Our overall approach to responsible investment is anchored in our Investment Strategy 2020–2026. The strategy sets out the framework and ambitions for how we integrate environmental, social, and governance (ESG) considerations into our investment policies, philosophy and processes.
More specifically, we operate under a policy that defines clear ESG principles for our non-philanthropic investment activities.
We continue to strengthen and evolve our approach. In recent years, we have allocated part of our portfolio to mission-related investments that support both our non-philanthropic and philanthropic strategies. We have also increased our ambitions to reduce the carbon footprint of our investments over time and have decided to divest from companies involved in tobacco production.
Screening and Engagement
We continuously screen our non-philanthropic investment portfolio to ensure alignment with our responsible investment framework. These screenings are carried out by our external partner, Sustainalytics, and currently cover all listed equities and bonds. Expansion of the screening activities will continue and ultimately it will cover all the asset classes.
As a responsible investor, we seek to drive positive changes. Together with other asset managers, we actively engage with companies to influence how they address issues such as compliance with legislation, labour rights, environmental impact, and corporate governance.
This approach means that we do not use negative lists or pre-screening in connection with our investment activities. As a result, either directly or via external asset managers, we can potentially invest in companies that we subsequently suspect of conflicting with the framework we have set for responsible investments.
When such concerns arise, we engage with the company through Sustainalytics. If, over time, our engagement fails to work, the ultimate consequence will be that we dispose of our investment. However, our fundamental belief is that active engagement is more effective than disengagement when it comes to addressing challenges and driving improvement.
Requirements for Asset Managers
We require our external asset managers to be signatories to the UN Principles for Responsible Investment (PRI), to implement comparable responsible investment processes, or otherwise demonstrate practices aligned with PRI standards.
We maintain ongoing dialogue with all external managers to ensure alignment with our ESG framework and closely monitor that they adhere to their own responsible investment policies and processes.