Mandatum Life’s policies on sustainability risks

Mandatum Life’s policies on sustainability risks

Mandatum Life invests its customers’ funds responsibly, and sustainability risks form a key part of Mandatum Life’s risk management process. Mandatum Life believes that, in the long run, the securities of companies and issuers who operate sustainably will yield better results as investment objects, thanks to their more favourable growth prospects and more predictable cost development. For these reasons, Mandatum Life has integrated sustainability risks into its investment decision making process and monitors the investment also from the perspective of sustainability risks and factors.

More information on Mandatum Life’s approach to responsible investing can be found in our responsible investment policy. Mandatum Life’s personnel are bound by the Responsible Investment Policy. 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 Investment Products Management Group, chaired by Mandatum Life Insurance Company CEO is responsible for its execution.

Adverse Sustainability Impacts Statement

Mandatum Life Insurance Company (LEI-code 743700YZJJL0X6MH2U02) and Mandatum Life Investment Services Company (LEI-code 743700CTALP9F3ZBBB71) hereinafter together Mandatum Life consider principal adverse impacts of their investment decisions on sustainability factors as set out below.

This principal adverse impacts statement covers the period from 10 March 2021 to 31 December 2021.

Investment decisions made by Mandatum Life can currently take into account the adverse impacts of its investment decisions on sustainability factors as defined in the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (“SFDR”).

Where an investment product offered by Mandatum Life does not promote environmental or social characteristics or have sustainable investment as an objective, Mandatum Life considers that the best interests of the investors are served by following the investment objectives and policies of the relevant investment products.

Where an investment product promotes environmental characteristics, promotes social characteristics, or has sustainable investment as an objective, Mandatum Life will ensure that sustainability risks and principal adverse impacts of investment decisions on sustainability factors in relation to the investment objective are considered in accordance with Mandatum Life’s Responsible Investment Policy.

In particular Mandatum Life’s internal due diligence policies with respect to those adverse sustainability impacts include:

Identification and prioritisation of principal adverse impacts and indicators

  • Mandatum Life has incorporated a sustainability analysis into its investment processes, and monitors all investment objects in its portfolios.
  • In liquid investments, the monitoring is continuous, and in alternative investments, the assessment of the sustainability of the investment objects focusses on an analysis at the time the investment is made, but the investments are monitored regularly also in terms of sustainability.
  • When analysing the risks of an investment object, Mandatum Life considers sustainability factors as part of the whole. In decision-making, Mandatum Life employs both negative and positive screening, taking the special characteristics of different asset classes into account.
  • Investments can also be made with an emphasis on certain sustainability themes, for instance, climate change and climate risk.
  • Further information can be found in Mandatum Life's Responsible Investment Policy, which can be found here.

Principal adverse sustainability impacts and related actions

  • Mandatum Life 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 has been amended to take account of principal adverse impacts, Mandatum Life will divest the investment within six months at the latest.

Shareholder engagement policies

  • Mandatum Life follows its voting rights and engagement policy which sets out the legal & regulatory requirements, as well as the related actions, which Mandatum Life complies with in order to meet its obligations with respect of shareholder engagement and 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 Life signed the UN’s Principles for Responsible Investment ("UN PRI"), which requires Mandatum Life 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 Life 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 Life 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, for all its Funds Mandatum takes into account the adverse impacts of sustainability risks 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 Life maintains a remuneration policy which is consistent with, and promotes, sound and effective risk management. Mandatum Life does not promote risk taking which is inconsistent with the risk profile of the investment products that Mandatum Life manages. Mandatum Life has acknowledged that integration of sustainability risks as well as considering adverse sustainability impacts of its own operations is are critical for the long-term success of Mandatum Life Group. Therefore, the remuneration structure includes measures to ensure that the integration of sustainability risks and adverse sustainability impacts is are taken into accordance account in the remuneration of relevant employees.