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Fennia Varainhoito Oy

PRI reporting framework 2019

You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories (Private)


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Money Laundering
        
Conducted by
Asset class
Scope and process

Danske bank is under investigation in the United States, Denmark, Estonia, France and Britain over 200 billion euros ($226 billion) in payments that were found to have flowed through its Estonian branch from Russia, former Soviet states and elsewhere between 2007 and 2015. This all became public in September 2018. During the fall 2018, we met Danske bank multiple times to discuss with them what had happend and what kind of actions they were taking to tackle this problem. The discussions were on a high level (CFO-level) and also at the asset manager level. 

Outcomes

Danske bank showed us the measures they had taken and were about to take. Danske Bank has put many of their plans into action and has shown many improvements. One of the outcomes was to initiate a comprehensive AML programme, which has led to new organisational structures and new routines and procedures. All the Danske Banks employees take yearly mandatory training on anti-money laundering measures and compliance. Danske bank has also invested in automating business procedures and upgraded their IT systems. The system has improved anti-money laundering controls – among other things through better monitoring of bank transfers and suspicious customers.

Topic or issue
          Incorporating ESG more formally into manager DD
        
Conducted by
Asset class
Scope and process

In 2018 we performed for the first time comprehensive analysis on ESG factors on all managers used in our investment strategies. Prior to this ESG evaluations were based more on PM discussions.

In fixed income, where we use primarily active managers, we reviewed the following topics on each manager: UN PRI signatory, how ESG analysis is performed (databases used, incorporation into analyst fundamental analysis work), policies for engagement (both statistics and individual case examples), active ownership (policy and examples), ESG investment principles (firm wide or asset class specific), ESG reporting (frequency and content), exclusion lists and the definition for controversial weapons, climate strategy (is there a strategy in place and if not, are they developing one or otherwise taking into consideration climate change as part of investment strategies), measurement of carbon footprint.

 

In equity ETFs, we look at all the aspects listed above but take into consideration that the products tend to be more on the passive side, and hence less likely to e.g. be able to provide similar engagement examples as products run with extensive fundamental analysis resources.    

Outcomes

In some cases, managers have started to put more emphasis on ESG-factors after discussions we have had on the topic.

09.2. Additional information.


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