Responsible companies as investment objects
Through its investment activities, the Church Pension Fund wants to advance responsible business practices and the success of responsible companies. The following operational policies describe the Pension Fund’s view of corporate responsibility:
- Compliance with laws and international norms is the minimum requirement for corporate responsibility
The Church Pension Fund recommends that companies commit to the UN’s Global Compact initiative and comply with the OECD Guidelines for Multinational Enterprises. Corporate responsibility forerunners exceed the requirements of the norms and laws and create a foundation for future standards.
- Positive influence
In their use of natural resources, responsible companies consider the needs and rights of future generations and consciously minimise the harmful impacts of their operations on the environment and society at large. Forerunner companies harness market forces to create solutions for the challenges of sustainable development.
- Focusing on stakeholders
A company that is acting responsibly incorporates the expectations of its stakeholders into its own activities and business development. The basis for corporate responsibility is an understanding that the company has other tasks and obligations in society besides making a profit for the shareholders. Stakeholder-based management involves the perspectives of all stakeholders, as this is considered to be beneficial, in the long term, for the shareholders as well. The company is responsible for the positive as well as the negative impacts of its operations on those communities in which it operates. This means that the company is responsible for the activities of its co-operative partners as well as its network of subcontractors.
- Commitment of management
Corporate responsibility relies on a strategy in which responsibility is incorporated into the company’s management system and, through that, into the operational guidelines, job descriptions and, when necessary, profit steering and bonus systems. The commitment of the Board and top management is essential in order for the responsibility to penetrate the entire organisation. Training and internal communications ensure that the entire personnel is familiar with and recognises the requirements for responsible practices within the company and their own jobs.
- Climate change
Climate change is a global phenomenon that will have an unavoidable impact on the world’s societies and businesses in the future. In order to slow climate change, companies will have to reduce the generation of greenhouse gases in the atmosphere. Responsible companies prepare in advance for the risks and possibilities brought on by climate change and include the related actions into their overall strategy.
- Tax responsibility
A responsible company complies with legislation and its objectives when carrying out tax planning. The Church Pension Fund views it as important that tax payments reflect a company's financial activities and that taxes should be paid within the different countries of operation in accordance with the actual activities taking place there.
- Open communications
Corporate responsibility is credible if the company can prove that the requirements for responsibility have led to actual strategic changes. Words complement deeds: transparency and communications that meet the needs of the interest groups create trust. A company’s ability to hold tight to its values, correct its operations as needed and anticipate the risks related to the social, environmental and political conditions indicates good corporate governance and management practices.
An investor needs reliable and comparative information about companies in order to make informed investment decisions. The Church Pension Fund recommends that companies report to the Carbon Disclosure Project any measures they have taken to reduce the impact of their operations on climate change. Furthermore, companies are encouraged to report on their activities in accordance with the Global Reporting Initiative (GRI). The concept of open communications also includes the reporting of a company’s tax policies and tax footprint.