Policy on responsible and sustainable investment
Objective
This policy describes the approach of the associations managed by Jyske Invest Fund Management A/S (hereinafter called JIFM) to responsible and sustainable investment. The policy covers Investeringsforeningen Jyske Invest, Investeringsforeningen Jyske Invest International, Investeringsforeningen Jyske Portefølje, Kapitalforeningen Jyske Portefølje and Kapitalforeningen Jyske Invest Institutional (hereinafter referred to as Jyske Invest).
This policy is based on Investering Danmark’s (Danish Investment Association) sector recommendation for the minimum handling of sustainability issues.
The policy is the overall policy and approach to the handling of responsible and sustainable investments. Jyske Invest offers funds whose sustainability elements have to a higher degree been integrated in the investment strategy. Fund-specific sustainability elements, including the fund’s sustainability-related information and the fund’s sustainability-related risks, are given in the associations’ prospectuses and investor information.
Update, monitoring, changes and approval
The policy is revised and updated as required and at least once a year.
The Head of Investment and Sustainability is responsible for updating this policy. .
The policy and changes to this are subject to approval by the Supervisory Board of the associations covered by it, and the Supervisory Board of Jyske Invest Fund Management A/S shall be informed in the event of changes.
Policy for responsible and sustainable investment
This policy supports the intentions at Jyske Invest to assume corporate social responsibility and promote sustainability through responsible and sustainable investments.
As the associations’ main distributor and adviser, Jyske Bank A/S, has signed the Principles for Responsible Investment (PRI), which is a joint declaration on corporate social responsibility in connection with investments and the fulfilment of six key principles for responsible investment. In addition, the Bank has signed the Principles for Responsible Banking and the UN Global Compact. On an ongoing basis, the Jyske Bank A/S Group and Jyske Invest assess and sign up for relevant initiatives that support sustainable and responsible investment.
On an ongoing basis, the Jyske Bank Group and Jyske Invest strive to strengthen their work on responsibility and sustainability in our investment processes and aim to an increasing degree to integrate relevant data on sustainability data systematically in the processes.
Governance structure for handling of sustainability
Jyske Invest’s primary investment adviser, Jyske Bank A/S, has established a Forum for Responsible and Sustainable Investments (FRSI). This forum consists of unit and branch managers at and around Jyske Capital, Jyske Markets and the Private Banking unit of Jyske Bank. Jyske Invest is represented in FRSI by an observer.
FRSI plays a pivotal role in connection with the Jyske Bank Group’s handling of general issues relating to responsible and sustainable investment. In addition, FRSI handles investment cases of fundamental importance (for instance at company and country level), issues relating to approaches, and exclusion lists.
Decisions made by FRSI are considered advisory services to Jyske Invest and are communicated by Jyske Invest’s observer in FRSI for further processing and potential implementation at Jyske Invest.
As is case of any other advisory services, it is possible for Jyske Invest to deviate from the advice provided, and Jyske Invest makes the final decisions concerning responsible and sustainable investments at Jyske Invest.
How to make responsible and sustainable investments
At Jyske Invest we implement the policy for responsible and sustainable investment through the following issues:
- Norm-based screening
- Activity-based screening
- Integration of sustainability risks in the investment decision process
- Active ownership (as described in further detail in JIFM’s policy for responsible and sustainable investment).
Norm-based screening
On an ongoing basis (and at least every quarter), Jyske Invest performs norm-based screening of the investments within its own portfolio management (own funds) to identify companies with sizeable violation of international norms or conventions. The criteria relate to a wide range of areas such as protection of the environment, labour rights and human rights. The screening is based on data from external business partners.
We often find that dialogue is the most appropriate approach to influence companies in to changing their behaviour. We will therefore typically enter a dialogue with companies at which a violation of the UN Global Compact principles, the ILO labour standards and the OECD Guidelines for Multinational Enterprises have been observed. If no progress has been made after some time, the company will be excluded from new investment and securities held in the company will be sold off. To be more specific, companies with which we have been in ongoing dialogue for two years, without any progress, will be reviewed for potential exclusion, and after four continuous years without progress, the company will be excluded, unless minor extraordinary circumstances apply.
In addition, FRSI renders advice as to which specific areas are to be included in the work on active ownership, which takes place in cooperation with other investors. This will, as a minimum, encompass international norms and conventions but can be supplemented with thematic issues, such as climate changes.
In order to identify violations, screening is performed of international norms and conventions such as:UN Global Compact
A UN initiative that lays down ten general principles for businesses’ work relating to the environment, anti-corruption, labour rights, human rights, etc.
OECD Guidelines for Multinational Companies
These lay down a number of principles on responsible corporate behaviour, of which the most important ones are human rights, the environment, working conditions and anti-corruption.
UN Universal Declaration of Human Rights
This lays down a ban on forced labour and discrimination, the right to freedom of speech, etc.
ILO labour market conventions on dignified conditions for workers
Conventions on the abolition of child labour, discrimination, forced labour and the right to organise and collective bargaining
Activity-based screening
Jyske Invest performs regular screenings of companies based on the activities they pursue. The associations exclude within own portfolio management (own funds) companies with activities that can be related to weapons regulated by conventions: Anti-personnel mines, cluster weapons, chemical weapons, biological weapons, and nuclear weapons (where the UN Treaty on the Non-Proliferation of Nuclear Weapons is violated).
Jyske Invest has in all funds decided not to invest in companies whose revenue is associated with the extraction of thermal coal and tar sand and where revenue related to this business exceeds 5%. In addition, investment in companies that initiate any development of new coal-fired power production are excluded.
The above-mentioned exclusions apply to in-house portfolio management, while also aiming to conform to all investments made, wherever possible . In a number of investment strategies, it has also been decided not to invest in companies whose revenue from coal-based generation of electricity exceeds 30%.
In addition, Jyske Invest offers funds that perform a higher degree of activity-based screening of the portfolios (exclusion strategy). In these funds, companies are excluded - within their own portfolio management (own funds) - according to specific criteria as appears from the prospectus. Such funds are called ”Special”.
Integration of sustainability risks in the investment decision process
Jyske Invest focuses on finding sustainable solutions, which go hand in hand with the objective of obtaining the best possible return and a wide investment universe.
The point of departure of our investments is to have access to a wide investment universe, while at the same time endeavouring to optimise the return or reduce the risk by taking the companies’ handling of sustainability risks into account. On an ongoing basis, we assess the companies’ strategy and objectives for a sustainable transition and include this in the investment decision-making processes.
Details on how Sub-funds integrate sustainability risks in investment decisions are outlined in the prospect or investor information as well as in JIFM’s politicy for integration of sustainability risks in investment decisions.
Special information on government bonds
Jyske Invest integrates sustainability and ESG issues in its investment decision-making process for government bonds - particularly with focus on government bonds issued by emerging market countries. Jyske Invest applies data from an external business partner, which assesses the countries in respect of ESG based on a number of issues relating to sustainability and ESG.
Jyske Invest complies with international sanctions, which for instance prohibit investment in specific countries or companies and exclude government bonds issued by countries comprised by EU sanctions against financial transactions with the country or against leading persons where it may be difficult to separate these and the state/central administration in the particular country.
Control
Norm- and activity-based screening tests are carried out on a daily basis via the JIFM’s control system. The same goes for controls of the integration of sustainability risks in the investment decision process.
In conjunction with the annual review of this policy, the Investment and Sustainability Manager drafts a general report to the Supervisory Boards on recent developments pertaining to sustainability; including the headlines of this policy.
Reporting
At www.jyskeinvest.dk, www.jyskeinvest.com and www.jyskeportefolje.dk or the prospectus and investor information issued for each Sub-Fund, to stay updated on sustainability-related information on all sub-funds that promote environmental and social characteristics, as set out in Article 8 or 9 of the Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector. .
The annual report reports on the recent development in the area and it appears how the individual funds were up to their sustainability criteria, cf. this policy and the information in the prospectus and the investor information.