The Fund invests its assets broadly in the global equity markets. Investments may be made both in developed and emerging equity markets.
Sustainable investments: the Fund invests in water industry companies whose business is in large part related to securing the water resources also in the future. This especially means companies focused on supplying water management infrastructure or developing water technology, as well as conglomerates that are market leaders in some water industry sub-sector. Investee companies are screened using OP Asset Management’s analysis model, which is based on an external service provider’s SDG and sustainability data. Companies whose business promotes one or more UN Sustainable Development Goals (SDG) without harming other sustainable factors or goals are considered sustainable investments.
Exclusion: The Fund excludes from its active direct investments controversial weapon manufacturers, mining companies producing thermal coal, power companies using thermal coal, tobacco companies, and companies that have breached international standards and where engagement has been unsuccessful. The list of excluded companies is public. In addition to general exclusion rules, the Fund does not invest in companies whose principal business is in unconventional oil and gas extraction or other fossil fuels (50% of revenue or more).
Violations of international standards: The Fund is screened regularly for non-compliances with international standards. If the company does not pass the screening, an engagement process is initiated with the company. The aim is to make non-compliant companies change their practices and begin to comply with international standards in their operations. If engagement does not bring results, the company may be removed from the Fund portfolio and placed on the exclusion list.
Shareholders’ meetings: The Fund votes in shareholders’ meetings through a service provider in line with OP Fund Management Company Ltd’s shareholder engagement principles that take responsibility aspects into account.
Methods for assessing good governance practices: Analysing the target company’s governance is an important part of the investment process. To us, good governance is a key foundation for any company’s financial success, regardless of sector. When assessing governance, some of the areas considered include the appropriateness company’s administrative organisation, actions in relation to its personnel, and company’s reward and taxation practices. In assessing good governance, we use an external service provider’s analysis and our own qualitative analysis if no external data is available. We screen the funds regularly to check them against the criteria of good governance. Minimum limits apply for these criteria.