Mandatum's policies on sustainability risks

Mandatum's policies on sustainability risks

Mandatum (Mandatum plc together with its subsidiaries, also herein after referred to as Mandatum Group) invests its customers’ funds responsibly, and sustainability risks form a key part of Mandatum’s investment operations, investment advice and risk management process.

Sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. Mandatum believes that, in the long run, the securities of companies and issuers who operate sustainably will yield better results as investment objects, given their more favourable growth prospects and more predictable cost development. For these reasons, Mandatum has integrated sustainability risks into its investment decision making process and monitors the investment also from the perspective of sustainability risks and factors in accordance with the principles described in this page. In addition to the investment operations, these principles apply to investment advice. Mandatum Asset Management Ltd takes client’s sustainability preferences into account when providing investment advice and seeks to provide personal recommendations meeting the client’s sustainability preferences.

More information on Mandatum Group’s approach to responsible investing and sustainability risks can be found in our Responsible Investment Policy. Mandatum’s personnel are bound by this policy, and the policy is intended as a guide for those participating in investment operations to take sustainability risks and factors into account in their day-to-day activities. The policy is approved by the Boards of Mandatum Life Insurance Company, Mandatum Asset Management Ltd and Mandatum AM AIFM Ltd of which management groups are responsible for its execution in each group company.

Principal Adverse Impacts on Sustainability Factors

Statement on principal adverse impacts of investment decisions on sustainability factors (Mandatum Asset Management Ltd)

Mandatum Asset Management Ltd (“MAM”, LEI 743700CTALP9F3ZBBB71) considers principal adverse impacts (“PAI”) of its investment decisions on sustainability factors in accordance with Article 4(1) of the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (“SFDR”). A detailed statement on principal adverse impacts is published on the company’s website annually by 30 June. The latest statement covering the reference period from 1 January to 31 December 2023 can be found here.

The previous statement (Mandatum Life Insurance Company Limited) covering the reference period from 1 January to 31 December 2022 can be found here.

Identification and prioritisation of sustainability risks

Mandatum has incorporated a sustainability analysis into its investment processes and monitors investment objects in its portfolios in accordance with the Responsible Investment Policy and product-specific criteria.

In liquid investments, the monitoring is continuous. In alternative investments, the assessment of the sustainability of the investment objects focuses on an analysis at the time the investment is made, and in relation to wide range of products the investments are also monitored regularly in terms of sustainability.

When analysing the risks of an investment object, Mandatum considers sustainability factors as part of the whole. In decision-making, Mandatum employs both negative and positive screening, taking into account the characteristics of different asset classes.

Investments can also be made with an emphasis on certain sustainability themes, including, for instance, climate change and climate risk.

Further information on sustainability  risks and factors can be found in Mandatum's Responsible Investment Policy, which can be found here. Consideration of sustainability  risks and factors vary between asset classes and products and you can find more information in the official product documentation. Mandatum’s product portfolio also includes products that do not take sustainability risks or factors into account.

Shareholder engagement policies

Acting as Mandatum’s asset manager Mandatum Asset Management Ltd applies its Engagement Principles describing the legal and regulatory requirements complied by Mandatum Asset Management Ltd in order to meet its obligations regarding shareholder engagement and the exercise of voting rights in accordance with the Shareholder Rights Directive and other relevant regulatory requirements. A copy of the voting rights and engagement principles can be found here.

Sustainability risk and remuneration

Mandatum maintains a group-wide remuneration policy which is consistent with, and promotes, sound and effective risk management. Mandatum does not promote risk taking that is inconsistent with the risk profile of the investment products managed by Mandatum. Mandatum has acknowledged that the integration of sustainability risks as well as considering the adverse sustainability impacts of its own operations are critical for the long-term success of Mandatum Group. Therefore, the remuneration structure includes measures to ensure that the integration of sustainability risks and adverse sustainability impacts are taken into account in the remuneration of relevant employees.