Mandatum's policies on sustainability risks
Mandatum invests its customers’ funds responsibly, and sustainability risks form a key part of Mandatum’s investment and risk management process. Mandatum believes that, in the long run, the securities of companies and issuers who operate sustainably will yield better results as investment objects, given their more favourable growth prospects and more predictable cost development. For these reasons, Mandatum has integrated sustainability risks into its investment decision making process and monitors the investment also from the perspective of sustainability risks and factors.
Mandatum’s investment decisions take into account the adverse effects on sustainability factors in accordance with the regulation on sustainability‐related disclosures in the financial services sector (EU 2019/2088, hereinafter SFDR). This disclosure relates to Article 4(1) of the regulation.
More information on Mandatum’s approach to responsible investing can be found in our Responsible Investment Policy. Mandatum’s personnel are bound by this policy, and the policy is intended as a guide for those participating in investment operations to take sustainability risks and factors into account in their day-to-day activities. The policy is approved by the Boards of Mandatum Life Insurance Company and Mandatum Asset Management Ltd. The management groups of Mandatum Life Insurance Company and Mandatum Asset Management are responsible for its execution in each group company.
Adverse Sustainability Impacts Statement
Mandatum Life Insurance Company (LEI-code 743700YZJJL0X6MH2U02) and Mandatum Asset Management Company (LEI-code 743700CTALP9F3ZBBB71), hereinafter together Mandatum consider principal adverse impacts of their investment decisions on sustainability factors as described in this disclosure. This principal adverse impacts statement covers the period from 10 March 2021 to 31 December 2021, and it is reviewed annually.
Mandatum’s internal due diligence policies with respect to these adverse sustainability impacts are described below.
Identification and prioritisation of principal adverse impacts and indicators
- Mandatum has incorporated a sustainability analysis into its investment processes and monitors all investment objects in its portfolios.
- In liquid investments, the monitoring is continuous. In alternative investments, the assessment of the sustainability of the investment objects focuses on an analysis at the time the investment is made, and the investments are also monitored regularly in terms of sustainability.
- When analysing the risks of an investment object, Mandatum considers sustainability factors as part of the whole. In decision-making, Mandatum employs both negative and positive screening, taking into account the characteristics of different asset classes.
- Investments can also be made with an emphasis on certain sustainability themes, including, for instance, climate change and climate risk.
- Further information can be found in Mandatum's Responsible Investment Policy, which can be found here.
Principal adverse sustainability impacts and related actions
- Mandatum takes into account the SFDR in its investment processes.
- Direct equity and fixed income investments that are determined to promote environmental or social characteristics or to be sustainable investments as defined in the SFDR are subject to relevant restrictions and procedures, including stricter disclosure obligations.
- If an investment object in the portfolio no longer meets the criteria which account for principal adverse impacts, Mandatum will divest the investment within six months at the latest.
Shareholder engagement policies
- Mandatum’s voting rights and engagement policy sets out the legal & regulatory requirements that Mandatum will comply with in order to meet its obligations regarding shareholder engagement and the exercise of voting rights in accordance with the Shareholder Rights Directive and other relevant regulatory requirements. A copy of the voting rights and engagement policy can be found here.
Adherence to international standards and business codes
- In 2011, Mandatum signed the UN’s Principles for Responsible Investment (UN PRI), which requires Mandatum to incorporate sustainability factors into investment analysis and investment decision-making processes, as well as being an active owner and incorporating sustainability factors into its ownership practices.
- In 2015, Mandatum joined the Portfolio Decarbonization Coalition (PDC) network, which aims to reduce the carbon footprint globally, steer assets to companies with lower emissions and develop methods for reducing the carbon footprint of investments.
- In 2016, Mandatum signed the Montréal Pledge, through which the company commits to annually measure and disclose the carbon footprint of its investments. The carbon footprint of investments is reported on both in absolute terms and in relation to general market indices to make it more understandable and comparable with both the development in the industry and development over time.
In addition to the above, Mandatum takes into account the adverse impacts of sustainability risks for all its funds to the extent that such risks form an intrinsic part of other risks, such as market risk and operational risk.
Sustainability risk and remuneration
Mandatum maintains a remuneration policy which is consistent with, and promotes, sound and effective risk management. Mandatum does not promote risk taking that is inconsistent with the risk profile of the investment products managed by Mandatum. Mandatum has acknowledged that the integration of sustainability risks as well as considering the adverse sustainability impacts of its own operations are critical for the long-term success of Mandatum Group. Therefore, the remuneration structure includes measures to ensure that the integration of sustainability risks and adverse sustainability impacts are taken into account in the remuneration of relevant employees.