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Hastings has made a commitment to set science-based targets (SBTs) approved by the Science Based Targets initiative (SBTi) in accordance with the Paris Climate Agreement to limit global warming to 1.5°C. The commitment will see Hastings develop both short-term (5-10 years) and longer-term net-zero targets for both its own operations and investments over the next two years, with targets being disclosed to SBTi in 2024. Once the targets have been disclosed and validated, Hastings will regularly report on progress to SBTi and through annual sustainability reports. 

All of Sampo’s P&C business units have now committed to setting science-based climate targets.

The average carbon intensity of Mandatum’s investments in 2021 was 117 tCO2e/MEUR. The result is significantly below (-49%) the average level in the markets.

The comparable carbon intensity of Mandatum’s unit-linked insurance client assets has decreased by roughly 50 percent since 2017. The reduction in emissions can largely be explained by active portfolio management measures.

Results in brief:

• The average carbon intensity* of investments was 117 tCO2e/MEUR, which is 49 per cent less than the market indices.
• Intensity for equity investments was -41% (101 tCO2e/MEUR) and for fixed income investments -51% (126 tCO2e/MEUR) in relation to the market indices.
• The comparable change in the carbon intensity of the assets managed by Mandatum Asset Management compared to 2020 was -6 per cent.
• The investments’ total emissions** were 1,427,592 tCO2e. The total emissions are not comparable with the figure reported for 2020, as the 2021 figure includes new assets due to the formation of Mandatum Asset Management.

 *Average carbon intensity expresses emissions in relation to the company’s revenue. The reported figure is a weighted average of the investments’ carbon intensity. The emissions include scope 1 and scope 2 emissions, i.e. emissions from the company’s operations and purchased energy.

**An investment portfolio’s total emissions are calculated by allocating companies’ emissions to the investment portfolio based on the share of ownership in equity investments and the share of owned debt or the enterprise value in fixed-income investments. The emissions include scope 1 and scope 2 emissions, i.e. emissions from the company’s operations and purchased energy.

Taking climate change into account and reducing the carbon footprint of investments are focal points of Mandatum’s investment operations, with the carbon footprint of investments being a key indicator of responsible investment.

“Climate change affects the operations of all companies in one way or another. Likewise, companies have an impact on climate change through their operations. That is why we measure both the financial impacts of climate risks on investee companies and the carbon footprint of the investment portfolio in order to get a comprehensive understanding of the risks we are taking, as well as the impact we are having on climate,” explains Senior Portfolio Manager Topias Kukkasniemi of Mandatum Asset Management.

“We are very pleased that we have succeeded in cutting the carbon intensity of our investments in half since 2017. We will continue our long-term work to manage the climate risks of investments and reduce the impacts of climate change,” he adds.

As a member of the Portfolio Decarbonization Coalition investor network, Mandatum’s objective is to minimise investments’ emissions by actively managing the climate risks of investment activities and offering opportunities to invest in companies with a smaller carbon footprint. As a signatory of the UN’s Montréal Pledge, Mandatum annually publishes the carbon footprint of its investments.

How the measurement was carried out:

• The carbon footprint of investments was calculated in co-operation with ISS ESG.
• The calculation covered the assets managed by Mandatum Asset Management with respect to its own investment baskets, own funds, full-mandate client portfolios and allocation solutions as per the situation on 31 December 2021.
• The carbon footprint of the investees is based on the Carbon Disclosure Project’s (CDP) database on the emissions of the companies. Where no data is available, the emissions have been estimated using ISS ESG’s sector-specific models.

Sampo Group has conducted two portfolio impact assessments using Upright’s methodologies. The aim of the assessments was to measure the impact of Sampo Group’s investments on the UN Sustainable Development Goals (UN SDGs) and examine the net impact profile of the investment portfolio. The assessments included Sampo plc, If, Topdanmark, Hastings, and Mandatum’s investments as at 31 December 2021.

Portfolio alignment with the UN SDGs

Uprightʼs UN SDG contribution data is based on the alignment of a company’s products and services with the 17 UN SDGs. In assessing the SDG contribution for a single company, each of the company’s products and services are evaluated against the 169 targets (subgoals) under the 17 SDGs, focusing on those applicable to companies.

The methodology captures both positive and negative impacts for each SDG. Sampo Group’s analysis includes four levels of alignment with the SDGs: strong alignment, alignment, misalignment, and strong misalignment. Strongly aligned products have a clear direct impact on the SDG, whereas aligned products have a lesser direct or indirect impact on the SDG.

According to the assessment, the investments support especially SDGs 9 (industry, innovation, and infrastructure), 8 (decent work and economic growth), and 11 (sustainable cities and communities).

Portfolio impact on the UN Sustainable Development Goals, Sampo Group, 31 December 2021

Net impact profile of Sampo Group’s investments

The net impact of a company is the net sum of costs and benefits that the company creates. The Upright net impact model measures positive and negative net impacts in four dimensions: environment, health, society, and knowledge. The model collects information on the impacts of all products and services from scientific literature and public statistical databases.

According to the assessment, the net impact profile of Sampo Group’s investments is positive. The investee companies contribute to society through job creation, taxes, and societal infrastructure. On the negative side, they use scarce human capital in the form of highly skilled employees, generate emissions, and produce waste.

Net impact profile of investments, Sampo Group, 31 December 2021

Topdanmark has joined the Science Based Targets initiative (SBTi), an international alliance supported by the UN, which helps companies ensure that their climate goals live up to the Paris Climate Agreement. The commitment means that Topdanmark will set ambitious science-based climate targets which are aligned with limiting global temperature rise to 1.5°C above pre-industrial levels.

As an insurance company, Topdanmark has seen how climate change and extreme weather events affects its customers. Topdanmark believes that it can contribute to reducing greenhouse gas (GHG) emissions in society and will focus its efforts on five areas in particular:

• offering tailored and attractive products that motivate customers to opt for climate-friendly solutions
• exploring GHG saving technologies and measures in claims handling
• investing in loss prevention
• setting ambitious climate targets for investments and underwriting, including exclusions of carbon intense sectors and engagement with customers and investee companies to promote the green transformation
• optimising daily operations to reduce GHG emissions

Topdanmark must now define its new targets within two years and send them to SBTi for validation, as well as report on progress towards the goals.

More information on Topdanmark’s commitment can be found here (in Danish).

Sampo Group has published its Sustainability Report for 2021 on Sampo’s Annual Reporting site at www.sampo.com/year2021. The report gives an overview of a wide array of topics regarding how Sampo Group companies ensure sustainable business operations, integrate sustainability into investment management and insurance operations, support their employees, and engage in communities. The subsidiaries’ sustainability reports are also available on the Annual Reporting site.

- One of the most important sustainability-related developments in 2021 within Sampo Group was If P&C’s decision to join the Science Based Targets initiative (SBTi) and set ambitious climate targets aligned with the Paris Climate Agreement. In addition, Sampo’s UK P&C insurance business, Hastings, decided to work towards being a net-zero company by 2050, says Torbjörn Magnusson, Group CEO and President.

- Sampo Group received rating upgrades from several leading ESG rating agencies during the year, representing strong proof that our work in building an increasingly sustainable business is progressing well. It also shows that we have placed emphasis on developing what is most material for us as a P&C insurance group, and for our stakeholders, Magnusson continues.

Sampo Group is committed to further strengthening its sustainability efforts in close cooperation with its stakeholders. Sampo works continuously on integrating sustainability principles, such as those of the UN Global Compact, into the Group’s policies and business practices and wants to encourage its investee companies and other business partners to do the same.