During 2023, we clarified our approach to responsible investment and worked systematically to realise our goals. We conducted our annual ESG survey among our asset managers, allowing us to clarify, for instance, climate-related risks and opportunities as well as the asset managers’ commitment to the climate goals.
Of the asset managers who responded to the 2023 survey, all reported having a responsible investment policy in place that outlines the principles of responsible investment and their application in investment activities. This is an important step forward, since it is essential to us that ESG issues are taken into account in investment activities in a way that is appropriate to the asset manager’s investment strategy.
Results of the ESG survey
| 2023 | 2022 | 2021 | |
| Number of respondents | 58 | 42 | 47 |
| Response rate | 80% | 71% | 94% |
| ESG policy | 100% | 86% | 89% |
| PRI signatories | 83% | 83% | 83% |
| Climate policy | 62% | 62% | 43% |
| Carbon footprint calculation | 71% | 64% | 47% |
| Carbon neutrality target | 35% | 36% | - |
We introduced a renewed assessment framework for external asset managers, which facilitates the systematic assessment of the asset managers’ processes, resources and activities from responsible investment perspective as part of the investment decisions and continuous monitoring of asset managers. The assessment framework also serves as a tool and foundation for engagement with asset managers regarding the development of responsible investment activities.
Active ownership and engagement are a key component of responsible investment. Our primary goal, indeed, is to support positive change within companies and only as a last resort to exit the investment, in case engagement does not bring about the desired result. During the year, we engaged in an active dialogue with companies on sustainability issues and discussed, for instance, how sustainability has been integrated into their corporate strategy and business operations.
In the past few years, we have noted that biodiversity has been increasingly included in the investors’ agenda alongside climate change. Through co-operation and active dialogue, we want companies to become aware and take action to stop biodiversity loss, which is why we joined the Nature Action 100 initiative for investors. The aim of the initiative is to encourage companies to increase their ambition and action as a way of halting biodiversity loss.
Taking biodiversity issues into account in investment decisions remains quite challenging. During the year, we modelled the dependence and impact of our investment portfolio on natural capital and identified critical industries with regard to biodiversity loss. However, we still need commensurate indicators so that we can truly take biodiversity loss into account as part of our investment decisions. As indicators develop, we also see that they will offer attractive investment opportunities in terms of halting biodiversity loss.
We monitor the actualisation of responsible investment annually by reporting to the PRI. Based on our reporting, the PRI assesses our performance in responsible investment activities and scores our activities. The PRI does not give an overall rating, but different functions and asset classes are assessed separately. Our goal is to be above the median grade in all sub-ratings. As in previous years, we did well in the 2023 assessment, and our responsible investment activities in different asset classes are, generally speaking, more advanced than those in international benchmark companies. Out of a total of seven assessment categories in only one, passive equity investments, our rating was below the median. We also receive valuable information from the assessment with regard to the further development of our responsible investment activities.
Target 4: We are developing our investment activities towards an increasingly responsible direction
| Baseline 2020 | Actualised 2021 | Target 2022 | Actualised 2022 | Target 2023 | Actualised 2023 | Target 2024 |
| Two scores under the median | One score under the median | All scores no less than the median | No assessment by PRI | All scores no less than the median | One score under the median | All scores no less than the median |
Year 2024: green transition and active ownership
The year 2024 will be an interesting one in terms of responsible investment.
In December 2023, an historical and long-awaited decision was made at the COP28 UN Climate Change Conference, when the world’s nations jointly committed, for the first time, to make the transition away from fossil fuels. The decision states that the world needs deep, rapid and sustained emission reductions in order to achieve the 1.5°C target under the Paris Agreement by 2050. The conference also focused on tripling renewable energy and doubling energy efficiency by 2030.
The private sector plays an important role in the transition, which also opens up new opportunities for investors. For example, companies in the technology industry can benefit from the export and investment potential of green technologies, whereas business models relying on fossil fuels will come to an end in the future. Our climate roadmap and goals for a carbon-neutral investment portfolio enable us to navigate successfully in a changing world. We will continue to systematically monitor and gradually reduce the carbon footprint of our investment portfolio.
We updated our ownership policy principles towards the end of 2023, and in 2024, we will be able to truly put them into practice. We want to further clarify our expectations as an owner to ensure that the principles of good governance are implemented in the companies in which we have a holding, as we believe this will increase and safeguard the shareholder value in the long term. With the help of new tools and analytics, we will be able to more efficiently relay our expectations as part of Annual General Meeting voting and discussions with companies.