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Storebrand Asset Management

PRI reporting framework 2020

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Investment policy

SG 01. RI policy and coverage

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

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

Storebrand's Group Policy on sustainable investments is an overarching structure stating Storebrand Asset Management's vision and goals in sustainable investments. The policy was revised in 2019 and expanded to include developments in exclusions and engagement. Storebrand's Group Policy recognises explicitly the importance of the UN Sustainable Development Goals, outlined in Agenda 2030 in investments. The goals provide a common international agenda and highlight key business risks and opportunities. In addition the policy is clear on

- Criteria and policy for Exclusions based on international norms and conventions

- Criteria and policy regarding our observation list

- Policy and methods for Integration of ESG factors into fund management

- Cases for engagement and engagement alternatives

- Use of Voting Rights and Proxy voting policy

- Securities lending

- Conflicts of Interest

- Inside information

- Membership of organisations and Guiding Principles including the PRI framework

- Scope, responsibilities, follow up and reporting. The policy covers all asset classes and geographical regions, as well as all externally managed assets,

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

In addition, a set of policies apply to the selection of external asset managers. Comprehensive ESG guidelines are outlined in the selection process with sustainability being one of the key selection criteria. In addition policies regarding follow up and monitoring of external fund managers ensure quarterly screening and engagement with managers.

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

Our asset management’s largest climate-related financial risks and opportunities are believed to lie in the transition to a low-emission society. Climate policy and regulations, more rigorous emission requirements, a changed cost structure and market preferences may affect our investments. 

Storebrand Asset Management stress tested its investments through the 2 Degrees Investing Initiative scenario analysis tool PACTA[1] in 2019. Transitional risk was mapped through exposure to high and low carbon technologies in the most important sectors, including fossil fuels and electrification in the transport sector. The results indicate how our investments are influenced by different scenarios, compared to reference portfolios.

The main impacts of scenarios indicating successful climate action policy, are:

  1. Low returns from companies that are not able to adapt to a low carbon economy, such as the risk of stranded assets in the short to medium term.[2]
  2. Storebrand is not able to meet increasing customer demands for green investments. If Storebrand does not invest enough in green companies, there could be a reputational risk that may affect our market position.
     

The main impacts of the second scenario, late transition, are:

  1. Low absolute returns and financial instability due to climate related issues.
  2. Solution companies and projects are priced too high in the short term, creating a valuation bubble that may burst in the medium to long term.

 

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[1] Paris Agreement Capital Transition Assessment

[2] Stranded assets are assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

Describe the associated timescales linked to these risks and opportunities.

We have therefore based our assessment on the impact of successful climate action (1,5oC) and a late transition (>2oC). Based on these two scenarios we identified the potential risks and assessed them in the short (1-3 years) and long term (3-10 years).[1]

 

[1] Since climate risk has been integrated into our structured risk assessment framework, which only looks at these two terms, we have not included the longer- term risks occurring beyond 10 years.

01.8 CC. Indicate whether the organisation publicly supports the TCFD?

01.9 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

Climate change adaptation and the transition to a low carbon economy provide both risks and opportunities for Storebrand. Sustainability is integrated into all investment decisions we make, and in 2019 we further strengthened climate risk analyses and disclosure through adopting the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We were also one of twenty leading investors in the UNEP FI investor group on TCFD. The group developed models to enable scenario-based assessment and disclosure of climate-related risks and opportunities. In addition we worked on methods to determine the value at risk for equity, bond and real estate portfolios.

In 2019, we changed our methodology to report on carbon footprint metrics according to the TCFD recommendation using weighted average carbon intensity. To advance our approach to climate-related reporting, both Storebrand Asset Management and Storebrand Life Insurance participated in the UNEP FI TCFD project for investors and insurers in 2019.

 

 

1.10 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.


SG 02. Publicly available RI policy or guidance documents

 

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

URL/Attachment

Attachment


02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

URL/Attachment

URL/Attachment

02.3. Additional information [Optional].

Please see the newly published integrated Annual Report 2019 for the Storebrand Group in English.

URL: https://www.storebrand.no/en/investor-relations/annual-reports

For all Storebrand Sustainability reports please see

https://www.storebrand.no/en/asset-management/sustainable-investments/document-library


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

Storebrand Asset Management is dependent on access to information about the company in order to assess any challenges companies have with their corporate governance. It is also important to retain flexibility with respect to funds' investments so that one can act in the best interests of the unit holders. The Storebrand Group should have a clear understanding of the information received in relation to the rules on inside information, also in relation to the exercise of corporate governance. It is expected that companies and their advisors also have an awareness of this legislation and do not put the Storebrand Group in an insider position without consent.

If in doubt it should, as far as possible, be clarified by the declarant whether the relevant information is inside information before it is received.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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