Responsible investing refers to investment activities that take into consideration the environment, society and good governance. Responsibility influences the long-term potential for a company’s success and taking this into consideration in investments also produces results for the investor. At Evli, we want to grow our clients’ wealth in a responsible manner. For this reason, responsibility is integrated into Evli’s Wealth Management investment operations and our funds are managed in accordance with Evli's Principles for Responsible Investment.
Climate change and related practices have been made more prominent in Evli's investments. We have therefore published our Principles for Climate Change.
All of Evli's equity and fixed income funds adhere to the company's Principles for Responsible Investment.
Active investments are regularly analysed in terms of ESG (Environmental, Social, Governance) factors. An ESG score is calculated for each fund and direct equity investment, which reflects how well the companies as a whole have taken into consideration the risks and opportunities associated with responsibility.
We monitor our investments regularly and strive to influence the way companies operate. If we observe that a company is violating the principles of human rights, labour standards, the environment or anti-corruption as set out in the UN Global Compact, we seek to influence the company's operations or exclude it from our investments. We also participate in various collaborative engagements and initiatives with other investors and participate in annual general meetings in Finland.
Some industries are completely excluded from investments. All of Evli's equity and fixed income funds, as well as direct equity investments, follow the general exclusion principles, in addition to which some funds follow even broader exclusion criteria. Read more about the exclusion criteria.
Evli's responsible investing is based on transparency and openness, which is why we report responsibility factors comprehensively to our clients. Our responsibility reporting consists of the funds' ESG reports, client-specific portfolio reports and the responsible investment annual report.
Climate change is one of the biggest threats of our time, and we want to play our part in mitigating it through responsible investment. All of Evli's investments follow the company's Climate Change Principles.
The TCFD (Task Force on Climate-related Financial Disclosures) is an international climate risk reporting framework that looks at climate change threats and opportunities for companies. We report on Evli Bank's climate risks in accordance with TCFD guidelines. The first report was published within the 2019 Corporate Responsibility Report. In August 2019, we joined the TCFD as a public supporter.
Exclusion is one of the most concrete ways to implement the Principles for Responsible Investment. At Evli, exclusion is a two-stage process: certain principles apply to all funds and investments, in addition to which some funds comply with broader exclusion criteria.
*5% revenue threshold.
On February 18, 2021, Evli Bank Plc’s (Evli) Responsible Investment Executive Group approved the following principles regarding the addressing of sustainability risks and adverse sustainability impacts. Sustainability risk refers to an environmental, social or governance event or condition that, if it occurred, could cause an actual or potential material negative impact on the value of an investment. These principles regarding the addressing of sustainability risks and adverse sustainability impacts will be applied whenever Evli Bank Plc and/or Aurator Asset Management Ltd invest client assets under their asset management in, and/or whenever they offer investment advice to, the funds managed by Evli Fund Management Company Ltd and the assets under its asset management. Therefore, the same principles will be applied throughout the Evli Group, and the word “Evli” below will refer to all Evli Group companies.
A legislative amendment that is pending in the European Union will require companies providing investment services to establish clients’ preferences regarding the responsibility and sustainability of the clients’ investments in conjunction with offering investment services. When the new regulation enters into force, Evli will determine and take account of any sustainability and responsibility preferences the client may have when offering asset management services and investment advice.
Evli takes account of the sustainability risks in its investments and of the principal impacts of its investments on sustainability factors in accordance with Evli’s Principles for Responsible Investment. Evli’s Principles for Responsible Investment are asset class-specific and cover all the active investments under Evli’s management.
Evli’s Principles for Responsible Investment cover:
The above-mentioned principles describe how Evli identifies and analyzes sustainability impacts and the related indicators and what Evli’s procedures are with respect to these. One example of a negative sustainability impact is a breach of a norm, i.e. an act that breaches the principles of the UN Global Compact corporate responsibility initiative, for which Evli has specified a systematic procedure. We monitor Evli’s own funds and direct equity investments to find out whether they contain companies that violate the principles of the UN Global Compact. The UN Global Compact is an international corporate responsibility initiative that requires companies to respect human rights, implement anti-corruption measures and consider environmental issues. It is made up of ten principles, which are derived from the UN Universal Declaration of Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work, the UN Rio Declaration on Environment and Development and the UN Convention Against Corruption. If we discover that a company we have invested in is violating the principles of the UN Global Compact, we will first analyze the situation with the portfolio manager after which the Responsible Investment team will decide on further action. There are two options for further action: to start engagement activities or to place the company on the list of excluded investments. The purpose of engagement activities is to change the company’s practices so that they become more responsible.
Evli also has separate ownership control principles which describe the ownership control methods used by Evli. Evli reports on the responsibility of its funds and its client portfolios with fund/portfolio-specific ESG reports, which extensively describe the indicators related to responsibility and sustainability impacts. The implementation of the ownership control principles is reported in Evli Group’s responsible investment annual report.
Fund-specific information on Evli's mutual funds and alternative investment funds in accordance with the EU disclosure regulation is available on Evli’s website at www.evli.com/en/products-and-services/mutual-funds/funds/nav and www.evli.com/products-and-services/for-investmentfunds/funds.
At Evli, responsible investing is primarily implemented as part of the day-to-day investment activities. ESG integration, which means the consideration of responsibility factors in portfolio management, is a key part of investment decision-making, the analyses of risks, and the monitoring of companies.
A wide range of factors are taken into consideration when making investment decisions, both in relation to the company and its industry. Responsibility factors are a key part of risk analysis and making investment decisions.
Evli's Principles of Responsible Investing, Climate Change Principles, and the exclusion criteria for all investments set the framework for the investment activities. Portfolio managers conduct analyses of companies and industries and their ESG-related risks and opportunities. The Responsible Investment team supports portfolio managers in their work and Evli's Responsible Investment Executive Group makes decisions on the framework for responsible investment.
With Evli's ESG database, the portfolio managers can easily access corporate responsibility information when conducting equity and fixed income investments and risk analyses. The database enables portfolio managers to retrieve companies' ESG ratings, information on the proportion of revenue which is made up of disputed operations, as well as emissions data and possible UN Global Compact violations. These can then be compared with the corresponding data in the benchmark index.
We believe engagement is an important part of responsible investing and often a more effective means than exclusion for bringing about lasting change.
We believe engagement is an important part of responsible investing and often a more effective means than exclusion for bringing about lasting change.
Engagement can be done in three ways: by engaging companies either alone or in conjunction with other investors, by attending annual general meetings, and by holding corporate responsibility discussions in conjunction with ordinary company meetings. The main themes of Evli's engagement are climate change mitigation, respect for human rights, anti-corruption measures, taking environmental issues into consideration, factors related to good governance and the reporting of responsibility factors.
We analyse the active selections made in our equity and corporate bond funds and the direct investments in Wealth Management every three months for potential violations of UN Global Compact Principles and Evli's Climate Change Principles.
The UN Global Compact is an international corporate responsibility initiative that requires companies to respect human rights, actions to fight corruption and take environmental issues into consideration. Information on violations can be obtained from MSCI and ISS ESG databases and from other sources, such as the news.
Every case of non-compliance with the norms and Climate Change Principles triggers a pre-determined process at Evli. The case is first handled with a portfolio manager, after which Evli's Responsible Investment team analyses the company's situation. The Responsible Investment team has two options for further action:
Cases of engagement most often concern environmental problems, human rights, workers' rights or actions leading to climate change mitigation. Evli does not disclose the names of the companies subject to engagement activities, as it believes that confidentiality with the company is more effective.
Collaborative engagement is achieved through, among others, Climate Action 100+, CDP investor letters and PRI projects.
Evli participates in Annual General Meetings and Extraordinary General Meetings mainly only in Finland but may also provide voting instructions to selected foreign Annual General Meetings without attending the meeting itself. Annual general meetings are selected on the basis of the content of their agenda and the wealth management firm’s potential to impact for change, and the final decision on participation is made by the portfolio manager responsible for the fund's investment decisions or the Responsible Investment team.
As part of the investment strategy of some funds, the portfolio manager who makes investment decisions often meets with representatives of the companies on a regular basis. In these meetings, issues about responsibility factors are actively raised. The Responsible Investment team also meets companies to discuss responsibility-related themes. In total, there are hundreds of company meetings each year.
Transparency and openness are the cornerstones of Evli’s responsible investment. We want to report on responsibility factors and the results of our responsibility work regularly and comprehensively, and to continuously develop the reporting methods.
Evli publishes ESG reports for all of its equity and corporate bond funds four times a year. With the reports found on the funds' websites, anyone can assess the responsibility of the investments made by the funds.
Each report provides the fund’s ESG rating based on the sustainability data generated by MSCI. The rating is given on a scale of AAA-CCC. In addition to the overall rating, the fund's ESG ratings are also separately reported in terms of environmental, social and governance.
In addition, the fund’s investments are examined for compliance with the principles of the UN Global Compact. The principles of the UN Global Compact require respect for human rights, anti-corruption measures and consideration of environmental issues.
Responsibility is an important part of Evli's corporate responsibility report, which complies with the GRI (Global Reporting Initiative) international responsibility reporting standards, where applicable. In addition, we publish an annual report on responsible investment, which details the development of ESG integration in the company and the engagement and exclusion measures.
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“Evli discusses responsibility-related matters with companies and can exclude companies if corrective measures are not taken. Manufacturers of controversial weapons are always automatically excluded,” explains Outi Helenius, Head of Sustainability at Evli Bank Plc.
Responsibility is an important part of portfolio management at Evli. Systematic processes have been established for responsibility in order to ensure that it is an integrated part of Evli’s investment operations.Read the report
The principles of responsible investments define Evli Wealth Management’s approach to responsible investment and used methods.Read the principles
Engaging with major greenhouse gas emitters to combat climate change and attain the targets of the Paris Agreement.
PRI works to understand the investment implications of ESG factors and to support its investor signatories in incorporating these factors into their investment decisions.
An international investor initiative developed to encourage companies to curb emissions and achieve the goals of the Paris Agreement.
CDP is an international organization that encourages companies and cities to report on their environmental impact.
Finsif promotes responsible investment that takes into account environmental, social and good governance considerations in financial management and investment decisions.
PRI's joint initiative Need for Biodiversity Metrics supports the development of biodiversity-related reporting practices.
TFCD is an international project in the financial sector that aims to integrate the effects of climate risks into official financial reporting.
Over 100+ investors call to EU leaders to ensure a sustainable economic recovery from COVID-19.