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KLP

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.

Principle objective for asset management in KLP:

In its long-term investment strategy, KLP seeks to construct a portfolio that, with KLP's fiduciary duty in mind, can maximize returns, while adhering to risk limitations.

Key principles for asset management in KLP:

  • Long-term investment horizon and diversified portfolios
  • Large proportion of stable asset classes
  • High degree of market exposure (index management) and internal management
  • Continuous risk monitoring and management
  • Responsible and sustainable asset management

 

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]

Guidelines for KLP as a responsible investor, apply to all asset classes and all of KLP's investments, without exceptions.

01.6. Additional information [Optional].

          I confirm I have read and understood the Accountability tab for SG 01
        

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.

We are in an early fase developing a high-level road map how to approach climate risk, incorporate it into investment processes, risk control and strategies. Mapping climate risk by business area and asset class.

Objectives for the work on climate risk going forward:

  1. Increase knowledge about climate risk within the company and with KLP’s external stakeholders.
  2. Develop specific scenarios and climate risk data to assess significant risk factors and opportunities.
  3. Integrate climate risk into established investment and investment risk management processes in a more systematic way.
  4. Influence companies that KLP invests in to develop good climate risk management processes.
  5. Increase climate-friendly investments by NOK 6 billion per year.

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.

This is an on-going prosess, developing over time.

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

  1. Member of UNPFI TCFD working group to understand the climate change risks in the portfolios
  2. Collaborative engagement with institutional investors in Norway, engaging with Norwegian companies reporting in line with TCFD
  3. KLP worked with an environmental group on how to assess climate risk in industries: Report: https://www.klp.no/om-klp/samfunnsansvar/milj-og-klima/klimarisiko

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

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

02.3. Additional information [Optional].


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.

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios

04.1. Indicate if your organisation has a process for identifying and managing incidents that occur within investee entities.

04.2. Describe your process on managing incidents

KLP's portfolio companies and investment universe are continuously monitored for incidents. According to pre-defined escalation process, incidents are reviewed more closely, KLP engages in fact finding, and potentially initiates dialogue with portfolio company. Exclusion might be a last resort, if incident is severe or a symptom of systematic issues, and if company is not willing or able to handle the incident and risks.


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