Head of Responsible InvestmentsKLP
Jeanett Bergan on KLP’s Responsible Investing
KLP, Norway’s largest pension company, with over US$81 billion in AuM, has conducted ethical filtering of its investments in securities since 2002. In 2019 KLP funds has gone coal free, oil sands-free, as well as divested from almost 90 alcohol & gambling companies. Jeanett Bergan, Head of Responsible Investments, KLP, answers questions on the fund’s approach towards its responsible investing goals.
1. Please explain briefly the responsible investing policies and their goals set out by KLP:
KLP has a strong focus on integrating ESG into our pensions and savings management. We exclude companies who violate our guidelines, are an active owner engaging companies and also invest more in those companies performing well on ESG. Our goal is to be a positive force trough our investments enabling a sustainable future in line with the UN sustainable development goals and climate agreement.
2. What were your or your fund’s top priorities in the first 2 weeks of the market volatility which started in late February this year?
To safeguard our clients’ investments. Take necessary action because of the turmoil and ensure good governance and control over investments and portfolios.
3. How have the remote working practice and constrained travel changed the way you communicate with internal teams and external partners?
Now everything is on the web. This works fine for a short period of time, but is not sustainable long-term.
4. Where do you see the investment trends arising from the implications of the pandemic?
Definitely the pandemic will change societies. There will be a new normal. I believe in less traveling, more home office, more web-based interaction, less crowded and big arrangement, increased inequality to name some…
5. How do you reconcile the pursue of sustainable investing with the fund’s fiduciary duties on delivering returns?
To exclude certain products from investments can hurt performance short-term. Long-term we believe the implications on returns are very limited. That said, recently our ESG strategy have achieved better return than the broad market – and we believe that this trend will continue.
6. Your firm tracks 7000+ companies in your passive portfolio, with a relatively small team. How do you gather data to reach informed decisions?
We use several data providers like the MSCI, ISS, and RepRisk. That said – we must work risk-based and engage companies where risk is high and the opportunity to drive change is bigger.
7. Please share one example of how your firm engages organization(s) on changes for the better.
We have engaged several ship owners on responsible ship recycling practices. We are currently engaging companies and tax, climate change, deforestation and sustainable protein. When engaging companies – we are one of many forces influencing a company’s business. Some recent examples of companies we have included again after divestment, because of improved practices include Petrobras, Walmart, Yahoo
Jeanett Bergan, Head of Responsible Investments, KLP, spoke at Institutional Connect Virtual Forum in October 2020