By working with sustainability in a structured way, we can identify the companies that are well equipped for the challenges of the future. To that end we have developed a framework for responsible investments consisting of six key resources:
1. Commitments and collaborations - for instance membership in PRI, UN Global Compact and Swesif and informal collaborations with other investors.
2. Responsible Investment Board - Sets the broad framework and ensures proper implementation of ESG-factors in the management of the funds and serves as a governing body for company engagements.
3. Training and incentives - All portfolio managers, analyst and sales staff are educated on ESG-related issues. The responsibility to incorporate ESG-factors is clearly articulated in all portfolio managers job descriptions and instructions. Furthermore, all portfolio managers have annual goals related to ESG that are linked to variable salary.
4. Screening and sector exclusions - We require all holdings to comply with international norms, such as the UN Global Compact and our funds also exclude certain sectors such as weapons and tobacco production. Holdings are screened prior to investment with ongoing monitoring and bi-annual screenings from an external provider.
5. Internal analysis, CF THOR - Fundamental ESG-analysis incorporating both qualitative and quantitative measures using our proprietary tool, CF THOR. This analysis is performed on all holdings, both bonds and equities and its outputs are integrated in the financial analysis, for instance influencing views on future revenues and costs for investee companies.
6. Shareholder engagement - We are responsible owners which include voting on annual general meetings, serving on board nomination committees and engaging with the investee companies. We distinguish between reactive dialogues which typically happen after we are notified of potential non-compliance with international norms and proactive dialogues to express our opinions and expectations on specific ESG issues, or encourage our holdings to be more structured in their sustanaiblity work and integrate sustainability into all aspects of their business.