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Mutual Fund LocalTapiola Sustainable Positive Impact Bond

Sustainability-related disclosures, Summary

Publication date: 11.5.2023

Legal entity identifier: 743700NUZHA6YMHS8Y78

Where applicable and with due consideration of the available information, the Fund’s investment decisions take account of the principal adverse impacts on sustainability factors.

The Fund’s sustainable investment objective for the majority of the Fund’s investments is to exercise a positive impact on climate change mitigation and, for some of the investments, to exercise a positive impact on achieving the UN’s Sustainable Development Goals.

The Fund mainly invests in green bonds, in social and sustainable development bonds and in businesses that, on the basis of a sustainability analysis by LocalTapiola Asset Management, are assessed as having a positive impact on climate change mitigation or on achieving the Sustainable Development Goals.

Development of the indicators describing achievement of the financial product’s sustainable investment objective 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.

Achievement of the Fund’s sustainable investment objective is measured by the following indicators:

Distribution of the Fund’s investments by type of bond (into so-called green, social and sustainable development bonds); distribution of the Fund’s investments into sustainability themes (such as energy efficiency, renewable energy) influenced through the investments; level of the emissions avoided through projects funded by the Fund’s bond investments, broken down by the issuer’s sector; number of serious and extremely serious environmental infringements by the Fund’s investee entities (percentage of investee entities in the Fund); 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 the investee entities in the Fund).

To measure the sustainable investment objective, 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, Upright Project) as well as directly during meetings with investee entities or in the context of the engagement processes. We do not employ any estimates or averaging to measure characteristics. To calculate the indicators, we employ a standardised method of calculation whenever one is available.

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. We strive to promote introduction of standardised indicators through means such as by supporting reporting initiatives, including the TCFD. Additionally, official data are complemented with data obtained during meetings with investee entities and through the engagement processes, as well as being supplemented by the portfolio managers’ knowledge of the relevant investee entity and industry, which knowledge is utilised in the sustainability analysis of the investee entities. The above measures ensure that the limitations will not hinder the achievement of objectives.

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.

Read LocalTapiola Asset Management Ltd’s engagement policy described in the corporate governance standards from here (pdf) (in Finnish). 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.