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 Controlling shall be responsible for policy updates.
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 contributes to an implementation of the intentions of 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 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 Committee for Responsible Investments (CRI). The committee consists of unit and branch managers at and around Jyske Capital Markets and the Private Banking unit of Jyske Bank. Jyske Invest is represented at CRI by an observer.
CRI plays a pivotal role in connection with the Jyske Bank Group’s handling of general issues relating to responsible and sustainable investment. In addition, CRI handles investment cases of fundamental importance (for instance at company and country level), issues relating to approaches, and exclusion lists.
Decisions made by CRI
are considered advisory services to Jyske Invest and are communicated by Jyske
Invest’s observer at CRI for further processing and potential implementation at
Jyske Invest.
As in case of any
other advisory services, it is possible for Jyske Invest to deviate from the
advice, 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
- ESG integration
- 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.
Basically, we have two main approaches when a
company is linked to a violation or suspicion of violation of international
norms and conventions: dialogue and exclusion.
Often, we find that dialogue and commitment are the most appropriate approach with a view to making the company in question change its behaviour. In cooperation with CRI, we follow ongoing cases and if, after a long period of time, no progress is seen, we will upon advice from CRI decide on exclusion and sale.
In addition, CRI 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 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%. This opt-out applies within own portfolio management, but it is to the widest possible degree endeavoured to comply with this with respect to all investments. 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 ”SRI” (Social Responsible Investment).
ESG integration 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.
Jyske Invest assumes corporate social responsibility in connection with the investments, which means that sustainability and environmental, social and corporate governance issues (ESG) are integrated elements in the investment decision-making processes.
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.
Reporting
At www.jyskeinvest.dk, www.jyskeinvest.com and www.jyskeportefolje.dk and in the associations’ prospectuses, you can on an ongoing basis stay informed of the sustainability profile of selected funds.
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.