At Mandatum, sustainable development is an integral part of investment operations and it is taken into account in our investment decisions alongside financial aspects.  

Responsible investment means managing assets so that issues related to the environment, society and good governance (ESG aspects) are taken into account in the investment analysis, when making investment decisions and monitoring the investments, and when reporting on investments. Responsible investment also involves active ownership and engagement. Its goal is better risk management, improved returns on the portfolio and consideration for investors’ values. It supplements traditional financial analysis. 

Mandatum's approach

1. In the investment analysis, the aim is to identify and assess all material risks and opportunities related to responsibility and sustainability for each investment object.
   
   
2. The investment object analysis considers the impacts of sustainability factors on the company’s business and financial value. In addition to the business sustainability perspective, the analysis also includes an impact assessment.
   
   
3. One of the methods used in responsible investment is exclusion. Certain industries are considered to carry more sustainability risks and cause more adverse sustainability impacts than others. Investments in industries identified as sensitive are regularly monitored in order to identify and quantify any sustainability risks.
   
   
4. The monitoring of sustainability factors continues throughout the investment period.
   
   
5. Together with the investee company, their identified risks related to sustainability and responsibility are mitigated. We use pooled engagement especially if it is believed that it can be an effective means of achieving a desired change in the investee company.
   
   
6. Mandatum regularly releases sustainability reporting on its investment operations.

Mandatum has integrated sustainability analysis into the investment object analysis of each asset class, and it takes into account the special characteristics of each asset class. This is why sustainability analyses vary in different asset classes. Below are a few examples of Mandatum’s approaches.

Policies on sustainability risks

Mandatum invests its clients’ funds responsibly, and taking sustainability risks into account is a central part of the risk management process. Mandatum has included sustainability analysis in its investment processes and monitors all of its portfolios’ investees.

Read more: Mandatum’s policies on sustainability risks

Climate

Mandatum has chosen mitigating and adapting to climate change as one of the key focal areas of its investment operations. The carbon footprint of investments is a key indicator of responsible investment. The carbon footprint of investments is determined annually and monitored separately for each investment basket or fund and separately for other assets.

Development:

• The comparable carbon intensity of Mandatum’s unit-linked insurance client assets has decreased by close to 50 per cent from 2017 to 2021.
• The average carbon intensity of investments in 2021 was 202 tCO₂e/MEUR, which is 42 per cent less than the market indices.
• Equity investments were -35 per cent (126 tCO₂e/MEUR) and fixed income investments -27 per cent (262 tCO₂e/MEUR) in relation to the market indices.

Mandatum also strives to account for its investment operations’ climate impacts by phasing out coal and oil in its direct equity and fixed income investments. Mandatum’s goal is to phase out coal (i.e. companies that derive more than 5% of their revenue from coal) from direct investments by 2030 and oil (i.e. companies that derive more than 5% of their revenue from oil) by 2040.

Read more: Climate and the environment

Management of investments

Mandatum’s Responsible Investment Policy describes the responsible investment principles and guidelines of Mandatum Asset Management (MAM) and Mandatum Life Insurance Company Limited (Mandatum Life, hereinafter together Mandatum). The policy describes Mandatum’s commitment to responsible investment, the climate strategy for investments and the organisational structure and areas of responsibility. In addition, the policy explains the responsible investment strategies currently used, such as ESG integration and screening, active ownership and implementing responsible investments in fund investments and outsourced wealth management. The policy is reviewed and updated annually and approved by the MAM and Mandatum Life Boards of Directors.

Responsible Investment Policy

Mandatum complies with its policy concerning voting rights and engagement, which presents the judicial and regulatory requirements and the related measures that Mandatum follows in order to meet its obligations concerning shareholder engagement and the use of voting rights as prescribed in the Shareholder Rights Directive and other regulatory requirements concerning the issue.

Mandatum Asset Management’s Engagement Principles

Co-operation Partners

Mandatum’s sustainability work includes committing to different international principles and supporting initiatives, and promoting the sustainable development of the investment sector through partnerships with organisations and foundations.

Mandatum also works together with WWF Finland to promote responsible investing and to mitigate climate change. The collaboration, which began in 2017, results in concrete operating models and guidelines on how investors can lower the carbon dioxide emissions of their investments in practice. An investor’s climate guide was published during the collaboration.