: 4 min
Constantly improving ESG extra-financial ratings
Several times a year, Safran responds to surveys conducted by various bodies and exchanges with extra-financial rating agencies specialized in assessing the performance of companies on environmental, social and corporate governance (ESG) criteria. These extremely rigorous surveys and discussions evaluate the relevance of the corporate strategy, the measures implemented and their results. At Safran, the teams of the Investor Relations, CSR, HSE, Climate Change, Purchasing, Human Resources and Institutional Relations departments all mobilized to respond to these highly comprehensive questionnaires.
Investors increasingly attentive to ESG criteria
In 2021, Safran improved several of its ratings with major non-financial rating agencies such as V.E. (formerly Vigeo Eiris), CDP (a dedicated climate agency), Sustainalytics and MSCI (see box below). The Group's ratings are "at their highest ever level", as Olivier Andriès pointed out during the Annual General Meeting of May 26, 2021.
These results and the Group's progress each year are evidence of the constant efforts made by Safran's teams to satisfy the expectations of employees, customers, civil society and investors, with whom we have had many exchanges over the past two years.
"ESG performance is increasingly considered by international investors as a crucial factor in the management of their portfolios, as reflected by the rise of funds specifically dedicated to investments qualified as sustainable or responsible (ESG), with an impact on the valuation of European companies. It is therefore very important that, in addition to the direct dialogue we must maintain with the fund managers (and their ESG teams) who hold Safran shares, we also work with these agencies, whose ratings are an essential part of our ESG profile," explains Cécilia Matissart, Vice President Group Investor Relations.
"Engage for the future", the CSR approach at the heart of the Group's strategy
ESG ratings are used by the financial community for all CSR issues that companies deal with.
In early 2021, Safran's new CSR strategy was launched under the name "Engage for the future". Resulting from a collective effort, "Engage for the future" was developed jointly with all stakeholders (suppliers, shareholders, employees, customers, etc.). It is based on four key points: decarbonizing the aerospace industry, being an exemplary employer, embodying responsible industry, and affirming our civic commitment. This strategy is broken down into a further 12 commitments and 14 key objectives.
A CSR policy can only be effective if it is a true reflection of the company that implements it. It is the expression of our Group identity and our vision of the future. It concerns all contributors, and we all have a role in implementing it", explains Charlotte Dieutre, CSR Director.
Safran's extra-financial rankings and ratings
1/ Benchmark extra-financial ratings for American and British investors
MSCI ESG Research rates companies on a scale from "AAA" to "CCC" (with AAA being the highest rating) based on their exposure to ESG risks and their management of these risks relative to other industry players.
The objective of MSCI ESG Research is to help investors identify the most financially relevant ESG risks and opportunities through enhanced transparency and access to ESG data and analysis.
In November 2020, Safran maintained its 2019 level and again received an A rating. This rating is an improvement on Safran's December 2018 rating of BBB.
Sustainalytics assesses the sustainability of listed companies based on their environmental, social and corporate governance performance. The rating they attribute is based on an ESG risk assessment, so the lowest score corresponds to the best extra-financial performance.
ESG risk level: 24.4 Medium Risk in April 2021, an improvement from 2019 when Safran presented a higher risk profile at 28.
Ranking in the "Aerospace & Defense" sector: 3rd out of 89 companies in the sector and 1st among companies in the sector with a market capitalization between $51 and $103 billion. This ranking improves on 2019, when Safran was 6th out of 82 companies in its sector.
2/ Benchmark extra-financial rating for French investors
- V.E (ex Vigeo Eiris):
The survey conducted by the V.E. rating agency assesses the Group on environmental, social and corporate governance (ESG) criteria. This rating is updated every two years.
Overall score in May 2021: 62/100, up 7 points compared to 2019 (55/100 in 2019, 49/100 in 2017, 48/100 in 2015, 43/100 in 2013).
Ranking in the "Aerospace & Defense in Europe" sector: 1st out of 20 companies in the sector. Safran has maintained this ranking since 2019.
Safran's ranking in relation to all companies rated by V.E.: 116 out of 4,907. Safran moved up 83 places from 2019.
3/ Climate rating
CDP "ex-Carbon Disclosure Project":
On the basis of the responses it receives, to its questionnaires, CDP assesses the impact of companies, territories and organizations on climate change, water, forests and supply chains. Companies are then graded between A and F, with A being the best score.
In December 2020, Safran received a score of A-, up from a "C" in 2019. This progression places the Group at the "leadership" level.