The objective of the Church Pension Fund’s risk management plan is to steer investment risk management. Good risk management requires the definition of risks and risk management methods, the allocation and diversification of risks, as well as monitoring. The purpose of the risk management plan is to determine the risks associated with investment activities for decision-makers, investment supervisors and other stakeholders. The risk management plan complements the annual investment plan.
The risk management process is diverse, and investment risks overlap. From the perspective of investment risk management, it is essential that professional risk management instructions are in use and that the investment activities are carried out by competent personnel. It is also essential that internal supervision controls and limits are in order. The objective of the risk management plan is also to determine the operating methods if risks are realised.
The most significant risks for the Pension Fund are related to investment operations. Investment risk management refers to the management of various market and counterparty risks. The Church Pension Fund strives to manage the overall risk level and uncertainties of investment operations, by allocating investment assets as widely as possible, across the geographical distribution and different asset classes. In addition, time diversification and sufficient diversification among asset managers are essential.
The climate- and nature-related work done by the Pension Fund is part of its investment strategy and risk management. The Pension Fund identifies the risks and opportunities related to nature and the climate in its investment activities. These risks and opportunities are taken into account in the Church Pension Fund’s investment strategy, strategic allocations, and investment object selections, and the Pension Fund also discusses these matters with companies, investment objects, asset managers and decision-makers.
