vff@volvo.com+46 31-66 12 10Forms and DocumentsSustainability-related documents

Sustainability-related information

 

Summary
On March 10, 2021, a new EU regulation entered into force (the so-called disclosure regulation) which means that financial market participants must inform about how sustainability is taken into account when investing in financial products. The aim is to create a more transparent financial market and minimize green washing.

VFF Pension provides an additional occupational pension for Volvo employees. VFF Pensions aims to have a stable, responsible and sustainable return, high customer satisfaction and a responsible, sustainable and efficient organisation. VFF Pension’s strategy for the area of sustainability is to continue to integrate sustainable investments in the management that strives to be in line with the Paris Agreement and the UN’s global sustainability goals, and to convey the message of sustainable investment strategy to our customers. For VFF Pension, it is important to be involved and influence the future of this planet with the help of the placements and choices that the association makes when investing capital.

Long-term financial results are also an essential aspect of sustainability for our entire business and to maintain the trust of our policyholders and the insured. In order to indicate the direction of sustainability for our insurance products, VFF Pension’s board has established the Sustainability Policy, Investment Guidelines, Policy document for benefits and Policy document for risk management.

Here you will find all our Sustainability-related documents

Promotion of environmental and social characteristics
VFF Pension’s insurance products promote environmental or social characteristics, but do not aim for sustainable investment. This means that investments are made in funds that have a high level in Environmental, Social and Corporate Governance factors (ESG) and must, if possible, strive to aim for the Paris Agreement and/or the UN’s global sustainability goals. In this way, the products contribute to responsibility for labor law, society and the limitation of climate change as well as adaptation to climate change.

Integration of sustainability
The investment strategy for sustainability means that;

 

    • We make an assessment of whether the asset managers’ handling of sustainability issues is in line with our sustainability policy and investment guidelines before investment takes place.

    • We select funds whose companies have a high ESG level and, if possible, strive towards the Paris Agreement and/or the UN’s global sustainability goals.

    • We focus on ESG risks that are considered financially material and which can thus affect an investment risk and return both positively and negatively. We do this by selecting funds that invest in companies that do not comply with international standards for environmental protection, human rights, labor law or anti-corruption.

    • We aim not to invest in funds that invest in companies involved in controversial weapons and companies whose turnover can be derived to pornography or tobacco to 5% or more.

    • We aim not to make investments in funds that invest in companies whose income can be derived to 5% or more from fossil fuels including coal.

    • We continuously monitor and evaluate the asset managers’ sustainability work.

    • We actively work with influence dialogue with asset managers who do not meet the above-mentioned criteria for sustainability.

VFF Pension follows up and checks the environmental and social characteristics of the insurance products at least once a year for selected sustainability indicators. The assurance of methods, data sources and limitations for sustainability indicators lies with an external supplier, ISS Ethix.

VFF Pension integrates sustainability into the investment process by making sustainability criteria part of VFF Pension’s due diligence process.

Commitment
VFF Pension’s commitment consists of working actively with influence dialogue with the asset managers whose funds invest in companies that do not meet VFF Pension’s criteria for sustainability.

No targets for sustainable investment
The insurance products promote environmental or social characteristics, but do not aim for sustainable investments.

The environmental or social characteristics of the financial products
The environmental or social characteristics of the insurance products consist of the fact that the companies in which the funds invest must have a high ESG level and must, if possible, strive to aim for the Paris Agreement and/or the UN’s global sustainability goals. In this way, the insurance products contribute to responsibility for labor law, society and the limitation of climate change as well as adaptation to climate change.

Investment strategy
The insurance products’ investment strategy is based on continuing to integrate sustainable investments into management that strives to be in line with the Paris Agreement and the UN’s global sustainability goals. This means that;

    • We make an assessment of whether the asset managers’ handling of sustainability issues is in line with our sustainability policy and investment guidelines before investment takes place.

    • We select funds that have a high ESG level and that aim at the Paris Agreement and/or the UN’s global sustainability goals.

    • We focus on ESG risks that are considered financially material and which can thus affect an investment risk and return both positively and negatively. We do this by opting out of fund investments that invest in companies that do not comply with international standards for environmental protection, human rights, labor law or anti-corruption. Expressed in;
      –  The United Nations Global Compact
      –  OECD Guidelines for Multinational Enterprises
      –  The UN Guiding 31 Principles on Business and Human Rights.
      – ILO Tripartite declaration of principles concerning multinational enterprises and social policy.

    • We aim not to invest in funds that invest in companies involved in controversial weapons and companies whose turnover can be derived to pornography or tobacco to 5% or more.

    • We aim not to make investments in funds that invest in companies whose income can be derived to 5% or more from fossil fuels including coal.

    • We continuously monitor and evaluate the asset managers’ sustainability work.

    • We work actively with influence dialogue with the asset managers who do not meet the above-mentioned criteria for sustainability.Share of investments


      A sustainable investment is, as defined in the so-called Disclosure Regulation, an investment in economic activity that contributes to an environmental or social goal, provided that the investment does not cause significant damage to any other environmental or social goal and that the investment objects follow good governance practices. *VFF Pension’s insurance products contain sustainable investments, but the insurance products have no commitment to a minimum proportion of sustainable investments. Monitoring of environmental or social characteristics
      a) VFF Pension has an agreement with Institutional Shareholder Services Ethix AB (ISS Ethix). ISS Ethix is a service provider with 25 years of experience in research and rating in the ESG area. VFF Pension follows up and checks the financial product’s environmental and social characteristics at least once a year. The asset management department at VFF Pension reviews the funds’ holdings using the ISS Ethix portal DataDesk.b) The sustainability indicators that are followed up and controlled are the following;
        • Compliance with the international standard UN’s Global Compact.
        • Compliance with the international standard OECD guidelines for multinational companies.
        • Adherence to the international standard the UN’s 31 guiding principles on business and human rights.
        • Compliance with the international standard ILO Triparate declaration of principles concerning multinational Enterprises and social Policy.
        • Involvement in controversial weapons such as anti-personnel mines, cluster munitions, chemical weapons, biological weapons or nuclear weapons.
        • Companies whose turnover to 5% or more can be derived from the production of tobacco and pornography.
        • Companies whose revenues to 5% or more can be derived from fossil fuels.

      c) Regular checks of methods and data sources as well as the ISS Ethix DataDesk portal are carried out by ISS Ethix.

      Methods
      Our method of measuring the promotion of environmental and social attributes is carried out through measurements of our funds’ holdings. The measurements take place in the ISS Ethix DataDesk tool, where the funds’ holdings are reviewed based on defined sustainability indicators. The sustainability indicators used are;

        • Compliance with the international standard UN’s Global Compact.
        • Compliance with the international standard OECD guidelines for multinational companies.
        • Adherence to the international standard the UN’s 31 guiding principles on business and human rights.
        • Compliance with the international standard ILO Triparate declaration of principles concerning multinational Enterprises and social Policy.
        • Involvement in controversial weapons such as anti-personnel mines, cluster munitions, chemical weapons, biological weapons or nuclear weapons.
        • Companies whose turnover to 5% or more can be derived from the production of tobacco and pornography.
        • Companies whose revenues to 5% or more can be derived from fossil fuels.

       

      Data sources and data processing
      Data sources used to measure environmental or social characteristics are largely based on public data presented by the companies themselves, such as in:

        • Corporate reporting such as annual reports
        • Company policies
        • Reporting to authorities

      In addition, data is obtained from several other sources, such as the media, social media, etc. The general rule is that the data must be publicly available.

      To ensure data quality, ISS Ethix carries out regular updates according to schedule in combination with ad hoc updates when necessary.

      Transparency is an important part of ISS Ethix’s work, and they present their methodology for the reports they produce on their website.

      For the latest information on ISS methodology for data, see the ”Data Collection, Verification & Update Procedures” 

      Limitations of methods and data
      Data coverage for sustainability information is high for the companies our funds invest in. For missing data, ISS Ethix’s approach is different depending on ISS Ethix’s services. For ESG Country Rating, Governance QualityScore, Norm-Based Research, Controversial Weapons and Voting Analytics, no estimated data is used. For ESG Corporate Rating, Sector-Based Screening, Energy & Extractives, SDG Impact Rating and SDG Solutions Assessment, Carbon Emissions Data and Climate Scenario Analysis may contain estimated data. However, data is only estimated based on clear rules to ensure that there are well-founded assumptions. This differs from the sometimes-occurring methodology of using an industry average for companies that do not report sustainability information, which can provide misleading data, and can provide incentives not to present data for low-performing companies. For the latest information on ISS’s methodology for limitations in data, see the section ”Limitations to Methodologies & Data”  on their website.

      Due diligence
      VFF Pension integrates sustainability into the investment process by including sustainability criteria that need to be met in VFF Pension’s due diligence process. The due diligence process for the underlying assets of the insurance products means that when choosing external asset managers, VFF Pension must collect information on which ethical criteria the asset manager applies, how the asset manager works to integrate ESG factors and financial factors, and how aligned the asset manager is with the Paris Agreement and the UN global sustainability goals in their investment process. External asset managers’ criteria for sustainability are followed up and checked at least once a year to ensure that the asset manager lives up to VFF Pension’s criteria for sustainability.

      Engagement strategies
      VFF Pension’s engagement strategies mean that information is provided and dialogue is held with asset managers with the aim of primarily influencing the companies, via the asset managers, to a change rather than excluding the companies. In cases where the advocacy work is not complete, it is VFF Pension’s working committee that must decide whether a company/fund/manager should be excluded or not. Strategies for shareholder engagement are handled by the asset managers and reported on the respective asset managers’ website.

      Selected reference value
      The insurance products do not have a specific index as a reference value for compliance with the environmental or social characteristics promoted.

       

 

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