This report shows public data only. Is this your organisation? If so, login here to view your full report.

KLP

PRI reporting framework 2019

Export Public Responses
Pdf-img

You are in Direct - Listed Equity Incorporation » ESG incorporation in actively managed listed equities

ESG incorporation in actively managed listed equities

Implementation processes

LEI 01. Percentage of each incorporation strategy

01.1. Indicate (1) which ESG incorporation strategy and/or combination of strategies you apply to your actively managed listed equities and (2) the breakdown of your actively managed listed equities by strategy or combination of strategies (+/- 5%)

ESG incorporation strategy (select all that apply)

Percentage of active listed equity to which the strategy is applied
69 %
Percentage of active listed equity to which the strategy is applied
31 %
Total actively managed listed equities 300%

01.2. Describe your organisation’s approach to incorporation and the reasons for choosing the particular ESG incorporation strategy/strategies.

Further, integration applies also for responsible business practice, and is seen as key to sustainable development. We ensure this through our integration of social responsibility in all business processes, long-term and responsible management of pension funds, work with ethics, integrity and anti-corruption in dealing with customers, suppliers and others in the value chain (i.e KLPs supplier declaration), and the use of ISO 26000, the international standard for social responsibility, as guidance.

01.3. If assets are managed using a combination of ESG incorporation strategies, briefly describe how these combinations are used. [Optional]

Screening applies to all investments - both passive and active. Screening alone applies to KLPs investments in factor funds. Integration applies for active fundamental investments and KLPs fund "KLP AksjeGlobal Mer Samfunnsansvar" which has been certified by by the Nordic Ecolabelling.

The fund KLP AksjeGlobal Mer Samfunnsansvar follows the guidelines given by the Nordic Ecolabelling which include negative screening, positive inclusion, engagement and voting. Criterias can be found here: https://www.nordic-ecolabel.org/product-groups/group/?productGroupCode=101

For the active fundamental equity investment, ESG is considered in the investment process and followed up more closely when invested. Our active investments are in the Norwegian market and thereby gives the oppurtunity for a closer engagement process. 


LEI 02. Type of ESG information used in investment decision

02.1. Indicate what ESG information you use in your ESG incorporation strategies and who provides this information.

Type of ESG information

Indicate who provides this information  

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

Indicate who provides this information 

02.2. Indicate if you incentivise brokers to provide ESG research.

02.4. Additional information.[Optional]

KLP uses a variety of ESG information regularly to inform its investment process. KLP's ESG service providers monitor the investment universe and engage with companies and conducts ESG-analysis of companies in the investment universe. On specific incidents a service provider sends out an alert to inform the SRI-team.

ESG-research is conducted by service providers or the SRI-team on spesific incidents, companies or sectors independently or with the help of the portfolio managers or other experts in the relevant field.


LEI 03. Information from engagement and/or voting used in investment decision-making

03.1. Indicate if your organisation has a process through which information derived from ESG engagement and/or (proxy) voting activities is made available for use in investment decision-making.

03.2. Additional information. [Optional]

The relevant asset managers regularly participate in engagement with the companies they follow, also on ESG issues. For example, within the voting process, asset managers participate to determine KLP's vote in any upcoming general meetings in the Norwegian market.


(A) Implementation: Screening

LEI 04. Types of screening applied

04.1. Indicate and describe the type of screening you apply to your internally managed active listed equities.

Type of screening

Screened by

Description

KLPs guidelines for responsible investments screening criteria:

ESG performance: human rights, labour rights, environment, corruption, business ethics

Product: Weapons that violate basic humanitarian principles, more than 30% of revenues from coal-based activities or extraction of oil from oilsands

Sector: Tobacco

The Nordic Ecolabelling applies additionally criteria on screening out all fossil fuels and weapons. 

 

 

 

Screened by

Description

KLPs fund KLP AskjeGlobal Mer Samfunnsansvar includes only companies that have a best in class performance on ESG. Information on the fund can be found on KLP.no: https://www.klp.no/bedrift/fond/aktive-aksjefond/klp-aksjeglobal-mer-samfunnsansvar-1.40522

Screened by

          UN and EU sanctions, international humanitarian law, relevant weapons-related conventions
        

Description

Portfolios are screened for violations of the above mentioned norms. Companies that run an unacceptable risk of severe or systematic violations are excluded.

04.2. Describe how you notify clients and/or beneficiaries when changes are made to your screening criteria.

The overall guidelines are established by the KLP board. Screening criteria are reviewed continuously and altered when needed. Any changes are published on the website and communicated through relevant information channels. The most recent version of the guidelines was adopted in December 2017.

Guidelines for KLP as a responsible investor: http://english.klp.no/polopoly_fs/1.39178.1513197530!/menu/standard/file/Guidelines%20for%20KLP%20as%20a%20responsible%20investor.pdf


LEI 05. Processes to ensure screening is based on robust analysis

05.1. Indicate which processes your organisation uses to ensure screening is based on robust analysis.

05.2. Indicate the proportion of your actively managed listed equity portfolio that is subject to comprehensive ESG research as part your ESG screening strategy.

05.3. Indicate how frequently third party ESG ratings are updated for screening purposes.

05.4. Indicate how frequently you review internal research that builds your ESG screens.

05.5. Additional information. [Optional]

For exclusion decisions based on company conduct, KLP  generally requests a second opinion on the underlying analysis from a relevant external expert.


LEI 06. Processes to ensure fund criteria are not breached

06.1. Indicate which processes your organisation uses to ensure fund criteria are not breached.

06.2. If breaches of fund screening criteria are identified - describe the process followed to correct those breaches.

KLP performs biannualy screens. Companies that are not in line with Guidelines for KLP as a responsible Investor (http://english.klp.no/polopoly_fs/1.39178.1513197530!/menu/standard/file/Guidelines%20for%20KLP%20as%20a%20responsible%20investor.pdf) will be divested from and put on the KLP-list, a list of excluded companies. The internal IT systems will perform pre-check compliance so PMs are notified if they try to buy securities issued by companies on the KLP exclusion list. 

If an error occures so that a secutity from a company on the KLP-list is invested in, the position will be sold immidiately. The breach of KLPs Guidelines will be reported to the CEO of KLP Asset Management, Compliance, Risk Management, and Responsible Investment immediately and holdings in the excluded security will be sold. This will also be reported to the KLP board of directors in the KLP Asset Management annual mandate reporting.

06.3. Additional information.[Optional]


(C) Implementation: Integration of ESG factors

LEI 08. Review ESG issues while researching companies/sectors

08.1. Indicate the ESG factors you systematically research as part of your investment analysis and the proportion of actively managed listed equity portfolios that is impacted by this analysis.

ESG issues

Proportion impacted by analysis
Environmental

Environmental

Social

Social

Corporate Governance

Corporate Governance

08.2. Additional information. [Optional]

The actively managed listed equities are in the Norwegian market where the PMs have good knowledge of the companies and the market. ESG-information related to a company, market etc. is included in a hollistic view of the investment together with other information. 

The fund KLP AksjeGlobal Mer Samfunnsansvar is rebalanced every quarter and companies not in line with the criterias, both negative screeening and positive inclusion by the best in class performers, are reviewed. 


LEI 09. Processes to ensure integration is based on robust analysis

09.1. Indicate which processes your organisation uses to ensure ESG integration is based on a robust analysis.

09.3. Indicate how frequently third party ESG ratings that inform your ESG integration strategy are updated.

09.4. Indicate how frequently you review internal research that builds your ESG integration strategy.

09.5. Describe how ESG information is held and used by your portfolio managers.

09.6. Additional information.[Optional]

PMs and the RI-team regularly discuss and share company notes. meeting notes and other relevant information is shared between the teames.


LEI 10. Aspects of analysis ESG information is integrated into

New selection options have been added to this indicator. Please review your prefilled responses carefully.

10.1. Indicate which aspects of investment analysis you integrate material ESG information into.

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

Proportion of actively managed listed equity exposed to investment analysis

10.2. Indicate which methods are part of your process to integrate ESG information into fair value/fundamental analysis and/or portfolio construction.

10.3. Describe how you integrate ESG information into portfolio weighting.

ESG information is assed in by PMs of the active-fundamental portfolios and weighs in to their overall asessment of the company. 

 

The fund KLP AksjeGlobal Mer Samfunnsansvar is ecolabelled by the Nordic Ecolabelling. It is rebalanced every quarter based on the companies ESG-ratings.

10.4. Describe the methods you have used to adjust the income forecast / valuation tool

The method varies based on the specific investment under review. As an example, costs of compliance with anticipated environmental regulations would be included in valuation models.

10.5. Describe how you apply sensitivity and/or scenario analysis to security valuations.

2018 was the first year that we tested all investments under different climate-scenarios. 

10.6. Additional information. [OPTIONAL]


Top