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Pareto Asset Management AS

PRI reporting framework 2020

You are in Strategy and Governance » Investment policy

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.

Our stated investment philosophy rests on several principles: 

* active management

* company focus

* a fundamental approach

* a long-term perspective

* concentrated portfolios

* we seek to invest in companies that have good quality operations and management, and a focus on ethics in both thought and action. 

The latter point is facilitated by having concentrated portfolios with long holding periods; we get to know very well the companies we invest in.

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]

Pareto Asset Management AS (PAM) works systematically with ethical considerations in the management of funds and discretionary mandates. PAM shall not make investments which constitute an unacceptable risk of investments contributing to unethical acts or omissions. Such contributions could reduce sustainability and long-term value creation.

In September 2014, PAM decided to formalise our commitment to social responsible investments by committing to the UN PRI (United Nations Principles for Responsible Investment). The principles were signed in November 2014 and PAM presented its first PRI report in March.

In 2016, PAM decided to further formalise its commitment by becoming a member of Norsif. Due to our strong presence in Sweden through a branch in Stockholm, it was logical for us to also join the Swedish sister organisation Swesif. In April 2018, our chief investment officer became a member of the Norsif board.

Due to our fundamental investment philosophy and a limited number of investments, it is our ambition to provide solid and transparent documentation of our portfolio management being in compliance with our guidelines for responsible investments.

General considerations

Our guidelines for responsible investments are founded on the guidelines used by the Norwegian Government Pension Fund, the United Nations Principles for Responsible Investments (PRI), as well as recognised principles and standards.

The current guidelines also state that precautionary measures shall be taken when investing in bio-technology, weapons, alcohol and gambling, meaning that ethical issues should be subjected to careful considerations before an investment can be made. This may also apply to other ethical issues.

In more general terms, environmental, social and governance issues, as well as technological changes, may affect how PAM views bans or additional precautionary measures when investing in other sectors than those explicitly being addressed by our current guidelines.

Negative screening

Our sustainability considerations roughly imply a process with two basic steps. First, we screen all investments on specific criteria. Second, companies subject to red flags in screening are put under scrutiny.

In our screening we have made a distinction between unethical/unsustainable products or production processes and companies with unethical/unsustainable conduct or behaviour.

In the first case, the question is whether the actual properties of the product or manufacturing process are negative. The company may exercise proper social responsibility, but the behaviour is still irrelevant if the product or manufacturing process warrants exclusion due to ethical considerations. In the second case it is the companies’ conduct, and not necessarily the products, that are negative.

The company also keeps a record of high risk companies.

The investment process

Each management team is responsible for the thorough assessment of ESG criteria before an investment is made. Likewise, they have a responsibility for ongoing monitoring so that they maintain preparedness for any ESG issues that are not necessarily visible or actualised when the investment is made. In the event of doubt, the case will be presented to the ethics committee.

Our approach to responsible investments covers all asset classes, and there are no exceptions to our policy.

01.6. Additional information [Optional].

          
        

SG 01 CC. Climate risk (Private)


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

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].

The prospectus of our Norwegian domiciled UCITS states the following. 

Pareto Asset Management works systematically on ethical considerations in the management of the fund. Pareto Asset Management shall not invest in companies which constitute an unacceptable risk of the fund contributing to unethical acts or omissions. Such contributions could reduce sustainability and long-term value creation.

Pareto Asset Management’s responsible investment guidelines are based on the guidelines of Statens pensjonsfond (the Norwegian Government Pension Fund). 

The prospectus of our Pareto SICAV states the following. 

Pareto Asset Management works systematically on ethical considerations in the management of the Sub-Fund. Pareto Asset Management shall not invest in companies which constitute an unacceptable risk of the Sub-Fund contributing to unethical acts or omissions. Such contributions could reduce sustainability and long-term value creation. 


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.

A conflict of interest may sometimes arise in connection with a responsible investment matter. 

Part of the ethics committee's work is to monitor the compliance of our guidelines for  responsible investments. This is done through the preparation of a biannual report, highlighting any issues discovered among the companies in which we are invested on behalf of funds and clients.

Sometimes the companies put under scrutiny or exclusion by the ethics committee may also be clients of Pareto Asset Management. Based on this a conflict of interest may arise. If so, this will be brought to the attention of our chief compliance officer.

As a matter of policy, we maintain a conflict of interest matrix detailing possible conflicts of interest.

03.3. Additional information. [Optional]

We have not had any such conflicts of interest in the reporting period. 


SG 04. Identifying incidents occurring within portfolios (Private)


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