – countries or re - gions – where employment is relatively scarce and therefore critical to ensure a sustainable and inclu - sive development.

Our aim is for this metric to be used by other asset ma - nagers and investors tracking, or planning to track, the performance of their investments against Sustainable Development Goal 8: “ Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all ”.

The Responsible Way - Good Job | 9 dOES ThE COMpANy CrEATE jObS IN SuffICIENT quantity ?

Sustainable levels of Job Quantity are needed to A company creates jobs directly through the growth achieve or maintain full-employment in all countries, of its workforce , and indirectly through its value chain . particularly in developing countries. Indeed, 600 A company’s employment growth also has induced ef - million new jobs need to be created by 2030, just to fects on job creation in other sectors of the economy keep pace with the growth of the working age po - through the consumer spending of its employees. pulation (SDG Compass). A combination of five metrics is used to assess a The Quantity dimension of the metric is therefore company’s direct and indirect job growth and its designed to assess both direct and indirect job comparative performance versus the average for the growth within the company under analysis. main sector(s) in which it operates.

grOwTh IN ThE COMpANy’S TOTAl wOrkfOrCE OVEr 3 yEArS direct Contribution to the global need for total job growth jOb grOwTh grOwTh IN ThE TOTAl wOrkfOrCE VErSuS SECTOr jOb grOwTh OVEr 3 yEArS Contribution to the global need for higher rates of job creation within sectors

INdIrECT EMplOyMENT Contribution to the global need for indirect job growth through supply chains

AVErAgE EArNINgS indirect Contribution to indirect job growth in sectors that potentially benefit from the spending power of jOb grOwTh the company’s employees (induced jobs) NuMbEr Of EMplOyEES Contribution to indirect job growth potentially arising from the size of the company’s workforce (induced jobs) dOES ThE COMpANy CrEATE quaLity jObS, fOr All?

By itself, higher Job Quantity is not a sufficient condi - 60% of all jobs (The working poor or how a job is no tion for sustainable and inclusive development – it guarantee of decent living conditions, International must be accompanied by higher job Quality measu - Labour Organisation, April 2019). red by earnings quality and job security . To capture the social quality of a company’s jobs, we Note the global working poverty rate at nearly 10% use a combination of 10 sector-based figures as we is twice the global unemployment rate. In low in - lack any comparable indicators from the companies, come countries, the working poverty rate is 40% and in order to assess five selected indicators : low productivity, informal employment accounts for

Prise isolément, une quantité plus importante d’em - plois ne suffit pas à assurer un développement éco - EArNINgS fAIrNESnS omique Comparison of the level of skills with the share of ‘low-paid’ workers EArNINgS fairness EArNINgS dISTrIbuTION Equitable wage structure for skilled and unskilled positions

rISk Of uNEMplOyMENT Share of jobs vulnerable to redundancy jOb security pErMANENT EMplOyEES Share of workers on permanent contracts

OCCupATIONAl MObIlITy empLoyabiLity Share of training-intensive occupations enabling work progression

The Responsible Way - Good Job | 11 fEMAlE EMplOyMENT Access to all job opportunities for women Gender EQuAlITy fEMAlE MANAgEMENT Access to management-level job opportunities for women

yOuTh EMplOyMENT Access to job opportunities for school leavers and graduates INCluSION lOw SkIllEd EMplOyMENT Of marGinaLised Access to job opportunities for workers with low qualifications WorKers OldEr wOrkErS Access to job opportunities for older workers dOES ThE COMpANy CrEATE jObS Where they are most needed ?

A company’s Job Geography is important to deter - The second aspect aims to assess the company’s re - mining its social contribution . Good job creation has gional employment footprint . This has some merit a bigger impact on productivity and well-being in given national and regional authorities value corporate low-wage countries and regions where unemployment head offices for their range of high-quality jobs and and working poverty are greater. outsourcing activities, as well as their links to community activities and policy-makers. The Job Geography dimension covers two aspects of the territorial footprint of companies: In order to assess the level of societal need for jobs across geographies, we combine the analysis of ten • their national locations compared to the societal metrics grouped under three indicators: need for jobs at the national level; • their headquarters locations compared to the societal need for jobs at regional level.

NON-AgrICulTurAl EMplOyMENT Countries needing job creation in higher productivity industries and services

CONdITIONS fOr ECONOMIC ACTIVITy fuLL-empLoyment Countries/regions challenged by low rates of labour market participation (uNEMplOyMENT, rATE Of ECONOMIC ACTIVITy, uNEMplOyMENT INfOrMAl EMplOyMENT Countries/regions challenged by high unemployment and ‘worklessness’ problems ANd jOb MArkET fOr yOuNg wOrkErS) NEETS (yOuNg pEOplE NEIThEr IN EMplOyMENT NOr IN EduCATION ANd TrAININg) regions where a high proportion of young people face poor work futures due to a lack of engagement in education, training and work

The Responsible Way - Good Job | 13 EArNINgS Countries/regions challenged by low average earnings

CONdITIONS fOr CrEA - wOrkINg pOVErTy TINg incLusive Jobs Countries challenged by severe working poverty problems (wOrkINg pOVErTy, INCOME INEQuAlITy INCOME INEQuAlITy Countries challenged by high levels of income inequality ANd lOw INCOME) dISpOSAblE INCOME regions challenged by low average incomes

grOwTh IN lAbOur prOduCTIVITy sustainabLe Job Countries/regions challenged by low labour productivity growth that undermines the sustainable GroWth growth of earnings and material living standards for all (bASEd ON prOduCTIVITy Of lAbOur grOwTh IN OuTpuT pEr CApITA ANd ECONOMIC grOwTh) Countries/regions challenged by unbalanced economic growth that leads to social and regional inequalities in good job creation societaL needs for Jobs across gEOgrAphIES

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The Responsible Way - Good Job | 15 INTErVIEw

Mark HepwortH Director of Research and Policy and Co-Founder of The Good economy, a social advisor and impact measurement and management specialist INTErVIEw

MARK, FIVE YEARS AGO YOU CO-FOUNDED Sarah and I met when she came to me as Deputy WITH SARAH FOSTER THE GOOD ECONOMY, CEO of big issue invest , the social investment arm of A LEADING SOCIAL ADVISORY FIRM SPECIALISING The Big Issue 1. I was running the local Futures Group , IN IMPACT MEASUREMENT AND MANAGEMENT. an analytics firm which aim was to demonstrate the WHAT IS YOUR BACKGROUND AND WHAT LED interrelationship at a local level between economic, YOU TO CREATE THE GOOD ECONOMY? social and environmental conditions.

I would describe myself as a multidisciplinary eco - nomist and entrepreneur . My experiences span across academia, public policy and business consultancy. With a degree in economics, a doctorate hOw TO MAkE INVESTMENT in economic geography, and years acting as an expert ANd fINANCIAl INNOVATION adviser to the UN Economic Council, the OECD and the European Commission, I’ve specialised in corporate A drIVEr Of pOSITIVE SOCIAl geography , with the assumption that companies are ANd ECONOMIC dEVElOpMENT? key players in economic development in all geographic areas of the world.

Sarah started her career at the World Bank where she What brought Sarah and I together was a joint interest worked for ten years designing large-scale poverty in how to make investment and financial innovation alleviation investment projects in Africa, South Asia a force for good – i.e. a driver of positive social and and the Balkans, with a focus on microfinance and economic development, and the willingness to build community-led development as part of the Bosnia- a mission-driven business which reflected our strong Herzegovina post-war reconstruction programme. social values.

THE GOOD ECONOMY’S MISSION IS TO ENHANCE THE CONTRIBUTION OF FINANCE AND BUSINESS TO INCLUSIVE AND SUSTAINABLE DEVELOPMENT. HOW DO YOU DEFINE INCLUSIVE AND SUSTAINABLE DEVELOPMENT?

What we call “the Good Economy” – “ an economy that works for everyone ” – refers to a big enough concept to include inclusive, balanced and sustainable growth and development. We were inspired by the ideas of J.K. Galbraith and E. Phelps amongst others, the first one describing the good economy in his book “The Good Society” as an economy where everybody who wants a job gets one, the second one demonstrating that what matters at work also matters at home.

Sarah ForSter 1 From an award-winning magazine offering employment opportunities to people in poverty, a Ceo and Co-Founder of The Good economy multi-million pound social investment business supporting enterprise to drive social change, to a charity Foundation supporting vendors to rebuild their own pathways to a better future and a shop curating social enterprise products.

The Responsible Way - Good Job | 17 INTErVIEw

Four pillars hold up the Good economy, not simply as load-bearers but as traction engines for powering its realisation:

THE GOOD ECONOMY

l t s s n n a s m n i b a o s e e i c i o s m n J o i

m e m u S s d p a h H u o o n o l B o y C e v G D e D

Decent Living Standard s Inclusive Investing Uni versal Se rvices Democ racy & Communit y Full-employment and A backbone of SMEs Equal acce ss to high A truly rep resentati ve jobs that pay decent characterised by high quality public se rvices so democ racy sho red up wages and fulfil career business dynamism in that everyon e, ev erywhere by high l evels of social aspi rations, with ev eryone terms of sustainable can enj oy a high mobility and vib rant able to enjoy a high gro wth and social impact, standa rd of pe rsonal and civic communities. quality of wor k-life. thriving on an economic social well-being. landscape rich in finance, skill s, infrastructu re and accessible mar ket opportunities. INTErVIEw

analytics for socially responsible investors looking to ThErE NEEdS assess the contribution of company employment to TO bE CONSENSuS wider society.

ANd COllAbOrATION We also collaborate with governments – we were for bETwEEN buSINESS, example commissioned by the Scottish Government INVESTOrS, to undertake a report that considers the needs of the private sector and the role of business in driving gOVErNMENTS inclusive jobs growth in regions – as well as interna - ANd COMMuNITIES tional business and social purpose organisations such as the ILO and the GIIN: we support them in TO TurN ThE IdEA Of developing consistent and standardised definitions, A gOOd ECONOMy methods and tools in order to evaluate good jobs, INTO rEAlITy. this very slippery concept.

This implies the creation of a dashboard showing direction and measurable progress, and of course an inclusive investment action plan . the sustainability reporting standard Our team seeks to develop this roadmap with like- for social housing minded partners, including businesses, policy makers, service providers, investors, practitioners, independent Housing associations’ social impact is significant, experts and civil society champions. and the need to scale up the supply of genuinely affordable homes is clear. Even if investor interest THROUGH WHAT KIND OF PROJECTS is strong and growing, there is an increasing AND COLLABORATIONS DO YOU PURSUE need for the UK social housing sector to clearly THIS MISSION? highlight and report on its strong ESG performance.

The Good Economy acts as a social advisor and impact The Good Economy participated in creating an ESG measurement and management specialist, addressing disclosure framework, establishing a transparent, very diverse challenges both in private and public consistent, and comparable set of ESG criteria, markets. We work with investors across the spectrum which can be adopted by key stakeholders, in - of capital – from socially responsible asset managers cluding lenders, investors, regulatory bodies and to specialist impact investors , across all asset classes government. – debt, equity, public equities, fixed income and real estate – and across all sectors and geographies.

Focus areas of work include impact services for inves - tors in affordable housing and smes, as well as data

The Responsible Way - Good Job | 19 INTErVIEw

HOW DO YOU SELECT YOUR CLIENTS AND PARTNERS?

Our experience of working with investors shows that The Good Jobs Rating is a good example of how in - the investment world is a very multi-disciplinary vestors can use spatial analytics to map and measure scene. The way we discuss and build partnerships is corporate performance on a global level. We are not necessarily routed in a particular discipline. now complementing this top-down spatial analysis with a bottom-up place-based approach – we are At the beginning of each of our partnerships, there is drilling down to the real communities where companies people talking the same “language” . This is essential actually operate and connect with communities as for us. That’s what happened when we met Bertille employers and local economic actors. and the Sycomore ESG team! In the first instance, we look at the integrity of the investment team. What we want to know is whether that investment team shares our values and wants to do the same things we do. The quality and the finer point of our analysis is also the result of very close interactions with our partners.

THE GOOD ECONOMY AND SYCOMORE AM DEVELOPED THE GOOD JOBS RATING. COULD YOU TELL US MORE ABOUT THE ORIGIN AND THE OUTCOME OF THIS PARTNERSHIP? Place-based impact investing ...

The work we have done with Sycomore AM is a flagship ... refers to investments made with the intention project of ours, reflecting the very deep model of what to yield both financial and social and/or environ - we wanted to achieve when we started this company: mental returns. the focus is on addressing the consider both the intrinseque value of a good job – what needs of specific places and specific populations you’re paid, how productive you are – and its extrinseque to enhance local economic resilience, shared value: what it means for society . prosperity and sustainable development.

Our two-year collaboration with Sycomore AM led to the We launched in 2020 a pioneering programme creation of a powerful new data analytics tool, giving a of work on place-based impact investment as a societal perspective on companies as em ployers , model for mobilising institutional capital to and the ideal screening and analysis solution to meet the needs of ‘left behind communities’ . track investment performance against Sustainable We are looking at how UK local government Development Goal 8. pension funds – valued at over £300 billion – could be invested in their ‘own backyards’ – rather than Testing this innovative research solution on a real-world in global equities and foreign hedge funds. This portfolio with a leading responsible investor that is a very important project with a lot of political and focuses on human capital and good jobs has enhanced market interest. It is relevant to all European the Rating’s functionality and relevance to all investor countries where social, both local and regional, users . inequalities are a serious problem. INTErVIEw

HOW CAN INVESTORS CONTRIBUTE TO SDG 8 “PROMOTE SUSTAINED, INCLUSIVE AND SUSTAINABLE ECONOMIC GROWTH, FULL AND PRODUCTIVE EMPLOYMENT AND DECENT WORK FOR ALL”? A lOT Of COMpANIES The widespread adoption of the UN Sustainable De - velopment Goals (SDGs) by corporates and inves - dON’T lOOk tors has fuelled the need for appropriate SDG IN ThE MIrrOr. analytics tools and experts to capture their impact. ThE rOlE Of SDG 8 is particularly important because of its strong rESpONSIblE INVESTOrS inter-linkages with other SDGs which are central to the sustainability of economies and markets and the long- SuCh AS SyCOMOrE AM term financial performance of equity investments. the IS TO prOVIdE pivotal of many sDGs is good jobs as they drive eco - nomic growth: a good job is productive in a human ThE MIrrOr. capital sense but also creates a bigger multiplier in terms of income .

Your role as a responsible investment manager is es - sential. First, by deciding to take sustainability consi - derations into account when assessing whether to invest in a company, to engage with companies to try to improve their sustainability performance, using your voting rights to influence behaviour where ne - cessary. In this way, investment managers as Syco - more can make a positive difference, by refining how existing capital flows can influence positive change .

But responsible investors also contribute to awareness as they create a mirror and a reflection for businesses and other investors . A lot of your work at Sycomore and of our work at The Good Economy has to do with making people, companies and investors more aware of what their impact really is. That is not something companies were used to report on because most impacts were seen as external effects of their core operations. When engaging with companies, you can strive not to make these impacts residual but a core of what compa - nies do which needs to be measured, helping them have the right blend of knowledge, tools and data for managing, measuring and communicating their impact.

The Responsible Way - Good Job | 21 INTErVIEw

WHAT CAN EXPLAIN THE LOWER DEVELOPMENT OF SOCIAL AND SOCIETAL DIMENSIONS IN SRI AND IMPACT INVESTING? WHAT COULD BE THE CATALYST FOR RAISING AWARENESS AND DIRECTING INVESTMENTS TOWARDS THESE DIMENSIONS?

We are beginning to see investors talk about climate change and inequality in the same breath . This could boost investor interest in the social dimension wE All of SRI and impact investing. Our business is currently hAVE bEEN ASlEEp seeing a massive urge of interest in social dimen - fOr A whIlE. sions , both from public and private actors. What COVID 19 has demonstrated is that we should all be I dO bElIEVE interested in people’s wellbeing at least because ThAT IT IS Our jOb companies require healthy individuals’ spending money! – SyCOMOrE AM, ThE gOOd ECONOMy Climate change and inequality should be seen as two sides of the same coin . We now need to ad dress ANd lIkE-MINdEd ACTOrS, both the challenge of resilience and sustainability and TO SAy TO COMpANIES the one of developing investment strategies that can meet this challenge. “yOu CAN hAVE A pOSITIVE IMpACT when it comes to long term investment, people’s wellbeing is crucial . We are already witnessing ON SOCIETy, governments and pension funds moving in that ANd wE CAN direction. Actually, more and more investors want hElp yOu to have an impact. buIld brIdgES”. What has changed everybody’s mind? Climate change! It has threatened both businesses and investors on its social and societal consequences: if you’re interested in protecting assets over the long term, you have got to be worried about climate change. COVID 19 is definitely a catalyst for the consideration of social factors because it has exposed the vulnerability of the system and the possibility of this type of global crisis increasingly happening . ANALYSIS 04 S h u E b A - d S Q E C u T A O r r T

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2 3 Maisons du Monde is a French furniture and home Maisons du Monde manufactures around 6% of its decor company with sales of 1.23 billion euros for furniture internally in its in-house manufacturing the year ended on December 31 st 2019, of which facility located in Vietnam, in order to guarantee 45% abroad. the production quality of the more complex items and to keep a closer control on the manufacturing The company owns: process. Employees in Vietnam are included in Maisons du Monde’s global workforce as the faci - • 376 stores across europe (with 227 in France, and lity is a fully-owned subsidiary; Vietnam employees others located in Italy, Spain, Belgium, Luxembourg, account for around 12% of the group’s overall Germany, Switzerland and Portugal). staff numbers .

• 18 stores in the united states (after purchasing The rest of the Group’s furniture is sourced from majority stakes in Modani during 2018). 1,480 third-party suppliers , located principally in China, India, Indonesia and Vietnam. The group two thirds of the staff in europe and the united has developed trusted and long-term partnerships states work in-store , throughout the Maisons du with around forty suppliers . Monde or Modani store network. Finally, Maisons du Monde operates 11 warehouses • The group operates an on-line sales platform in facilities located in the port area of Marseille-Fos in the countries where it has a store presence , as well the south of France. as in the Netherlands , Austria and the United Kingdom. This platform accounted for 25% of the group’s sales in 2019.

breaKdoWn of WorKforce by activity breaKdoWn of WorKforce by GeoGraphic area lOgISTICS rhINOV ASIA (VIETNAM) NOrTh AMErICA 8% 1% 12% 2% MANufACTurINg fACIlITy EurOpE 12% (EXCl. frANCE) hEAd OffICE NETwOrk 28% 12% 67% frANCE 58% aNalysis OF tHe COmPaNy PerFOrmaNCe ON Maisons du Monde has a high regional score with tHe 3 DimeNsiONs OF tHe GOOD JObs ratiNG its head office located in a region where levels of disposable income and output growth is lower than maisons du monde’s Good Jobs rating scores at the French national average. The Global score, 64/100 at the end of 2019, with a good performance which is proportionate to the breakdown of staff on job quantity (74/100): the company has seen numbers per country, reflects the group’s footprint strong employment growth , exceeding that of the in countries where societal employment needs are retail sector. However, indirect and induced job generally lower than the global average, according growth potential is low. to our analysis.

The company scores well on Job Quality & inclusion as well, due to the high level of inclusion of young people (16-24 year olds) in the retail sector.

Good Jobs ratinG performance (as of 12/2019)

The Good Jobs Rating is based on an equally weighted average of the scores across the three dimensions of JOB QUALITY , JOB QUANTITY and JOB GEOGRAPHY .

The Responsible Way - Good Job | 25 JOB QUANTITY 74 / 100

The Job Quantity dimension assesses the company’s Growth rates are scored as follows: rate over 7.5% direct job growth and its comparative performance per year scores 100 ; rate of -2.5% or below scores 0. versus the main sector in which it operates. The sector benchmark score is given 0 when the growth is delivered through significant Merger and In order to quantify a company’s ability to create Acquisition activity. indirect jobs, we use indicators that estimate the number of jobs created throughout its supply chain . The company’s sector average earnings to - gether with the size of the company’s workforce INDIRECT EMPLOYMENT are used as determinants of potential spending power and its induced effects on job creation. 23 / 100

The positive trend in job growth recorded in recent years explains the high score of Maisons du Monde GLobaL empLoyment scaLe on direct employment. VAluE Conversely, the relatively small size of the company 8,628 EMplOyEES IN 2019 SCOrE as well as the sector-based employment multiplier 35 / 100 and average earnings account for the company’s low score on indirect employment. sector-based empLoyment muLtipLier VAluE DIRECT EMPLOYMENT 1.21 (Eu SECTOr MEdIAN 1.75) SCOrE 100 / 100 pErfOrMANCE Of INduSTry 19 / 100 bottom quintiLe annuaLised Job creation (2016-2019)

8,50% sector-based averaGe earninGs E

r VAluE O

C €22,324 (Eu SECTOr AVErAgE €33,545) S SCOrE 0,24 % pErfOrMANCE Of INduSTry 17 / 100 maisons du monde SECTOr bottom quintiLe

Companies employing 25,000 people or more score WorKforce GroWth 100 for Global Employment Scale. Sector-based data converts standardised metric Z-scores into 0-100 2016 2017 2018 2019 scores using a linear function. 6 754 7 279 7 648 8 628 JOB QUALITY 67 / 100

The Job Quality and Inclusion dimension assesses the social quality of job creation . Due to the lack of direct company data, this is measured indirectly by INdICATOrS SECTOr QuINTIlE how the company’s sector performs on the five aspects ANd METrICS pErfOrMANCE of social quality: earnings fairness, job security, training - led work progression, gender equality in employment and higher management jobs, and accessibility to earninGs fairness marginalised workers (younger, older and low-skilled workers). • EArNINgS fAIrNESS averaGe SCOrE quintiLe 38 / 100 The table also shows Maisons du Monde’s scores • EArNINgS dISTrIbuTION based on the performance of the retail sector relative to the other 25 sectors of the EU economy, as indicated Job security by its quintile position. beLoW • rISk Of uNEMplOyMENT SCOrE averaGe 40 / 100 EArNINgS fAIrNESS • pErMANENT EMplOyEES quintiLe OldEr wOrkErS EArNINgS dISTrIbuTION empLoyabiLity lOw rISk Of averaGe SCOrE SkIllEd • OCCupATIONAl MObIlITy EMplOyMENT uNEMplOyMENT quintiLe 42 / 100

Gender equaLity yOuTh pErMANENT EMplOyMENT EMplOyEES • fEMAlE EMplOyMENT beLoW SCOrE • fEMAlE averaGe fEMAlE OCCupATIONAl 53 / 100 MANAgEMENT quintiLe MANAgEMENT MObIlITy dIffErENTIAl dIffErENTIAl fEMAlE EMplOyMENT incLusion of marGinaLised Groups

• yOuTh EMplOyMENT retail sector average • lOw-SkIllEd top SCOrE Eu sector average (a sector performs better than average EMplOyMENT quintiLe 84 / 100 if outside of this line) • OldEr wOrkErS

The Responsible Way - Good Job | 27 JOB GEOGRAPHY 52 / 100

The Job Geographical dimension assesses two as - GLOBAL FOOTPRINT SCORE pects of the geographical distribution of the com - pany’s direct employment or workforce. 46 / 100

Firstly, it assesses the company’s national locations Overall, the company scores 46/100 given its loca - compared to the country’s societal need for jobs . tions in areas where societal needs for jobs is relati - Good job creation has a proportionately greater im - vely low by global standards. pact in low-income countries and regions where unemployment and working poverty problems are greater. NuMbEr Of EMplOyEES Secondly, is assesses the company’s headquarters lo - 0 1,000 2,000 3,000 4,000 5,000 cation from a regional employment perspective. france Headquarters location are valued for their range of VIETNAM high-quality jobs and outsourcing activities, as well as ITAly their links to community activities and policy-makers. SpAIN Maisons du Monde’s corporate operations and stores bElgIuM are concentrated mainly in France and the rest of gErMANy TOTAl MdM grOup : 8,628 europe , while the company’s direct manufacturing SwITzErlANd employees are employed at its plant in Vietnam. uNITEd STATES uk luXEMbOurg pOrTugAl SOCIETAl NEEdS fOr jObS: lOw bElOw AVErAgE AVErAgE AbOVE hIgh NO COuNTry AVErAgE SCOrE

GLobaL societaL needs for Jobs across GeoGraphies

SMAll STrONg jOb jOb NEEd NEEd REGIONAL FOOTPRINT SCORE MEAN EArNINgS 70 / 100 grOwTh INCOME IN OuTpuT INEQuAlITy Maisons du Monde has a higher score on its pEr CApITA regional footprint (70/100), due to the loca - tion of its headquarters in Nantes – thereby contributing to the creation of job opportuni - ties, including management positions, outside grOwTh France’s leading Paris city-region economy. IN lAbOur NEET s prOduCTIVITy (young people neither A score of 50 or above indicates the region is in employment nor in within the top 70% of strong job need in the EU education and Training) – regional job need is measured relatively using both the national and EU context. uNEMplOyMENT EMplOyMENT rATE rATE

Nantes Eu average (a region has an above average need if outside of this line)

reGionaL societaL needs for Jobs across GeoGraphies

SMAll STrONg jOb jOb NEEd NEEd

MAISONS du MONdE’S hEAd OffICE

The Responsible Way - Good Job | 29 INTErVIEw

Sophie MouHieddine Chief human Resources officer of Maisons du Monde

sophie mouhieddine joined Maisons du Monde as Chief Human Resources Officer in January 2020. Since, she has worked on developing the employer brand and its attractiveness, both in France and abroad, thanks to a roadmap reflecting the company’s proactive and ambitious approach to corporate societal responsibility. Sophie will discuss the quality of employment at Maisons du Monde and review the major HR initiatives that are supporting the growth of the company. INTErVIEw

MAISONS DU MONDE HAS SEEN ITS WORKFORCE DO ANY SPECIFIC POLICIES GUIDE YOUR DECI - GROW CONSIDERABLY OVER THE PAST FEW YEARS. SIONS IN TERMS OF JOB QUALITY AND INCLUSION? CAN YOU TELL US MORE ABOUT YOUR BUSINESS WHAT IMPROVEMENTS HAVE YOU OBSERVED IN DEVELOPMENT STRATEGY? RECENT YEARS?

Yes, our staff numbers have grown substantially, at a Inclusion, fairness and attractive career prospects are is - pace of around 30% , since 2016. At the time, Maisons sues of fundamental importance for Maisons du Monde du Monde employed 6,800 people. We now employ and they lie at the heart of our particularly ambitious about 8,700 people. human resources policy. We have approached these challenges with enthusiasm and humility . Though we Our ability to create new jobs is a direct upshot of the still have a long road ahead of us, the improvements dynamic management of our network of stores . From that have already been made are very encouraging. 288 stores at the end of 2016, we ran 376 at the end of 2019. The launch of new selling points is also an in - Here are a few figures of which we are proud. As of tegral part of our international expansion strategy. today, 75% of our staff are employed based on a permanent contract. Almost 25% of the staff em - Our teams working in the Nantes headquarters and the ployed by Maisons du Monde are under 25 years of digital team located in Paris are also being strengthe - age . women account for 66% of our workforce. 71% ned. We have led a proactive recruitment policy with a of our store and network managers have been ap - view to boosting our digital activities, as this side of the pointed from within. business is essential if we are to achieve our two-digit growth objectives within the next few years. Gender equality . We strive daily to ensure there are no professional inequalities between men and women. The Gender Equality Index, implemented by the French Labour Ministry, has assigned us a rating of 83/100 in 2019 (82 in 2018) with a 100/100 score on 4 of the 5 criteria (gender pay gap, pay rise and promotion breakdowns, gender parity within the company’s ten highest earners).

These standards are reflected at the highest echelons of the company: we are part of the top 5 SBF index companies displaying the highest percentage of women at executive level . Our Chief Executive Offi - cer and Director, Julie Walbaum, is a perfect example.

inclusion and employability . We have led several initiatives in this area. Some are naturally inscri - bed in the firm’s DNA: when we recruit - particu - larly within the store network which accounts for 70% of our headcount - we place a strong empha - sis on “soft”, or behavioural skills , but have no particular requirements in terms of qualifications Credit: Maisons du Monde Julie WALBAuM, Chief executive officer or professional experience . and Director of Maisons du Monde The Responsible Way - Good Job | 31 INTErVIEw

Instead, we founded an in-house training centre . The policy, with the managers, in order to systemise the goal of this facility, which is regularly enhanced, is to integration of these young workers. support low-skilled workers when they start in their new position and later, as they develop their careers. Maisons du Monde’s HR/SCR roadmap for 2021 also includes supporting skill-based charity organisations The Grandir initiative , for example, is a training course that are supporting the young people most exclu - that comes with a two-year higher education diploma. ded from the job market, particularly those living in This enables our deputy store managers to qualify for poor neighbourhoods. These initiatives are an op - a position as store manager, while also receiving a portunity for our teams to become actively involved state-recognised diploma . if they wish and help us open up the job market to these potential young workers - including the doors youth employment . As we operate in the retail busi - of Maisons du Monde, if relevant. ness, this issue is naturally close to our hearts. Since 2019, we therefore decided to double our number employment of people with disabilities . Maisons du of apprentices in France, which we believed was too Monde has just signed its first disability agreement . The low considering our ability to attract young workers aim is to catch up with standards on this issue and in - and build bridges between apprenticeship and per - crease our current percentage of disabled employees manent employment. We also strengthened our in - from 1.54% - which we are not at all happy about – to ternship policy. During the lockdown, we were keen 4% over the next three years . In this respect, we have to maintain our internship and apprenticeship recently completed a disability study throughout our in - contracts and therefore set up a specific on-boarding ternational facilities in order to set specific targets.

In these difficult times for some of our employees, we have tried to reach out as much as possible. A study has revealed that 80% of our staff choose to receive their employee profit sharing benefits upfront, rather than investing the proceeds in their employee savings plan, as they need this money to live. Our management therefore chose not to delay the payment of these benefits, which amount to around a month’s wages , despite being authorised to do so due to the challenging circumstances. Payments were therefore made as usual, in April.

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WHAT DOES YOUR COMPANY STAND TO GAIN ARE THESE POLICIES APPLIED ACROSS ALL OF FROM THESE INITIATIVES/IMPROVEMENTS? YOUR FACILITIES WORLDWIDE?

At Maisons du Monde, our business development At this stage, we haven’t yet developed social standards comes with a major growth challenge over the next that can be applied to facilities throughout the world. four to five years. This involves knowing how to at - Nevertheless, we pay close attention to equality among tract the best talents , both in volume and quality. our staff. In light of the wide disparities – including within Europe – between furlough mechanisms , we have Each of the initiatives we are actively working on in chosen to implement a unique policy on this issue, order to improve job quality and working conditions aligned with the compensation system in France – help us establish our offer as an employer and be - which is also the most favourable, and have compen - come - in the very near future we hope – one of the sated any gaps with local systems to ensure that most attractive within our industry. This is why we are 100% of our furloughed teams receive 80% of their eager to rise to the challenge of visibility, an issue we net remuneration. have to contend with as an employer. Our brand is well-known, but our potential for attracting talents As far as our presence in developing countries is can still be enhanced. concerned, our production facility in vietnam , where we employ over 1,000 staff, applies a more generous I would also say that these policies are client-driven compensation policy than the local standard. every to a certain degree as, ultimately, they define who year, we carry out social audits on our suppliers; we are from the customers’ point of view. Particularly these are conducted by external auditors belonging as consumers now have a clear preference for brands to international groups and ensure that each sup - that are consistent from end-to-end, from the products plier meets our standards for working conditions. on sale in their stores to the way they manage their teams, and whether they facilitate the inclusion of In Vietnam, Maisons du Monde has also developed a certain groups of people in particular. We want to be training programme designed to support our low- able to align the company’s purpose with the way skilled staff. The head of this structure is a trained car - it operates and be a brand that mirrors the values penter who gradually took on more and more and concerns expressed by its customers. responsibilities and is now in charge of the factory. He has set up a system based on mentoring – reflecting his own background, which enables workers with low

wE wANT TO bE AblE TO AlIgN ThE COMpANy’S purpOSE wITh ThE wAy IT OpErATES ANd bE A brANd ThAT MIrrOrS ThE VAluES ANd CONCErNS EXprESSEd by ITS CuSTOMErS. Credit: Maisons du Monde

The Responsible Way - Good Job | 33 INTErVIEw qualifications upon entering the facility to gain proper • Enable those interested in joining our company training in the carpentry trade . Today, all production without relocating to Nantes to be able to do so managers at the factory are local workers. while keeping a healthy work-life balance. This is an important factor for us, as it enables us to seek YOUR HEADQUARTERS ARE LOCATED IN NANTES. out talents and skills wherever they are. We have WHAT ADVANTAGES AND DISADVANTAGES DOES also recently developed a formal remote working THIS LOCATION ENTAIL FOR YOUR COMPANY? policy establishing a standard practice of 2 days working from home. Nantes is a very vibrant city and boats the largest number of new residents in France, and in this regard, Currently spread across five premises in the area, we are very lucky. However, the heart of the company, one of our projects is to bring all of the teams to - where we design our collections is also based here, gether on one single site. We are transforming, in Nantes, which involves finding the stylists, product growing, developing new jobs and it is important managers, buyers, experts in various fields in an em - for us to preserve the corporate culture that has ployment area that remains limited in terms of product driven the brand’s success. Local authorities are development. providing precious assistance with this project and it is a great advantage for us, in this context, Our strategy here has been structured around two to be valued as a major employer in the region . priorities:

• Make living in Nantes an asset and promote the quality of life the city has to offer. We have therefore developed an HR package designed to help anyone considering a relocation (to facilitate mobility, the move, helping partners find jobs...).

Credit: Maisons du Monde 5 0

E G A G N

E SrI

O T

By SycOMOrE The independent analysis carried out on each of M these 5 stakeholders enables us to assign a rating O

D SpIcE (S, P, I, C and E) on a scale of 1 to 5. The weighted

E average of these different ratings, adjusted to take E into account specific industries and businesses, R

F rAtINGS forms the company’s global sPiCe rating . Overall,

E this rating includes 80 criteria, both qualitative and

H quantitative . T We believe that a company can only create long- Within our company valuation models, this rating term sustainable value if this value is shared with affects how we calculate the target price for the all of its stakeholders. When examining companies, company’s stock: sPiCe rating has a +/- 40 % im - we therefore take a holistic view which is reflected pact on the risk coefficient ( β) used to determine in our fundamental research model: this model is the company’s weighted average cost of capital structured around 5 company stakeholders under (waCC) and the discount rate for future cash the sPiCe acronym - society & suppliers, People, flows , therefore impacting the company’s financial investors, Clients and environment. valuation

spice : our modeL for fundamentaL anaLysis Source: SYCoMoRe AM

S society & suppLiers , by guaranteeing equality and transparency P peopLe, by providing a pleasant and stimulating working environment I investors, by offering an attractive return on capital employed C cLients, by supplying differentiated products and/or services E environment, by protecting ecosystems and developing natural capital

The Responsible Way - Good Job | 35 Our global and integrated approach enables us to analyse companies by looking at their full sustainable deve - lopment picture . The illustration below shows the correspondence between the three sustainable development pillars (the economy, human society and the environment), esG challenges (Environment, Social and Governance) and the five stakeholders that make up our proprietary sPiCe approach . lE DEvE AB lOp AIN M St EN E S G t ENVIrONMENT SOCIAl gOVErNANCE SU society S society & suppLiers P peopLe economy I investors C cLients E environment

en t vironmen Source: SYCoMoRe AM a fund’s sPiCe rating is thereby a reflection of its sustainable development performance .

breakDOwN OF PORTFOLIO sPiCe FUNDS RATING HOLDINGS BY sPiCe ratiNGs funds spice rating (from 1 to 5) francecap francecap 3.6 sÉLection midcap sÉLection midcap 3.5 sÉLection pme sÉLection pme 3.6 pArTNErS pArTNErS* 3.4 sustainabLe tech sustainabLe tech 3.5 sÉLection crÉdit sÉLection crÉdit 3.3 sÉLection responsabLe sÉLection responsabLe 3.7 eco soLutions eco soLutions 3.7 happy@WorK happy@WorK 3.7 shared GroWth shared GroWth 3.5 next Generation next Generation 3.4 EurO STOXX EurO STOXX 3.4 MSCI EurOpE MSCI EurOpE 3.3

* This fund has not received the French SRi label Data as of 31.12.2020. Fund performance may be partly driven by the eSG indicators of portfolio positions but these are not the sole determining factors. Past performance is no guide to future returns. the funds offer no guaranteed yield or performance and carry a risk of capital loss . Prior to making an investment decision, investors are requested to consult the relevant KiiD available on our website: www.sycomore-am.com. ES fOCuS i G INVESTOrS

The i rating focuses on the company’s relationship with its shareholders. Our research efforts target the strength of the business model – looking at the income structure, competitive positioning, growth levers (ability to in - novate, potential for external growth, organic value creation) – and on the quality of governance , particularly the balance of power and effective execution of the company’s strategy.

As a key aspect of our analysis process, we also look at how the interests of all stakeholders are taken into ac - count, through a fair distribution of the value created by the company and the integration of sustainable de - velopment considerations within its strategy .

business modeL Governance

Data as of 31.12.2020. Fund performance may be partly driven by the eSG indicators of portfolio positions but these are not the sole determining factors. Past performance is no guide to future returns. the funds offer no guaranteed yield or performance and carry a risk of capital loss . Prior to making an investment decision, investors are requested to consult the relevant KiiD available on our website: www.sycomore-am.com. The Responsible Way - Good Job | 37 E g fOCuS s | p | c S SOCIETy & SupplIErS pEOplE ClIENTS

Social factors are addressed via the “Society & Suppliers” ( s rating ), “People” ( P rating ) and "Clients” ( C rating ) of the SPICE analysis framework. The s rating reflects the company’s performance with respect to civil society (“Society”) and its suppliers (“Suppliers”). The criteria analysed include the societal contribution of the company’s businesses , its corporate citizenship , the control it exerts on its supply chain , and the balance and integration of sustainable development considerations within its procurement process. The P rating focuses on the management of human capital , based on the integration of human factors within the company’s strategy, its corporate culture , its performance in terms of health & safety , and its ability to foster a wor - king environment that is favourable to talent development . The regular measurement of employee engagement , notably through satisfaction surveys, is also a relevant tool for the purposes of our analysis. The C rating pays attention to the company’s clients , looking at its market positioning , the quality of its marketing, the diversity of its distribution channels, its ability to navigate the challenges of digitalisation, as well as client satisfaction . society suppLiers

peopLe cLients

Data as of 31.12.2020 Sg fOCuS e E ENVIrONMENT

The e rating reflects the company’s performance in matters relating to natural capital . It captures, on the one hand, how environmental issues are taken into account within the company (its leaders’ ambition, the extent to which this is embedded within the company’s strategy, its culture and its procedures, as well as risk management and the environmental footprint of its operations), and on the other, transition risk. The latter is structured around the impact of the business model – according to a life Cycle analysis , based on the Net environmental Contribu - tion (NeC) , a metric used to measure the contribution of each business to the environmental transition - and how this model is aligned with the trajectories compatible with long-term environmental objectives and the fight against climate change . Finally, the E rating includes the assessment of exposure to physical risks caused by cli - mate change and other disruptions affecting the ecosystem. we chose not to include the measurement of the carbon footprint in our analysis , as this metric comes with too many limitations, notably: it does not take into account a large share of the upstream and downstream emissions across the value chain (known as scope 3, the available carbon footprint data only include scopes 1 & 2 and a small amount of upstream scope 3), nor the emissions prevented through the use of products and services (so - metimes called scope 4 and considerable for solutions businesses, such as insulation, thermal renovation or re - cycling), nor other environmental externalities (regarding water, air pollution, biodiversity etc). The carbon footprint is therefore shown for illustrative and educational purposes only, to be compared with the NEC, which looks beyond carbon emissions and measures a tangible positive or negative net contribution. environment nec and carbon footprint carbon funds footprint nec (Teq Co 2 / € m invested / year) francecap 450 8% sÉLection midcap 161 14% sÉLection pme 220 12% pArTNErS 257 1% sustainabLe tech 17 1% sÉLection crÉdit 144 5% sÉLection responsabLe 234 13% eco soLutions 552 53% happy@WorK 69 2% shared GroWth 222 5% Data as of 31.12.2020, neC 1.0 calculated by Sycomore AM on 2019-2018 data. next Generation 196 6% *”is the transition risk material? Testing the net environmental Contribution metric on a universe of listed european equities” - 12th Financial Risks international Forum, EurO STOXX 301 1% institut Louis Bachelier, Paris, March 2019 MSCI EurOpE 254 -1%

The Responsible Way - Good Job | 39 tOp 10 Our MOST pOrTfOlIO rEcENt rATINgS SpIcE MEEtINGS stocKs spice rating (1 to 5) spice rating (1 to 5)

LeGrand 4.2 pLastic omnium 4.0 ØrSTEd 4.2 Id lOgISTICS 4.0 SChNEIdEr ElECTrIC 4.1 ThErMAdOr 4.0 wOrldlINE 4.1 burEAu VErITAS 3.9 ASMl hOldINg NV 4.1 dEVOTEAM SA 3.9 EdENrEd 4.1 SEb 3.9 VESTAS 4.0 VOlTAlIA 3.9 phArMAgEST 4.0 NEXITy 3.8 SOMfy 4.0 kOrIAN MEdICA 3.7 dASSAulT SySTEMES 4.0 AlSTOM 3.7 bIC 3.7 SpIE 3.7 OrpEA 3.7 ubISOfT ENTErTAINMENT 3.7 SOprA grOup 3.7 EurAzEO 3.7 MAISONS du MONdE 3.6 klEpIErrE 3.6 ElIS 3.6 Data as of 31.12.2020 IpSEN 3.5 6 0

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S and driven by a strong entrepreneurial mindset

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E R O recognised expertise on publicly listed companies M O C Y S performance-driven investment culture based on active management

A team of 66 people of which 9 are esG specialists

Established expertise rated by fitch ratings since 2008

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proprietary ESG research fed by a team of 9 specialists dedicated to ESG research

An analysis model exclusively fed with raw data published by the companies themselves

On-going and constructive dialogue with the Sustainable Development and Investor relations teams of the companies in which we invest

A conviction-driven SrI approach recognised by the Novethic label since 2011 and by the government since 2016

firm engagement with key players in the field of SrI: prI, cDp, french-SIf (fIr), SfAf, Government Ministries, universities , NEC Initiative OUR SRI ASSETS UNDER MANAGEMENT: €7.7bn Growth of SRI AUM

data as of 31.12.2020

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