Guidelines for responsible investment
Responsible Investment Policy - Laerdal Invest
1. Background
The Laerdal groups’ goal is to help save one million more lives annually by 2030. The group has also set a sustainability strategy to contribute to sustainable development in the broader sense.
Laerdal Invest’s investments strategy sets the parameters for how the company’s investments are to contribute to the group’s goal. Laerdal Invest has a strategic impact investment portfolio with a focus on SDG 3 and 13, and a financial investment portfolio which aims to achieve the best long-term risk adjusted return.
Laerdal Invest holds the view that good long term financial returns depend upon sustainable economic, environmental and societal development.
Laerdal Invest invests in funds managed by external managers and acknowledges that there are different approaches to embedding responsibility and sustainability in fund management. When selecting managers, Laerdal Invest shall make a broad consideration of whether the manager’s approach to responsible investment and sustainability is credible and effective. The manager's approach to sustainability will be reviewed on an ongoing basis and action taken when necessary.
2. Principles and minimum requirements – process
Laerdal Invest wishes to ensure that investments are made in line with generally accepted norms for sound business conduct, such as the UN Global Compact.
The principles in the UN Global Compact are based on the Universal Declaration of Human Rights, ILO’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development and the UN Convention against Corruption.
The principles in the UN Global Compact cover:
Human Rights
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: make sure that they are not complicit in human rights abuses.
Labour
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: the elimination of all forms of forced and compulsory labour;
Principle 5: the effective abolition of child labour; and
Principle 6: the elimination of discrimination in respect of employment and occupation.
Environment
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: undertake initiatives to promote greater environmental responsibility; and
Principle 9: encourage the development and diffusion of environmentally friendly technologies.
Anti-Corruption
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
Managers in the financial investment portfolio shall have an established ESG policy and practice that reflects these principles.
It is preferable that managers in the strategic investment portfolio have an established ESG policy and practice that reflects these principles. If this is not the case, Laerdal Invest shall cooperate with the manager to support the establishment of a responsible investment policy and practice.
3. Principles and minimum requirements – product
Laerdal Invest shall not be involved in the production of tobacco or controversial weapons such as landmines, cluster munitions and nuclear weapons. For the financial investment portfolio this is addressed as described in section 4.
In the strategic investment portfolio Laerdal Invest shall in addition seek to achieve regulations in the Side Letter to avoid investment in the following:
- the manufacture, sale, distribution and/or marketing of weapons, artillery, or ammunition of any kind
- the manufacture, sale, distribution and/or marketing of pornographic products
- the manufacture, sale, distribution and/or marketing of (i) tobacco, including other products categorized as tobacco by the relevant authorities or (ii) hard spirits
- the manufacture, sale, distribution and/or marketing of cannabis unless such manufacturing, production and/or trade is solely for medical use
- the production of and/or trade in fossil fuels without carbon capture and use or storage
- the operation of casinos or other gambling facilities
- the research, development or technical applications relating to electronic data programs or solutions, which are specifically aimed at supporting any activity referred to above or are intended to enable illegal (1) access to electronic data networks or (2) downloading of electronic data.
4. Operationalisation and reporting – financial investment portfolio
Laerdal Invest shall take into account exclusions made by the Norwegian Government Pension Fund Global (SPU) in accordance with the prevailing Guidelines for the observation and exclusion of companies. Reasons shall be given for any deviations.
The portfolio shall be screened with the aim of identifying:
- Potential breaches of the SPU exclusion list and potential breaches of internationally recognized norms by companies not excluded by SPU.
- General sustainability profile of the portfolio such as ESG related data for the underlying companies
- The portfolio’s level of adaptation to net zero, the portfolio’s climate profile and an analysis of Laerdal Invest’s proportion of carbon emissions in the portfolio
Sustainability reporting is under development and metrics will have to be adapted and adjusted as new requirements and reporting are implemented. The Board shall address the reporting on responsible investments annually.
If an investment is not deemed compatible with Laerdal Invest’s principles for responsible investment, relevant information is to be gathered, and Laerdal Invest shall decide what steps are to be taken towards the manager. This will depend on the severity and systemic nature of the breach.
Actions that may be taken:
- Engagement with the manager to explanation of Laerdal Invest’s position
- Divestment if no agreement is reached
In general, engagement is preferable to divestment.