For instance, while a fund like GemEquity has met all the V2 criteria of the SRI Label since its certification (in February 2021), switching to V3 would have required selling 15.2% of the portfolio as of December 31, 2024! This is a very high percentage.

Some of the particularly restrictive aspects of this evolution include:

• A complete ban on investing in companies headquartered in South Africa (really!), Vietnam, or the Philippines. This is a particularly restrictive measure in our view.
• Ban on conventional fossil fuels. (We have already excluded unconventional energy sources for more than a decade.) While this point does not warrant specific comment, these companies can represent a significant weight of indexes in countries like Brazil or Saudi Arabia.
• Increase in thresholds exclusion from 20% to 25%, then 30%. With 1,254 companies in the MSCI EM index, excluding 30% means eliminating more than 360 companies. That’s a lot.

That being said, for a portfolio already certified under SRI V2, having to sell 15.2% of holdings seems like too high a price to pay and risks undermining our ability to deliver performance for our clients.
We have therefore decided to give up the SRI Label for the GemEquity fund. The same applies to GemAsia, where this would have required selling 14.5% of the portfolio holdings.

The case for GemChina is entirely different, as compliance with V3 of the SRI Label requires no divestments!
Thus, we are maintaining the SRI Label for GemChina and wwill be submitting it for SRI Label V3 validation as soon as possible (likely in the second quarter). In the meantime, it retains its certification.

Regardless, since our ESG approach primarily aims to reduce the overall risk of the portfolio, it is naturally preserved across all our equity funds. Our three equity funds will at minimum retain the same ESG approach as before, including proprietary ESG ratings for all portfolio holdings and the application of criteria and exclusions aligned with the V2 standards of the label.

All our funds also maintain their SFDR 8 classification.