2016 – ESG: An integral part of the investment process

We look at ESG integration primarily from the viewpoint of generating sustainable long-term returns, which aligns well with our focus on a high-quality investment portfolio. ESG integration makes economic sense because it improves risk/return profiles. As part of our active risk management, we are therefore adopting ESG-based benchmarks in our credit and equity portfolios.

As a long-term investor, we consider factors that may have an adverse impact on the sustainable value of our portfolio, such as climate risk. As a result, we measure our exposure to carbon emissions in listed equities and corporate bonds in a systematic manner. In order to mitigate the risk of stranded assets, we have also adopted a policy to avoid investments in companies where a substantial part of their revenues is stemming from thermal coal.