Stockholm (NordSIP) – Sampension, the manager of industry-wide pension schemes for white-collar employees of the Danish central government and Denmark’s municipalities – as well as the third largest pension company in Denmark – is to expand its policies and practice of responsible investment on the basis of climate change, human rights and Corporate and Social Responsibility, it announced in a press release. It will also henceforth broaden its role as an active investor. Among the next measures will be the incorporation of OECD guidelines for institutional investor CSR from 2018 onwards.
“We will now clarify our efforts within responsible investment,” said managing director Hasse Jørgensen. “We know from surveys that Sampension is generally perceived as a responsible company, but the extent to which this is true, the agendas we are concerned with, and the results we are obtaining within the area are unclear to the general public. We are therefore revamping both our analytical and communications efforts.”
Sampension has engaged in responsible investment for a number of years, having participated in the Institutional Investors Group on Climate Change since 2011 and the Carbon Disclosure Project since 2010. Since the 2015 Paris Accord, Sampension has also been working on integrating COP21 objectives in responsible investment from January 2017 on.
“Climate change is the subject we most often infuse into our critical dialogues with the companies we are invested in. Every fifth dialogue we have had has centred on climate change since we introduced systematic screening and engagement in 2009,” said CIO Henrik Olejasz Larsen.
Sampension cooperates with international rating bureau Vigeo Eiris on quarterly screening of Sampension’s investment universe.
“Vigeo Eiris works with a data bank stretching back 10 years, and they have produced 200 critical dialogues together with Sampension,” said Larsen. “This effort has resulted in marked changes in a third of our dialogues with companies. Dialogue works.”
Human Rights divestments
Human Rights is another topic that looms large in Sampension’s responsible investment policy, having spearheaded 31 critical dialogues on the subject, which received broad media coverage in January in connection with an NGO report criticising Danish pension funds’ investments in companies active in the West Bank. Sampension introduced a new, more explicit policy on the subject and consequently pursued a dialogue with individual clients on the matter.
“On the basis of our new policy, we have taken a closer look at whether there are companies in our investment portfolios that appear in Vigeo Eiris’ BIOL (Business in Occupied Lands) database,” Larsen said. “This resulted in two Israeli banks, Hapoalim and Leumi, as well as Heidelberg Cement and Bezeq being placed on our exclusion list for the financing of occupations and for the exploitation of natural resources and the establishment of telecommunications infrastructure in occupied territories.” Sampension is simultaneously pursuing a critical dialogue with six international companies about their possible involvement with activities in the West Bank that contravene internationally recognised principles.
A new policy of Active Ownership
To help ensure long-term returns, Sampension is also intensifying its efforts as an active investor and is seeking to push companies in its investment universe towards more responsibility and sustainability. From next year, Sampension will therefore systematically participate and vote in general assemblies for Danish OMX C25 companies, as well as vote in general assemblies for Danish and foreign listed companies, where Sampension represents over 3 per cent of the vote.
“In the case of internationally listed companies, Sampension will vote as it usually does on a more ad hoc basis where it can be done together with other large investors and through a network. We did this in the spring, for example, when we voted at the general assemblies of two international oil companies to impact their activities,” Larsen explained.
Sampension today has a total of 1,600 companies in its listed investment portfolio, of which around 40 are Danish. Despite being a small actor in relation to being able to affect the behaviour of companies, Sampension plays a larger role in relation to Danish companies, in light of its size as an institutional investor in Denmark.
“There needs to be proportionality, such that we are not throwing resources at activities with doubtful outcomes. It therefore makes most sense to exercise systematic voting in the Danish part of the portfolio. At the same time, we want to be involved directly, as opposed to using a middleman such as a international proxy voting service provider,” Larsen clarified.
Strengthening Sampension’s ESG Organisation
Responsible investment predominantly means incorporating ESG in the investment process. Sampension is set to redouble its efforts in these areas, as well as its analytical capabilities and communications shop. More resources will also be allocated to handle the increased focus on responsible investment in general, including increased dialogue with NGO’s.
“I do think we are a little behind in terms of communications,” says managing director Hasse Jørgensen. “We haven’t really communicated our activities as well as we could have. We are therefore preparing to increase our openness on ESG issues, as well as more comprehensive annual reporting in the form of an ESG report on the benchmarks we are working towards, the efforts we make and the results we are obtaining.”
One area of focus will be to incorporate OECD CSR guidelines for institutional investors in to Sampension’s responsible investment policies from next year on as a supplement to the regulations of the UN Global Compact and the UN PRI. Another area of continuous focus will be on climate change, and whether Sampension will be able to assess the combined climate impact of companies in all or parts of its investment portfolio, and whether it will be able to effectuate improvements in the area.
Images: (c) sampension.dk, Ditty_about_summer-shutterstock