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AP1

PRI reporting framework 2017

You are in Strategy and Governance » Innovation

Innovation

SG 17. Innovative features of approach to RI

17.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

17.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

To our knowledge, these are innivative features to RI

EXTERNAL MANAGERS EQUITIES AND FIXED INCOME ACTIVE MANAGERS

We have a continuous dialogue with our external managers where we explain our approach to sustainable value creation and ask how the external managers investment philosophy and process is aligned with ours. Dialogues are among other things based on questionaires and ESG monitoring of portfolios.
We travel with our managers to observe how they interact with the companies on ESG issues and also show the companies and managers that we as an asset owner care about ESG issues. ESG is a priority on the meeting agenda. We work actively with our mangers and act as sounding board to contribute and share our experiences and network to drive development of their integration of ESG in their investment processes. (see examples under 12.1)

EXTERNAL MANAGERS EQUITIES PASSIVE MANAGERS

Quantitative managers are also expected to develop their investment processes to encompass ESG factors. In addition, we have initiated projects with both existing and potential managers to improve our passive book of investments from an ESG perspective. The aim is to drive the development in the industry and rethink passive solutions. This will continue in 2017.

PRIVATE EQUITY

On the private equity side we have developed an internal monitoring and rating process to, among our core GPs, identify those with the highest ESG risks. The assessment starts with an ESG questionnaire whith questions related to the GP's commitment to ESG, integration of ESG in investment process, integration of ESG in ownership and ESG reporting. Responses are assessed and results in an overall rating of the ESG preparedness of the GP.  In parallel, an ESG risk rating is done of the businesses that the GP has or might invest in (based on assessment of the sectors and regions). Finally the two ratings are combined giving AP1 a good understanding where the ESG risk are the highest, i.e. where we should focus our engagment with the GPs.

17.3. Additional information.


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