Sustainability and Corporate Governance Report 202
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IN-DEPTH REPORT – HANDELSBANKEN FONDER Engagement
activities in 2020 Dialogue We engage in proactive dialogue with the aim to influence companies to improve their sustainability performance, and we engage in reactive dialogue with companies that we assess are not living up to the international norms and conventions we support. We carry out engagement through direct contact with companies as well as in cooperation with other investors, often through global alliances for corporate dialogue. ESG – Dialogue and engagement Dialogues ahead of stock exchange listings In 2020, we conducted a dialogue with two companies ahead of their potential IPO. At this stage in which we act as potential investors, we are able to engage in a dialogue about the companies’ sustainability efforts and our expectations for their work and reporting. In these two cases, the issues in focus were the companies’ responsibility for ensuring human rights and our expectation of increased transparency regarding risks in the companies’ value chains. Environmental issues 43% Social issues 21% Corporate governance 7% Overlapping sustainability issues 29% A dialogue that led to divestment During the year, we attempted to enter into dialogue with a steel producer with the primary intention of getting the company to understand the importance of stepping up its emissions data reporting. Since the company has major emissions, we needed access to data in order to assess its performance. We also wanted to understand their strategy for reducing emissions going forward. The fact that the company did not respond to our request became a contributing factor in our decision to divest the company. Direct dialogue Direct dialogue is a dialogue that the fund managers conduct directly with the companies. In 2020, we conducted our own such dialogues with 39 companies. Here are some examples: Dialogues with salmon producers In 2020, we initiated dialogues with companies that produce salmon. The work began with a survey sent to eight companies that aimed to identify their work on material issues for the salmon industry. On this basis, the companies’ sustainability work was analysed and areas for improvement were identified. Dialogues were started with six companies. Most of the companies do focus on all key sustainability issues, but given the challenges and risks, continued development of their efforts is needed. These dialogues will continue in 2021. Dialogues with energy companies During the year, we engaged in dialogue with a Nordic energy company on its climate strategy. We expressed the desire for clearer objectives in relation to climate issues so that the company can qualify as a company in transition. Discussions are now underway in 2021. Pooled engagement Together with other investors, we participate in joint dialogues with companies. We also support dialogues within the framework of global alliances and industry initiatives. In 2020, we participated in 527 such dialogues. Here are some examples of alliances and initiatives we participate in: CLIMATE ACTION 100+ Climate Action 100+ is a five-year global alliance initiative linked to the Paris Agreement. Its aim is to get the companies that emit the most greenhouse gases to assume their responsibility and lead the transition to clean energy. Investors behind the initiative urge companies to fight climate change, reduce emissions and increase transparency. Within the framework of Climate Action 100+, we have actively participated in dialogue with two of the companies among the world’s biggest emitters. One company is an Asian cement company, and this dialogue resulted in a positive development in the form of improved reporting by the company. The dialogue continues, with the aim that the company will reduce emissions from its operations. PRI working group on sustainable palm oil Palm oil production is a sector with significant sustainability risks in terms of both the environment and working conInformation 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. 59