OP-Sustainable World offers a vehicle highlighting sustainable development, social wellbeing and ethical aspects and easy and simple investing. The fund applies both negative and positive screening. Negative screening means that certain sectors and functions are excluded from the fund's investment options as described below. We update our criteria for exclusion whenever required as a result of developments in the operating environment. Positive screening means analysing companies' operating policies from the perspective of responsibility and only the top companies can be admitted to the fund.
NEGATIVE SCREENING
Products and services hazardous to health or causing addiction
The fund does not invest in products or services that are hazardous to health or cause addiction. This category includes alcohol and tobacco producers and gambling companies. Neither do we invest in companies with a significant proportion of their turnover coming from the sale of tobacco and alcohol products. If the abovementioned products generate only a minor share of the sales, such as typically in the case of a department store, the fund may invest in such a firm if the firm otherwise meet the criteria set by the fund. The assessments are based on information available to the portfolio manager.
Social and societal topics
From the social and societal perspective too, harmful and doubtful practices, products and services count among those in which the fund does not invest. This category includes the manufacture of weapons other than sporting and hunting weapons, activities contrary to the UN Global Compact initiative, such as child labour and corruption, production of adult entertainment, animal tests for non-medical purposes and aggressive tax planning. The definition of aggressive tax planning will be specified thanks to international principles and improving reporting. We are currently paying attention, for example, to aggressive arrangements by country that have come to our notice.
Environment
For environmental reasons, the fund does not invest in companies in the oil or gas sector or in companies that otherwise have a significant impact on climate change. In respect of the impact on climate change, the fund uses fossil fuel reserves, carbon footprint and carbon intensity as criteria. The fund does not invest in nuclear power producers either.
POSITIVE SCREENING
Of the companies in industries remaining after positive screening, only those can be admitted to the fund that rank among the best ones in their sectors in responsibility assessment. The responsibility analysis comprises three components which relate to the environment, society and corporate governance. In selecting responsible companies, we make use of data collected by MSCI as one of our sources, where corporate responsibility is assessed by means of hundreds of various metrics. The metrics pertain, for example, to employee treatment, safety at work, supply chain responsibility, greenhouse gas emissions and pollutants, use of water, carbon footprint of products, biodiversity, composition of the board of directors and corruption.
In investment, risks and returns are linked. OP-Sustainable World takes the middle road in both. It is an easy and simple option for investors who are interested in earning returns but not in watching closely stock market developments. Strict compliance with ethical practices combined with thorough sustainability assessment gives investors peace of mind while portfolio management experts ensure that risks associated with equity markets remain in control.