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Storebrand ASA

PRI reporting framework 2020

Export Public Responses

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

成果および結果

SAM 08. Percentage of externally managed assets managed by PRI signatories

08.1. 組織では、RIに関するベストプラクティスが保有資産の運用に確実に適用されるようどのようにして万全を図っているその内容を説明してください

方策

          We continually monitor our external fund managers for adherence to our own internal standards on responsible Investment and have strategies in place to address non-compliance.
        

方策

          Our dedicated ESG scorecard is one of 5 assessment methods for potential fund managers. This ensures that over time assets should migrate to managers With better Responsible Investment practices.
        

08.2. 補足情報 [任意]

The ESG scorecard for Private Equity manager selection consists of 6 categories

  1. Investment philosophy (ethical standard)
  2. Fund managers attitude to ESG
  3. Implementation of ESG criteria in the investment process
  4. Membership of PRI /Global Compact
  5. Access to information on portfolio companies
  6. Exposure to ESG risk factors

 

Investment philosophy

The assessment is based on the manager’s strategy and plans for portfolio companies. We interview fund managers individually and in groups and seek to gain insight into whether the fund managers philosophy is consistent with our own.

Fund managers attitude to ESG

This assessment is based on marketing material and other public information and interviews are undertaken to confirm our impressions. Where possible Storebrand will ensure that agreements with managers contain the right to abstain from ownership in portfolio companies that breach our Storebrand standard for sustainable investments.

Implementation of ESG in the investment process

Our assessment of how ESG principles find their way into investment processes and value creation plans for portfolio companies.

Membership of Global Compact and PRI

Both membership and/or plans for membership are mapped during the selection process.

Access to information on portfolio companies

We map what types of information on portfolio companies is published quarterly/annually. We also map if there is reporting on ESG criteria.

Exposure to ESG risk factors

The assessment is based on a review of existing investment strategies and previous investments. If serious risk factors are uncovered, an assessment is made of the manager’s capacity and resources to manage/reduce the risk effectively.

 

ESG in fund manager selection process - Equities

ESG is an integrated part of the Storebrand/SPP manager selection process. The process includes qualitative and quantitative measures and assessments.

Quantitative measures include our proprietary ESG rating which covers E, S and G considerations on stock and portfolio level. We also complement internal ratings with data from our external data providers. The quantitative measures will include considerations of the current and historical portfolio characteristics, but also how well the portfolios are positioned in terms of relevant future sustainability trends.

We also rate our external funds/managers using a wide range of criteria. The main areas in this qualitative assessment are as following:

  • The fund mandate with respect to ESG considerations
  • Attitudes expressed, implemented policies and dedicated ESG resources in the fund organization
  • Integration of ESG in the investment process
  • Portfolio manager/team knowledge and attitudes
  • Previous experience with the manager in question

 

When monitoring the external managers selected, we also use a combination of quantitative and qualitative measures. Changes in overall ratings and portfolio content is of course important, as well as ongoing periodical fund reviews with the managers where we discuss portfolio positions from an ESG perspective. Working together with our external managers to influence the portfolio companies in a better direction is also important for us, as this gives increased leverage to our internal impact potential.


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

09.1. 報告年度において、運用会社の選定、指名やモニタリングプロセスの過程で、ESG問題がどのように対処されているかを示す事例を挙げてください。

トピックまたは問題
          Breach of ESG investment policy
        
実行者
資産クラス
対象範囲およびプロセス

During a periodic review of portfolio company exposure, we discovered that we had an indirect position in a publicly listed company ("Company A") that was excluded from our investable universe. We had a side letter with an opt out clause. However, due to our own oversight, the period under which we could claim an opt out had expired.

We contacted the Manager ("Manager A") to inform them about the situation and to seek possible solutions. Manager A was surprised that Company A was on an excluded list as the manager had completed a full ESG review and assessment prior to making the investment and asked us to provide background information. We provided this and it became apparent that the exclusion was under a particular "S" topic that was not identified by Manager A or their ESG consultant during diligence.

Although under no obligation to do so, Manager A reviewed alternatives to rectify our breach.  After reviewing alternatives, Manager A offered to arrange an internal auction for our position in Company A.  A single bid came forward at a price that was deemed unreasonable. We decided to continue to hold our position, which now is fully realized.

結果

Through open and transparent interaction with Manager A, we were able to highlight ESG screening topics that were not apparent to Manager A previously. Our expectation is that such topics will be included ESG screening processes going forward.

We discovered a shortcoming in our own processes. Screening process against excluded publicly listed companies are made more robust.

トピックまたは問題
          ESG Due Diligence
        
実行者
資産クラス
対象範囲およびプロセス

We were introduced to Manager B, a specialist manager with a very strong track record and a profile that fitted well with our search criteria more generally. In early screening it became apparent that the focus area of the manager opened up for a potentially larger exposure towards certain "S" and "G" risks than average, as the strategy focused on investments in enterprises that principally conducted their business through long term government contracts in the US.

Moreover, we concluded that it would be difficult if not impossible for us to underwrite how these types of risks were mitigated by Manager B. This, in spite of Manager B's claim that mitigation and controlling for this type of risks were core competencies of Manager B, something we had no reason to question.

結果

Screening out potential areas with contentious ESG risks to reduce exposure.

トピックまたは問題
          Proactive search for managers seeking exposure and alignment with ESG factors
        
実行者
資産クラス
対象範囲およびプロセス

We have over several years maintained a separate screening funnel for managers who seek investments in enterprises that alleviate or provide solutions to some of the sustainability issues facing the global economy. In our search we have maintained that a manager must qualify on strategy, experience, investment track record and risk-reward criteria in the same way as any other manager in our program, i.e., the positive sustainability attributes cannot offset shortcomings in the investment acumen. The review to date has identified two investment managers as qualified candidates and we are increasingly seeing additional promising candidates.

結果

Of the two qualified candidates, we have committed capital with Manager C, when Manager C launched its initial fund, and subsequently committed capital when Manager C raised its second fund. The second Manager, Manager D is placed on our watch list. The watch list is a list of managers we have attached a high probability that we will invest with in the future. This process ensures that Cubera has a systematic way of identifying managers who actively use sustainability to identify investment opportunities.

トピックまたは問題
          Contributing to improving ESG proficiency in relation to manager selection
        
実行者
資産クラス
対象範囲およびプロセス

We recognize that the private equity ownership model, thanks to its long term, active and majority ownership character, is particularly suited to manage ESG risks and opportunities. We observe that several private equity fund managers present attractive investment opportunities, while also showing improvement potential and improvement willingness in terms of ESG proficiency. In such a case, we seek to contribute to improve the manager's ESG proficiency. Our contributions to improvements are done through legally binding agreements (e.g. side-letters), as well as educating the fund managers with our best practices, which may entail holding workshops for the fund managers and maintaining continuous dialogues.

結果

In 2019, we invested in two funds which had improvement potential and improvement willingness in terms of ESG proficiency. For the two fund managers in question, we held workshops, continuous dialogues and imposed side-letter constraints. Both fund managers lifted their ESG proficiency by adopting more stringent ESG policies and establishing plans for further ESG development.

トピックまたは問題
          Dialogue with managers of funds with existing portfolios
        
実行者
資産クラス
対象範囲およびプロセス

Our secondary strategy entails the acquisition of commitments to Nordic buyout funds with an existing portfolio of companies. In this strategy, we cannot influence the investments by the fund manager. As a part of our due diligence for each such acquisition, we review the managers' ESG routines, and assess the ESG-alignment of the existing portfolio. For the latter, we undertake an extensive review of available public information and the information the manager describes in their reporting. From time to time, we observe that portfolio companies are not ESG compliant. In such a case, we establish a dialogue with the fund manager in question to learn more on the issue in question and assess to what extent the portfolio company and the fund manager is mitigating the issue. If the mitigation cannot be expected, we will not undertake the investment. Even though we cannot influence the investment, we believe that initiating a dialogue, and worst case, rejecting an investment opportunity, sends a strong message to the fund manager in question, which will likely influence their future investment decisions.

結果

In 2019, we identified some ESG-misalignments in portfolio companies in prospective acquisitions. We initiated a dialogue with a handful of relevant fund managers in this respect. In 2019, all identified issues had been or were expected to be mitigated.

Topic or issue
          Promoting diversity in the Private Equity industry
        
Conducted by
Asset class
Scope and process

We are leading in terms of gender diversity in the Private Equity industry. We recognize that diversity in the workplace provides an organization with valuable perspectives on issues driving the business, which leads to better decisions. In the Private Equity industry, better decisions equal better investments, which will yield better returns in the long run. The professionals engaged in the Private Equity industry are predominantly male. To this end, in 2019, we co-led the launching of Level 20 in Norway, a non-profit organization set up to promote diversity in the Private Equity industry.

Outcomes

The Norwegian chapter has been successfully established. Events with key industry people have been organized to raise awareness. The chapter has created a mentoring program to inspire women to join and succeed in the private equity industry. Level 20 and the Norwegian Venture Capital Association (NVCA) have hosted events at universities in Norway to inspire students to join the private equity industry.

09.2. 補足情報 [任意]


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