Page 16 - Seafarers---_Pension_Fund_Annual_Report_2021

Annual Report of the Board
Seafarers’ Pension Fund 2021 Annual Report
16
provides additional information about our approach to responsibility
and sustainability issues.
Investments
The data required for the responsibility analysis will be supplemented
in part at a later time and will be included in the annual review. In
practice, the analysis covers all investments with challenges still being
presented by the different reporting methods for the different asset
categories.
Listed investments
The responsibility analysis includes liquid investments whose total
market value is EUR 446.8 million. Of these, foreign fund investments
total EUR 339.7 million and direct domestic equity investments total
EUR 107.1 million.
For the listed liquid investments, the ESG ratings are at a high level.
The MSCI ESG rating is 8.2/10 (6.4 in 2020) with an ESG rating of AA
(A in 2020). In the investment activities, particular attention has been
paid to the responsibility of funds within their reference group. During
2021, the equity index funds were replaced by ESG ETF funds and, in
addition, two index funds follow Paris-aligned climate targets. We also
added more impact investments to our portfolio and changed our active
managers to those with a greater focus on ESG issues.
In the portfolio, the proportion of investments in traditionally
controversial industries is 2.5% (5.8% in 2020).
At the end of 2021, the weighted average of total carbon risks (MSCI
data) for the listed investments was 103.1 tonnes of CO2 equivalents**
per USD million in revenue. The corresponding figure at the end of
2020 was 165.0 tonnes, so the carbon footprint reduced by over one
third in 2021.
** A carbon dioxide (CO2) equivalent is a measure used to describe the cli-
mate impact of greenhouse gases. Carbon dioxide equivalents are expressed
as masses (for example, tonnes per year) so that the global warming
potential (GWP) of other greenhouse gases is converted to correspond to
that of carbon dioxide.
We have added more impact*** investments to the portfolio and the
share of these types of investments is 7.4%. These investments focus
on energy efficiency, the treatment of serious diseases, and alternative
energy solutions.
*** Impact tells how large a portion of the turnover of the companies owned
through the funds is derived from products or services that help solve
significant social or environmental challenges based on the UN Sustain-
able Development Goals (SDGs). The figure is calculated as a weighted
average of the corresponding figures for the funds in the portfolio. In order
for a company to contribute to the figure of the relevant fund, it must
meet the minimum ESG standards. Thus, those companies are excluded
that have serious ESG deficiencies, an ESG rating of CCC or B, direct in-
volvement in usury or controversial weapons, more than 5% of turnover
from conventional weapons, or more than 10% from alcohol or tobacco
production.