ESG Policy – Sustainability
ESG stands for “Environmental, Social and Governance”, and represents a holistic approach to what is called sustainability.
Stavanger Asset Management AS (SAM) works to promote transparency, integrity, rights and responsibility in all parts of our business, with our employees, investors, stakeholders and customers.
At SAM, we create long-term value for our customers, and are focused on having our investment advisers take account of and inform customers about sustainability and any sustainability risks in our advice. In this context, we look to, among other things, UN Principles for Sustainable Investments (UNPRI), and the Norwegian Committee for Corporate Governance (NUES).
Sustainability risk is defined as environmental, social or governance-related events or circumstances that could have an actual or possibly significant negative impact on the investment’s value should they occur.
We have the opportunity to influence how the customers’ capital is allocated and which industries and companies that can obtain capital for their business. Thus, we also have a responsibility. Our view is that responsible action is both important and necessary to promote sustainable development.
SAM believes that a good focus on sustainable investments contributes to a higher long-term risk-adjusted return on investors’ funds by identifying unwanted risk factors as well as finding profitable opportunities.
Our ambition is to promote the EU’s work in achieving the obligations set by the Paris Agreement. This must be accomplished by SAM through seeking to reduce sustainability risks in its portfolios, as well as taking them into account in its investment advice. Our aim is to carry out efficient and successful work on sustainability.
Our principles for sustainability
SAM only wants to work with companies that live up to certain principles in terms of human rights, employee rights, the environment and anti-corruption:
• Have a good company culture
• Commit to complying with human rights and labor rights
• Commit to working for equality and equity
• Commit to working for a better environment
• Countering bribery and corruption
The principles are based on our core values and are taken into account in all business decisions.
Investment advisers must integrate sustainability risks in their investment advice, as well as assess negative consequences on sustainability factors. Furthermore, investment advisors must take into account the customers’ sustainability preferences when providing advice.
Investment advisers must also:
• Keep up to date and informed about developments regarding sustainability.
• Inform customers about the integration of sustainability risks and how environmental, social and corporate governance-related aspects are taken into account and ensure that the information is shared in such a way that the customer can make an informed decision.
• Provide transparent and accurate information about our products and services.
ESG is an integral part of SAM’s investment process, where we survey e.g. how the financial instruments are in accordance with general environmental, ethical and social norms. Here, we will particularly use UNPRI’s principles as a guideline.
It is of fundamental importance that financial instruments that SAM uses in its discretionary management and investment advice comply with international laws, norms and conventions.
SAM will therefore not invest in or recommend financial instruments that front or contain:
• Companies that contribute to serious and systematic violations of human rights and international law.
• Companies that manufacture or sell controversial weapons, including nuclear weapons, landmines, cluster bombs, biological and chemical weapons.
• Companies involved in serious environmental destruction.
• Companies involved in systematic corruption and financial crime.
• Companies that Norges Bank has excluded from the investment universe of the Government Pension Fund Global or are on the bank’s watchlist.
The work on sustainability within the Company
In order to meet the customers’ possible preferences in terms of sustainability, SAM implements the following measures:
• Provides advisers with training in environmental, social and business ethical aspects.
• Ensures that our advisers inform the customer about what sustainable investments are and what sustainability risks entail
• Ensures that our advisors identify the customer’s possible sustainability preferences and provide individually tailored advice based on the customer’s wishes
Employees at SAM must take environmental, social and business ethics into account when making purchasing decisions. When traveling on business, our employees must choose environmentally friendly alternatives such as public transport where appropriate.
Our remuneration policy
The remuneration policy stipulates that fixed salary, commission and any bonus for employees must be characterized by a long-term perspective and not encourage excessive risk-taking and not reinforce conflicts of interest. There must be a balance between fixed and variable remuneration and the variable remuneration must contain both quantitative and qualitative criteria for regulatory compliance, customer interest and quality of services. The criteria for variable remuneration must not be designed in such a way that a conflict arises with the Company’s duty to look after the customers’ interests. Our remuneration policy is considered to be compatible with the Company’s work with sustainability risk in management and advice to our customers.