The Pension Fund has long-term commitment to promoting responsibility and a more sustainable future in its investment activities. The goal is to respect humans and the planet. The Pension Fund is a recognised partner in responsible investment.
Biodiversity, carbon neutrality, respect for human rights, planetary boundaries and impact are themes that are considered in the investment activities of the Pension Fund.
The Pension Fund takes into account sustainability factors, i.e. environmental, social and good governance issues, as well as sustainability-related themes in all its investment activities. Lutheran ethics, the Church Pension Fund’s strategy and the Guidelines for Responsible Investing guide the investment activities of the Pension Fund. The Church Pension Fund has also drawn up a Climate Strategy and Active Ownership Policy. The Church Pension Fund promotes responsible investment by including the sustainability factors in its investment activities and through several national, international initiatives, memberships and commitments. The Pension Fund has signed the UN-supported Principles for Responsible Investment. The Pension Fund is actively involved in raising awareness of responsible investment by acting openly, sharing information in various forums and collaborating with investors, asset managers and stakeholders.
The Church Pension Fund applies responsible investment methods in a versatile manner and utilises them across asset classes. The approach used depends on the asset class in question, and whether the investment is direct or indirect.
The sustainability analysis assesses the level of responsibility of investment objects according to various criteria, and this information can then be used to either favour or avoid certain companies. The working methods used in the sustainability analysis vary according to the asset class in question.
Norm-based screening
The norm-based screening analyses corporate sustainability in accordance with the UN Global Compact principles. The UN Global Compact principles are based on international UN and OECD standards and declarations. The Ten Principles of the Global Compact include fundamental values related to human rights, working life principles, the environment and anti-corruption activities. Every six months, the Church Pension Fund carries out a norm-based screening of the portfolio, as applicable. If significant violations of norms are found in the monitoring, the Pension Fund will initiate engagement measures.
ESG integration
ESG integration refers to taking environmental, social and governance factors into account in investment decisions. The Pension Fund’s investment activities consider the financially material impacts of environmental, social and good governance related factors on investment objects, in an integrated manner as part of the investment process. By considering essential factors related to responsibility and sustainability as part of the investment analysis, the Pension Fund promotes the return and risk prospects of the investment portfolio. The analysis pays attention to both positive and negative factors, as well as risks and opportunities. The Pension Fund favours asset managers who include responsibility in their investment activities and show pioneering behaviour.
Thematic investing
Thematic investing is based on favouring certain industries, activities or companies offering products or services that support sustainable development. The Pension Fund focuses on sustainable development themes that include climate change, forests and renewable forms of energy.
Exclusion
Exclusion from the investment universe excludes products or activities defined as controversial or unethical. The Pension Fund regularly reviews compliance with the exclusion criteria.
Through active ownership and engagement, the Church Pension Fund can bear its responsibility as an owner and ensure the long-term sustainable development of the value of its investment objects. The companies that the Pension Fund invests in must operate on a long-term basis and manage their risks according to their owners’ interests. By means of active ownership and engagement, the Pension Fund aims to encourage target investments and asset managers to develop their operations as more sustainable and responsible.
The means of active ownership and engagement of the Pension Fund include participation in general meetings, investment portfolio sustainability screening and international engagement discussions, corporate meetings, theme engagement, as well as participation in investor initiatives and communities.
Impact investing refers to investments in companies, organisations or funds, whose purpose is to make investment returns along with a significant social or environmental impact. Investment forms related to impact investing can be found in different asset classes. Impact investments in the Church Pension Fund include various types of microcredits, green bonds, renewable infrastructure investments and forest investments. The Pension Fund actively monitors the indicators of effectiveness in these investment objects. The Pension Fund actively monitors impact investing and the development of its different forms.
Ownership and engagement are an important part of the responsibility work of the Church Pension Fund. The Pension Fund promotes sustainability by directly engaging investment objects and asset managers. The Pension Fund is involved in several initiatives and communities promoting responsibility and a more sustainable future.
The Pension Fund is involved in several initiatives and communities promoting responsibility and a more sustainable future. Cooperation with asset managers, institutional investors and other stakeholders is an important part of the Pension Fund’s work on responsible investment.
The Pension Fund has signed the UN-supported Principles for Responsible Investment (PRI). Since 2008, the Church Pension Fund has committed to the Principles for Responsible Investment (PRI) and has developed its responsible investment activities in accordance with these principles. The Pension Fund reports annually on responsible investment.
The Pension Fund is a member of Finsif (Finland’s Sustainable Investment Forum) sustainable investment network. Finsif promotes sustainable investment in Finland. The Pension Fund has been involved in engaging Finsif’s activities since the association was established in 2010. Finsif organises events and discussion events related to topical themes and responsible investment.
In 2021, the Pension Fund joined the IIGCC (Institutional Investors Group on Climate Change). The community brings together institutional investors. The aim of the initiative is to steer capital towards low-carbon transition and to increase cooperation with companies, authorities and investors to ensure the management of the impacts of climate change.
The Pension Fund is part of Paris Aligned Asset Owners (PAAO), which operates under the IIGCC community. In 2021, the Pension Fund joined the Paris Aligned Investment Initiative Net Zero Asset Owner commitment of international institutional investors, whose signatories aim to achieve net-zero emissions from investment assets by 2050, at the latest, in line with the goals of the Paris Agreement on Climate Change. PAII (Paris Aligned Investment Initiative) is an initiative set up by the IIGCC (Institutional Investors Group on Climate Change).
Since 2007, the Pension Fund has supported the activities of the Carbon Disclosure Project (CDP) and its initiatives and campaigns. Through CDP, thousands of companies can report on nature-related issues.
The Pension Fund has also participated in separate campaigns through CDP. For example, the Pension Fund has regularly participated in the CDP Non-disclosure campaign, which encourages hundreds of companies to report through CDP surveys, in order to increase the quality and scope of sustainability data. The Pension Fund has also participated in the CDP Science-Based Targets campaign. The campaign has encouraged companies to set science-based climate targets to reduce emissions. As a signatory, the Pension Fund has been involved in encouraging more than 1,000 companies to set science-based emission reduction targets, in accordance with the Paris Agreement.
The Pension Fund is a signatory to the Climate Action 100+ initiative. The initiative is jointly coordinated by several international organisations. The aim of the initiative is to mitigate and adapt to climate change. Lobbying measures are targeted at the 100 companies producing the most greenhouse gases in the world. The aim has been to encourage companies to reduce greenhouse gas emissions and to strengthen their financial reporting and administration related to climate risks.
The Pension Fund is a signatory to the Nature Action 100 initiative. The aim of the initiative is to promote companies’ actions to halt biodiversity loss and to encourage companies to consider biodiversity as part of their business activities. In the initiative, the Pension Fund has been part of an investor group that directly engage a selected company in the forest sector.
The Pension Fund is a supporter of the PRI Advance initiative. Advance is an investor initiative coordinated by PRI, in which investors work together to promote social aspects and human rights. The aim of the initiative is to promote human rights and create positive change for workers, communities and society.
Biodiversity, carbon neutrality, planetary boundaries and impact are themes that are part of the Pension Fund’s nature and climate work. The Pension Fund identifies the risks and opportunities related to nature and the climate in its investment activities.
The strategic objective of the Church Pension Fund’s investment activities is to accumulate the assets to cover pension liabilities in a profitable, secure and responsible manner.
The Guidelines for Responsible Investing describe how environmental, societal and governance issues are taken into account in the Church Pension Fund’s investment activities across asset classes.
The Climate Strategy describes how the Pension Fund’s investment activities manage climate-related impacts and risks, while also considering any related opportunities. The Climate Strategy complements the Pension Fund’s Guidelines for Responsible Investing.
Ownership steering plays a key role in meeting the strategic objective of investment activities. The Active Ownership Policy describe the Pension Fund’s methods and expectations of active ownership and engagement as an owner. Active Ownership Policy complement the Pension Fund’s Guidelines for Responsible Investing.
