Mutual Fund LocalTapiola ESG Northern Corporate Bond
Sustainability-related disclosures, Summary
Publication date: 16.12.2022
Legal entity identifier: FI4000071212
This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.
The characteristics are promoted by including an ESG review in investment choices, by engaging businesses, by excluding certain businesses from the investment universe and by investing, in carbon intensive sectors, only in companies with the best carbon footprint. Additionally, the Fund’s underlying investee entities comply with good governance practices.
LocalTapiola Asset Management identifies the sustainability risks that are relevant to each investee entity, the likelihood of these risks and the magnitude of their effects as part of the sustainability analysis of an investee entity. A sustainability analysis is performed on businesses assessed to be of interest for investment, simultaneously with a traditional company analysis. LocalTapiola Asset Management reviews the sustainability risks, their likelihood and the magnitude of their effects on a continuous basis as part of our investment process and as part of the monitoring of investee entities and investment portfolios. Based on this review, an investment may be made, an investment may be increased/decreased, an investment may be abandoned and/or ways to engage may be exercised in order to manage the sustainability risks.
Development of the indicators describing how the financial product’s environmental and social characteristics perform is monitored in the context of the sustainability analysis of investee entities and in the context of performing the Fund’s sustainability reporting. New indicators to be followed may be introduced where adequately comprehensive and high-quality data are available.
Performance of the environmental impact characteristics of the financial product is measured by the following indicators: The Fund’s MSCI E score, the Fund’s carbon intensity and carbon efficiency, sectoral breakdown of the carbon intensities of the Fund’s investee entities, number of serious and extremely serious environmental infringements by the Fund’s investee entities (percentage of investee entities in the Fund).
Performance of the social, social performance and good governance characteristics is measured by the following indicators: The Fund’s MSCI S score, compliance by the Fund’s investee entities with the Principles of the UN Global Compact, gender balance of the members of the Boards of Directors of the Fund’s investee entities, number of serious and extremely serious social infringements by the Fund’s investee entities (percentage of investee entities in the Fund).
To measure the environmental and social characteristics, we mainly employ the official data that the investee entities report and that we collect through databases provided by external service providers (such as MSCI, Bloomberg) as well as directly during meetings with investee entities or in the context of the engagement processes. We strive to ensure the quality of the data by comparing the data provided by different service providers, by utilising public databases and by comparing the data reported by the investee entities with the control data. We utilise ‘raw data’ obtained from various data sources in our own databases and in calculation.
We mainly use official data reported by the investee entities, meaning that the official data remain incomplete for the investee entities that do not report the data. We strive to promote reporting and thus the data coverage by contacting investee entities and by requesting that the relevant sustainability indicators and sustainability harm be reported.
LocalTapiola Asset Management Ltd follows a systematic investment process that aims to find in the investment universe investee entities that meet the set criteria. Portfolio manager meetings decide on purchases and sales, to be executed by the portfolio manager responsible for a given portfolio.
Our key active ownership policies include meetings with the management of businesses, attendance at General Meetings, and engagement of businesses together with other investors. We believe that active ownership and constructive dialogue with investee entities provide a channel for positively engaging companies, thereby also stimulating a better return-risk ratio for investments in the long term.
The Fund has no benchmark index for measuring the performance of environmental or social characteristics.