Gjensidigestiftelsen mostly invest in funds or fund-like structures and therefor leaves dialogues with specific companies up to the fund managers. However, Gjensidigestiftelsen follows both funds and underlying companies as closely as possible to make sure that incidents haven’t occurred and to follow up immediately if they do.
Gjensidigestiftelsen does their own screening related to incidents on the underlying asset level. Companies that scores poorly on this parameter is flagged by the ESG-screening team. Underlying companies in bond- or equity funds is screened and studied in the MSCI ESG Manager Tool and Factset. Companies in property-, impact investment- and private equity funds are screened manually by the responsible portfolio managers. If incidents are detected, the responsible portfolio managers have an obligation to follow up with the specific funds about these issues and to map out how this is to be handled in each specific case.
The abovementioned process usually starts with requesting a meeting with the fund or to put the specific portfolio company on the agenda of an upcoming meeting. How urgently this is handled is determined by the severity of the incident. Gjensidigestiftelsen have on multiple occasions brought such findings to fund managers, and fund managers that continue to invest in the companies in question must have good reasons and explanations for their decision as well as show how they work with the company to prevent this from happening again in the future. The foundation has not yet disinvested in a fund solely for a lack of such a response, but funds in this position is followed closely by portfolio managers and the funds are expected to take the matter at hand seriously.
In addition to the mentioned screening for controversies, Gjensidigestiftelsen require each asset manager, before we make our initial investment, to have guidelines for following up on companies where an incident has occurred and to have guidelines for notifying their investors if something is to happen. In this way we can feel more certain that the funds in our portfolio doesn’t tolerate controversial behavior from the companies they are invested in and that they have routines in place if incidents do occur.
Furthermore, all Gjensidigestiftelsens employees that is apart of the investment team continuously follow news and statements from companies through our data programs and proper media channels to detect if there are any incidents to report on. If a team member notices something of that sort, the responsible portfolio manager is to be notified. It is the portfolio managers responsibility to follow up on the matter and to make the decision if this is something that needs to be taken up with the fund. Again, the urgency is dependent on the severity of the incident.
If incidents are detected this is reported to the board as a part of our biannually ESG-update. If managers notify us of incidents or we are made aware of incidents at other times, and these are classified as severe, the board is notified as soon as possible through proper channels. The board of Gjensidigestiftelsen has the over all responsibility of making sure investments are sustainable and align with both our mission and responsible investment strategy.