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

Suva

PRI reporting framework 2020

Export Public Responses
Pdf-img

You are in Organisational Overview » Asset class implementation gateway indicators

Asset class implementation gateway indicators

OO 10. Active ownership practices for listed assets

10.1. Select the active ownership activities your organisation implemented in the reporting year.

Listed equity – engagement

Listed equity – voting

Fixed income SSA – engagement

Please explain why you do not engage directly and do not require external managers to engage with companies on ESG factors.

          We do not have the necessary resources to engage directly with SSAs.
        

Fixed income Corporate (financial) – engagement

Fixed income Corporate (non-financial) – engagement

Fixed income Corporate (securitised) – engagement


OO 11. ESG incorporation practices for all assets

11.1. Select the internally managed asset classes in which you addressed ESG incorporation into your investment decisions and/or your active ownership practices (during the reporting year).

Listed equity

Fixed income - SSA

Fixed income - corporate (financial)

Fixed income - corporate (non-financial)

Fixed income - securitised

Property

Commodities

Money market instruments

Other (1)

`Other (1)` [as defined in OO 05]

          Mortgages, Loans and Syndicated Loans
        
Select the externally managed assets classes in which you and/or your investment consultants address ESG incorporation in your external manager selection, appointment and/or monitoring processes.
Asset class
ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes
Listed equity

Listed equity - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Private equity

Private equity - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Hedge funds

Hedge funds - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

Other (2)

Other (2) - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

11.4. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

Suva's Approach to Long-Term Investment and Mandates.

Suva's investment strategy is based on the principles of broad diversification and a long investment horizon. This strategy is possible for the reasons described below.

Suva provides mandatory accident insurance as part of the social insurance system in Switzerland to certain specified sectors of the Swiss economy. This partial monopoly ensures a relatively stable number of insured companies and allows Suva to take a long-term investment view.

Ongoing claims and disability pensions are financed through the collection of mandatory insurance premiums. Most of Suva's liabilities are for disability pensions which are long-term in nature. Under these circumstances the risk of forced selling of long-term investments at depressed levels is limited.

Given this ability to have a long investment view, Suva focuses not only on direct financial aspects when investing, but also takes into account environmental, ethical, social and governance principles. The normative basis for these principles is Swiss law, the international conventions signed by Switzerland, including those on the Environment, Human Rights, Labor Rights, Governance and Banned Weapons and the ten Principles of the UN Global Compact, all of which are taken to reflect the interests of the Swiss public.

In selecting external managers, Suva analyses their investment strategy and how they incorporate non-financial aspects into their due diligence processes. As both analyses are uniquely interrelated, a case-by-case evaluation of each manager is carried out.

A long investment horizon supports responsible investing. The preference for long-term investing in the context of selecting external managers is reflected in various aspects of Suva's manager selection process.

A manager's performance is quantitatively screened when Suva searches for new mandates. The filters applied in a quantitative screening are designed with the assumption that potential managers need a long time period to prove their capability to add value. Managers are thus not excluded for following longer-term investment approaches that might lead to significant periods of underperformance.

Suva prefers equity investment managers with longer-term investment strategies. Suva changes managers infrequently, generally in cases of a change in the organization or a deviation from a stated investment strategy.

While short-term investment approaches which are often applied by quantitative managers might not lend themselves to an active engagement on sustainability issues, they can still be an effective part of investment portfolios. Therefore, Suva does not exclude short-term investment approaches when implementing its investment strategy. However, there is a general preference to partner with equity investment managers that apply longer-term investment strategies. These strategies typically exhibit lower trading costs and managers have a strong self-interest to carefully evaluate ESG aspects during their due diligence of companies and in some instances to actively engage with companies. An investment manager that claims to follow a long-term investment strategy, but does not include ESG criteria in its analyses, is not credible in Suva's view. If a strategy is implemented through a managed account, a list of restricted securities is provided to the manager.

Suva proactively expresses its view of the value of ESG integration in the investment process but leaves the choice between active engagement and exclusion to the managers it chooses. Ultimately, it is our belief that only a manager itself can decide on the effectiveness of an ESG approach given its own investment strategy, skillset and the culture in a particular country.

In order to evaluate a manager's true focus on the long-term aspects of investments, Suva uses interviews and examples of company research provided by the manager. Both tend to give good indications of how focused an investment manager truly is on understanding a company's long-term strategic issues and value drivers. Another valuable source when evaluating the credibility of ESG claims is a manager's proxy voting policy.

When it comes to the actual terms of a mandate, Suva aspires to include certain provisions in Investment Management Agreements (IMAs). For example, we negotiate the inclusion of Suva's restricted list to exclude companies from the investment universe. In the negotiation of fees, for performance fee structures Suva tries to incentivize managers with a long-term strategy.

When working with external managers, Suva emphasizes its efforts to invest responsibly during the due diligence and monitoring phases, as the terms of the mandate cannot compensate for a lack of long-term reasoning and commitment by a manager.


OO 12. Modules and sections required to complete

12.1. Below are all applicable modules or sections you may report on. Those which are mandatory to report (asset classes representing 10% or more of your AUM) are already ticked and read-only. Those which are voluntary to report on can be opted into by ticking the box.

Core modules

RI implementation directly or via service providers

Direct - Listed Equity incorporation

Direct - Listed Equity active ownership

Direct - Fixed Income

Direct - Other asset classes with dedicated modules

RI implementation via external managers

Indirect - Selection, Appointment and Monitoring of External Managers

Closing module

12.2. Additional information. [Optional]


Top