Sustainability and Corporate Governance Report 202
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HOW WE WORK – HANDELSBANKEN FONDER Passive Manage
ment Passive Management In our passive management, we manage index funds, ETFs and passive solutions. Common to all these types of investments is that they aim to reflect and track a specific market index or strategy. Our fund managers’ main task is to ensure that the funds provide a return in line with their index or strategy, something that requires careful monitoring of corporate events, customer flows and index changes. Much of the work involves developing new index products and efficient management processes. In recent years, a major focus has been placed on aligning our index funds and passive mixed funds to sustainability targets. Since the funds are rules-based, the sustainability aspect that each fund takes into account is built into the funds’ index methodology and strategy. It is thus essential for us to choose indices and strategies that reflect our sustainability requirements. For example, we offer funds that: • Exclude companies involved in controversial sectors such as weapons and fossil fuels. • Include companies with high ESG ratings • Exclude and weigh companies so that the benchmark portfolio’s greenhouse gas emissions are aligned with the Paris Agreement’s climate goals. As index administrators, we are long-term owners and have holdings in thousands of companies worldwide. The companies we invest in have made varying progress in their sustainability efforts, so it is crucial to try to engage with them to improve on this front. We accomplish this mainly through dialogue together with other investors, as well as through alliances, industry initiatives and participation in investor networks. Handelsbanken Fonder also drives engagement through voting at AGMs and involvement in nomination committees. “ We are taking active steps to get more indices with sustainability criteria on the market. In 2020, we strongly focused on developing EU Paris-Aligned Benchmarks together with our index provider, Solactive, for our own index funds.” Emma Viotti, Head of Passive Management Information about risk Past performance does not predict future returns. The value of the money invested in the fund can increase or decrease and there is no guarantee that all of your invested capital can be redeemed. The fund’s prospectus (“Informations broschyr”), fund rules and KIID are available at handelsbanken.se/funds. 15