Ownership and engagement are an important part of the responsibility work of the Church Pension Fund. The Pension Fund promotes sustainability by directly engage investment objects and asset managers. The Pension Fund is involved in several initiatives and communities promoting responsibility and a more sustainable future.
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 in 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.
The Pension Fund is involved in both direct and indirect engagement. In direct engagement, the Pension Fund attends annual general meetings and participates in company dialogue. In indirect engagement, an asset manager or consultant carries out the dialogue with the companies and participates in the annual general meetings on behalf of the Pension Fund. Direct engagement focuses on Finnish companies. The Pension Fund uses external experts to carry out its engagement on the international level.
The Pension Fund participates in the annual general meetings of domestic listed companies in cooperation with its asset managers. The Pension Fund annually negotiates with the asset managers regarding the upcoming general annual meeting season and related themes. The Active Ownership Policy also guide the annual general meeting work. A summary of the general meeting period is published annually.
In addition, many asset managers conduct proxy voting in equity funds. In practice, proxy voting means that the investor authorises the service provider to vote on their behalf at general meetings.
The Pension Fund screens the liquid equity and fixed-income portfolio twice a year. The screening provides an overall picture of the responsibility of the portfolio. A service provider specialising in responsible investment services is responsible for the screening. The analysis service enables the Pension Fund to identify norm-based breaches in the investment portfolio (environment, human rights, labour law and corruption), as well as to map sectors requiring special attention. The screening results and their processing are a permanent part of the Pension Fund’s asset manager meetings.
The screening results serve as the foundation for engagement activities. Through a service provider, the Pension Fund participates in engagement discussions with companies that have committed serious norm violations.
Personal meetings with company management or other representatives provide a good foundation for dialogue in a way that is not possible within the context of annual general meetings. The Pension Fund can participate in such meetings together with a consultant, asset manager or other owners. Dialogue can also be initiated as part of other events.
The Church Pension Fund participates in thematic engagement, or engagement, in which companies are engaged constructively, promoting responsibility and sustainable development. Several institutional investors and target companies are involved in engagement projects. Engagement activities are carried out with an external expert. Special themes of responsibility are selected for engagement activities, the aim of which is to develop the operating methods of companies. For example, themes related to biodiversity loss and the availability of clean water are topics of thematic engagement.
The Pension Fund is involved in several investor initiatives and communities promoting responsibility and a more sustainable future.
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 on responsible investment annually.
As a signatory of the PRI principles, the Church Pension Fund: 1. Integrates ESG aspects into investment research and decision-making processes 2. Acts as an active owner and applies ESG aspects to ownership practices 3. Promotes appropriate ESG reporting of investment objects 4. Promotes the adoption and introduction of the Principles for Responsible Investment in the investment sector 5. Cooperates with other investors to promote the introduction of the Principles for Responsible Investment 6. Reports on its activities and progress in implementing the Principles for Responsible Investment
The Pension Fund is a member of Finsif (Finland’s Sustainable Investment Forum) sustainable investment network. Finsif’s purpose is to promote 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 a low-carbon transition and to increase cooperation with companies, authorities and investors to ensure the management of the impacts of climate change.
PAII is an initiative set up by the IIGCC (Institutional Investors Group on 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.
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 is involved in encouraging companies to develop sustainability reporting related to climate, forest and water themes.
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 has encouraged 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 to the letters, 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. Engagement 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 has been 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.
