The sustainability of company performance may impact the ability to create long-term value for investors. Therefore, the Sector Asset Management Group (SAM Group) considers environmental, social, and governance (ESG) integration to be an important instrument to improve the risk-return profile of the investments made by its group companies through their collective investment schemes (investment funds) under management (the Funds).
The purpose of this ESG policy (the Policy) is to describe the approach of the SAM Group to integrating the consideration of ESG risks and value creation opportunities into the investment processes undertaken by its Funds.
This Policy has been developed by a working group consisting of representatives of the SAM Group, the investment managers, and the compliance function. The Policy has been reviewed and approved by the Board of Directors of the SAM Group. Any breaches to the Policy will be handled by the compliance function and the Board of Directors of the relevant SAM Group company in each case. The SAM Group will seek to update the Policy continually, as appropriate.
The SAM Group is in the process to become a signatory to the United Nations’ Principles for Responsible Investments (UN PRI).
For the purposes of this Policy, “material” ESG issues are defined as those issues that the relevant SAM Group company, in its sole discretion, determines to have the potential to substantially impact an organization’s ability to create and preserve economic, environmental, and social value for itself and its stakeholders.
The SAM Group structurally integrates ESG factors into the investment decision-making process across all asset classes. The focus is on ESG factors that are material. It is up to the investment managers, analysts, and others involved in the investment research and decision-making process to determine what weight these factors should be given in each case.
4. Investment process and monitoring
The SAM Group commits to consider material ESG issues in the course of its investment process and in the monitoring of portfolio investments to the extent reasonably practical, subject, in any event, to the provisions of the fund documents of the relevant fund under management, local laws and regulations, and to the duty of the SAM Group to seek to maximize the returns on investment for all investors. See also section 5, “Engagement and voting,” below with respect to active ownership of and influence on portfolio companies.
5. Engagement and voting
The SAM Group seeks to exercise its voting rights and engage with the companies in which its Funds are invested to make sure they are accountable and fulfill their obligations, including compliance with ESG principles, to shareholders and other stakeholders.
The SAM Group seeks to positively influence aspects of strategy, performance, risk, remuneration, environmental matters, and corporate governance with the belief, and to the extent, that such influence may benefit the investors.
6. Promotion and collaboration
To the extent practical, SAM Group will, individually and in cooperation with others, promote acceptance and implementation of ESG principles within the investment industry and contribute to enhancing the effectiveness of implemented ESG principles in said industry.
The SAM Group companies will report to their respective Boards of Directors with respect to ESG issues on an ongoing basis.
The SAM Group will make its reporting as a signatory to the UN PRI on an annual basis.