Statement on integration of sustainability risks into investment process of Luminor Asset Management IPAS managed 2nd and 3rd pension pillar plans
Sustainability factors we consider in our investment process are environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.
For consideration of sustainability factors in our investment portfolios we classify investments as direct investments and investments in collective investment undertakings.
Companies are excluded from our direct investments and financing universe if they are:
Furthermore, we exclude entities from our future direct investments and financing universe if they are engaged in the following environmentally relevant activities:
Regarding collective investment undertakings we invest only in financial instruments issued by investment managers who have signed United Nations Principles for Responsible Investment (UN PRI). For investments in Alternative Investment Funds we seek adherence to UN PRI principles during the investment due diligence process.
Assessment of the likely impact of sustainability risks on the return of the investments
We believe occurrence of an environmental, social or governance event or condition could cause an actual or potential material negative impact on the value of investments in our managed pension plans.
Empirical and academic research have shown that sustainability factor exposures impact financial assets’ risk and return characteristics, e.g.:
Overall, considering sustainability risks in investment process is crucial to achieving high and sustainable long-term returns.
1 Ozone Depleting Substances (ODSs): Chemical compounds which react with and deplete stratospheric ozone, resulting in the widely publicised ‘ozone holes’. The Montreal Protocol on Substances that Deplete the Ozone Layer lists ODSs and their target reduction and phase out dates. A list of the chemical compounds regulated by the Montreal Protocol, which includes aerosols, refrigerants, foam blowing agents, solvents, and fire protection agents, together with details of signatory countries and phase out target dates, is available from the United Nations Environment Programme.
2 Reference document: Stockholm Convention on Persistent Organic Pollutants (POPs) as amended in 2009.
3 CITES: The Convention on International Trade in Endangered Species of Wild Fauna and Flora. A list of CITES listed species is available from the CITES secretariat.
4 Reference documents: Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and their Disposal; Regulation (EC) No 1013/2006 of 14 June 2006 on shipments of waste; and Decision C(2001)107/Final of the OECD Council concerning the revision of Decision C(92)39/Final on the control of transboundary movements of wastes destined for recovery operations.