Sustainability risks are managed in the Company’s annual risk management process, which seeks to identify significant risks in the entire business and value chain, strengthen management, and take measures to manage exposure to risks. The Company’s instructions for risk management are the internal control document that regulates risk management. The sustainability risks that are identified as significant for the Company are further managed in the process of producing documentation for investment decisions.
Slättö has decided that investments in property assets intended for activities that are not in line with the Company’s sustainability ambitions and which thereby constitute a significant risk to that investment, shall be excluded. According to this decision, investments are not made in property assets that are intended for the extraction, storage, transport or sale of fossil fuels.
The same applies to property assets intended for activities in the production, storage, sale or transport of alcohol, tobacco and illegal drugs, weapons and war materials, commercial gaming activities, activities that violate international norms and conventions or activities that have a significant negative impact on the environment and climate by failing to observe current legislation. Exceptions can be accepted by Slättö’s management in connection with the adoption of an action plan for changes in intended activities in the property asset, which means that exceptions may apply during a transitional period, provided that there is a conversion plan.
Slättö’s identified sustainability risks relate to compliance with regulations, climate change, lack of environmentally certified properties, working environment and safety, supply chain, inadequate life cycle analyses, financing and pollution. Assessments are made in conjunction with every investment decision and measures are taken in the event that significant sustainability risks are identified. This helps Slättö ensure that risk exposure is kept within established guidelines for the Company and funds managed by the Company.
When assessing variable remuneration, variable remuneration must not be based on actions that involve excessive risk exposure.
Negativa konsekvenser för hållbar utveckling
Slättö Förvaltning AB, LEI no. 894500GBUVMFIJU64210, and the Company’s managed funds and subsidiaries managed thereby, consider the main negative consequences for sustainable development in investment decisions. Implementation of the consideration, in accordance with the description of the main negative consequences below, will take place from March 10, 2021, full reporting of the results of the review will take place in reporting for the financial year 2022.
The Company’s funds’ assets are in companies owned directly or indirectly by the funds. These companies will be included in the accounts and will not be presented separately.
When making investment decisions, the main negative consequences for sustainable development are considered. Indicators from the technical standards developed by ESMA regarding investments in property assets are included in investment decisions. The Company’s materiality analysis in the sustainability sphere is the basis for identification and prioritization. Investment decisions consider i) purposes intended for the property asset; ii) energy performance and energy source; iii) greenhouse gas emissions; iv) waste management during the operational phase of property assets; v) climate calculation of projects for new production and major renovations; vi) consideration of biodiversity and ecosystems; and (vii) soil contamination.
Annual evaluation of the sustainability aspects of investment decisions are conducted to ensure correct identification and prioritization of management and measures as well as processes and work routines.
Slättö’s Investment Committee decides on investments in funds managed by the Company. The Investment Committee is appointed by the Company’s board. Slättö’s policy for the Investment Committee clarifies the basis on which investment decisions are made. An account of external technical and/or environmental due diligence where applicable and how and in what way ESG criteria have been considered are to be included in the documentation. ESG criteria include i) adopted sustainability goals based on the materiality analysis conducted; ii) significant sustainability risks; iii) type of investment to be excluded if it is not in line with the Company’s sustainability strategy; and iv) sustainability criteria based on the technical standards proposed to date, partly based on indicators that Slättö identified as prioritised through materiality analysis.
When identifying the main negative consequences for sustainable development, measures are taken to minimize risks and thus negative consequences for sustainable development.
Support of environmental and social aspects
Slättö Core Plus and Slättö Value Add I promote environmental and social characteristics by taking sustainability aspects, environmental as well as social characteristics, into account when making investment decisions. This is done by i) considering and taking measures for more efficient energy performance and that promote use of renewable energy; ii) reduced emissions for the property supply (also for projects and new production); iii) strive to and thereby increase the proportion of property assets that are environmentally certified; and iv) ensure safe and inclusive workplaces, including in development projects where Slättö is the client.
Investments in property assets intended for operations that are in conflict with the Company’s sustainability work and risk management are excluded.
This is done and ensured through i) internal control documents that stipulate how and what is to be considered and included in investment decisions; ii) requirements for data collection for measurement and follow-up to achieve better sustainability performance over time; and iii) through external requirements, primarily for contractors, where the fund is considered to have considerable responsibility as a client. In procurement and purchasing, good sustainability performance is rewarded. The fund shall ensure that laws and regulations are complied with internally as well as externally by clarifying requirements and internal governing documents.