Responsible Investing
Responsible Investing
At Mandatum, responsible investing involves a comprehensive assessment of the impacts, risks, and opportunities associated with environmental, social and governance (ESG) factors when making investment decisions.
In practice, responsibility involves the integration of ESG factors into the investment analysis, engagement and active ownership, as well as implementing restrictions in areas identified as sensitive. ESG risks associated with investment objects are proactively identified and assessed for their potential impact, while also evaluating how effectively these factors are taken into account in each investment. Mandatum’s goal is to phase out coal from its direct equity and fixed income investment portfolios by 2030, and oil by 2040. In addition to assessing responsibility factors of investments, an impact assessment is also integrated into the evaluation process. This means comprehensively evaluating the positive, negative and net impacts of investment objects in relation to society and the environment. For some products, the impact assessment is supported by a model created by the Upright Project. The results of Mandatum’s determined responsibility efforts are reflected in the high scores in the annual UN Principles for Responsible Investment (UN PRI) assessments and the success of direct real estate investments in the Global Real Estate Sustainability Benchmark (GRESB) assessments.
Mandatum is committed to achieving net zero emission from its investments by 2050.
Five stars for Mandatum’s real estate fund in GRESB assessment
The special common fund Mandatum AM Finland Properties II, managed by Mandatum, boosted its ranking and received five stars in the Global Real Estate Sustainability Benchmark (GRESB) assessment. This puts the fund in third place in its peer group both in Finland and in Europe.
Sustainability can also be influenced through indirect investment
Mandatum has invested more than EUR 3 billion in European and US private debt funds since 2008 and is a major participant in the sector. In the pursuit of strong risk-adjusted returns, ESG and manager selection have become a critical part of the investment process.
Mandatum Asset Management’s active ESG dialogue with Incus Capita
In June 2022, MAM made an investment in Incus European Credit Fund IV, which invests in non-sponsor asset-backed private credit transactions in Southern Europe. While the fund scored poorly in MAM’s ESG assessment, MAM began an active dialogue with its management team to improve its ESG process and practices.
Read more about how responsibility is implemented in different asset classes based on their specific characteristics and engagement opportunities.
Private Debt
The ESG approach of the Private Debt programme is based on a comprehensive responsibility analysis, an ESG questionnaire for managers, and a responsibility framework developed from these results.
The programme's investments are divided between direct lending and opportunistic strategies, which are implemented indirectly through selected target funds. These sub-segments fulfil distinct roles within our portfolio, and different factors are taken into account in the manager selection and ESG assessment. Feedback derived from survey results supports ESG engagement efforts.
Based on the survey results, feedback to managers supports active ESG engagement throughout the partnership, and managers are encouraged to report regularly on ESG. Progress is monitored and benchmarked against other players in the sub-segment, reinforcing the continuity of ESG integration and development.
Real Estate Investments
The built environment has historically been the largest contributor to global energy consumption and related CO2 emissions. MAM's responsibility measures aim at significantly reducing emissions, while simultaneously achieving cost savings and increasing the value of properties.
The responsibility of real estate investments encompasses a broad range of factors, including not only improvements in energy efficiency, but also the measurement of a property's carbon footprint and greenhouse gas emissions, the optimisation of water usage and waste management, as well as consideration of social responsibility, such as community engagement, environmental awareness and the use of renewable energy. MAM's real estate investment strategies invest in properties with investment plans that incorporate future carbon neutrality objectives at the time of investment.
Loan Investments
In Mandatum’s loan strategies, investments are typically made in syndicated loan facilities of European large and mid-cap unlisted companies. The decision-making process of loan investments adheres to the Responsible Investment Policy, in alignment with the sustainability characteristics defined for each product. The UI - Mandatum AM Senior Secured Loan Fund (SFDR art. 9) product is subject to stricter exclusion criteria.
Investment strategies consider sector-specific differences, such as cyclicality and environmental impacts. The analysis is supported by a net impact model developed by the Upright Project, which measures the positive and negative impacts of companies and their overall net impact on society and the environment.
Equities and Bond Investments
For equity and bond investments, the key methods for considering responsibility include an ESG analysis as part of the investment object analysis, avoidance of sensitive industries, monitoring of greenhouse gas emissions, oversight of non-compliance, engagement and active ownership. The ESG Risk Rating by Sustainalytics is used to support Mandatum’s own analysis. The climate strategy adheres to the principle of double materiality, which considers both the impacts of climate risks on the investee company and the company's impact on responsibility factors.
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Private Equity Investments
MAM Growth Equity provides a growth platform for established and ambitious companies, and responsibility is seen as a key factor in building the growth of portfolio companies. MAM GE aims to create value by helping investee companies develop their ESG practices and monitoring their implementation and results. Responsibility aspects are integrated into the investment process, from the analysis of investee companies through to exit and beyond.
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Active Ownership and Engagement
Ownership practices employ three main approaches to influence investee companies: direct dialogue, pooled engagement, and voting at shareholder meetings. As a general principle, engagement is limited to the companies we own.
Sustainability at Mandatum
Mandatum's sustainability work includes three key themes that form the foundation for Mandatum's business. The key themes are: responsible investment, promoting financial security and a good working life, and responsibility in Mandatum's own operations.
READ MORE ABOUT MANDATUM GROUP'S SUSTAINABILITYSustainability-related information
Find links below to Mandatum’s relevant sustainability-related information on investment activities.
POLICIES AND PRINCIPLES
STATEMENTS OF PRINCIPAL ADVERSE IMPACTS ON SUSTAINABILITY FACTORS
Mandatum has published the information required by Article 4 of the Sustainable Finance Disclosure Regulation (EU) 2019/2088 (SFDR) on its website.
POLICIES ON SUSTAINABILITY RISKS AND CONSIDERATION OF SUSTAINABILITY RISKS IN REMUNERATION
Mandatum has published the information required in Article 3 of the SFDR on its policy on the integration of sustainability risks into the investment decision-making process and investment advice along with the information required by Article 5 on how the Group's remuneration policy aligns with the integration of sustainability risks on its website.
SUSTAINABILITY-RELATED WEBSITE DISCLOSURES
Below you will find the product-level website disclosures referred to in Article 10(1) of the SFDR of Mandatum's financial products that promote environmental or social features or have a sustainable investment objective.
- Summary: Product-level website disclosure for financial products that promote environmental and social characteristic
- MAM-SFDR website disclosure Allocation Products
- MAM-SFDR website disclosure Direct Equity and Fixed Income Investments
- MAM-SFDR website disclosure Private Debt
- MAM-SFDR website disclosure Private Equity Opportunities II
- Mandatum SICAV-UCITS - sustainability-related disclosures
- MAM-SFDR website disclosure Finland Properties II
- Mandatum AM AIFM Ltd. sustainability-related disclosures
PRODUCT-LEVEL SUSTAINABILITY DISCLOSURES
Investment baskets
Product-level sustainability disclosures of the investment baskets owned by Mandatum Life Insurance Company Limited can be found on the product page of each investment basket. The investment baskets are managed by Mandatum Asset Management Ltd.
UCITS funds
Sustainability disclosures for the Luxembourg-based Mandatum SICAV-UCITS fund managed by Mandatum Fund Management S.A. can be found here.
Alternative funds
The sustainability disclosures of the MAM Growth Equity II Ky (GE II) and the Special investment fund Mandatum AM Finland Properties II (SK II) funds, managed by Mandatum AM AIFM Ltd, can be found here.
Mandatum Global Investment Fund SCSp SICAV-RAIF - UI-Mandatum AM Senior Secured Loan Fund is intended for professional investors only. MAM is the portfolio manager of the fund. The fund is managed by Universal-Investment-Luxembourg S.A. The fund is a financial product in accordance with Article 9 of the SFDR. You can find more information on the sustainability aspects of the fund here.
