Summary of responses to the PRI reporting and assessment tool 2008

KLP Kapitalforvaltning

Organisational Overview
1. What were your organisation's total assets under management as of 31 December 2007 (in millions)?180540
Please select currencyNorwegian krone (NOK)
1a. If 'Other' was selected, please specify the other currency hereNo Answer
2. What category would best describe your organisation?Pension or superannuation or retirement or provident fund or plan
3. What proportion (in %) of your fund is defined benefit and what proportion (in %) is defined contribution? (please only answer this question if you answered “Pension or superannuation or retirement or provident fund or plan” to Q2)
Defined benefit0
Defined contribution100
4. Please provide an overview of your asset mix as of 31 December 2007 (in %):
Listed equity (developed market, active)4.52
Listed equity (developed market, passive)21.51
Listed equity (emerging market, active)0
Listed equity (emerging market, passive)0
Fixed income - developed markets59.87
Fixed income - emerging markets0
Real estate or property11.08
Private equity0.28
Hedge fund0.55
Infrastructure0
Currency0
Commodities0
Cash2.19
Other (Please specify): 0
5. Please indicate what percentage of your assets are managed internally and what percentage are managed externally (in %):
 
Internal
External
Listed equity (developed market, active)1000
Listed equity (developed market, passive)1000
Listed equity (emerging market, active)00
Listed equity (emerging market, passive)00
Fixed income - developed markets928
Fixed income - emerging markets00
Real estate or property1000
Private equity8218
Hedge fund1000
Infrastructure00
Currency00
Commodities00
Cash1000
Other (Please specify): 00
Principle 1
7. Do you have a formal investment policy statement that makes specific reference to the integration of responsible investment (RI) or environmental, social and governance (ESG) issues within investment decision making and ownership practices?Yes, it is integrated into a broader investment policy and there is an independent RI/ESG policy
9. In what year were RI/ESG issues first formally addressed in a policy statement (integrated or independent)?2001
10. Has your statement that makes specific reference to the integration of RI or ESG issues been disclosed publicly?Yes
11. Please indicate how this statement that makes specific reference to the integration of RI or ESG issues can be obtained (a URL would be sufficient):http://www.klp.no/web/klpno.nsf/pages/responsibleinvestments
12. For what percentage of your internal assets under management do you integrate RI/ESG issues into your internal investment decision-making processes? (in %)
Listed equity (developed market, active)100
Listed equity (developed market, passive)100
Fixed income - developed markets100
Real estate or property100
Private equity78
Hedge fund100
Cash0
13. To what extent have you integrated RI/ESG issues into your internal investment decision-making processes?
Listed equity (developed market, active)To a large extent
Listed equity (developed market, passive)To a large extent
Fixed income - developed marketsTo a large extent
Real estate or propertyTo a small extent
Private equityTo a large extent
Hedge fundTo a large extent
14. For what percentage of your external assets under management are RI/ESG issues integrated into the investment decision-making processes of your external investment managers? (in %)
Fixed income - developed markets50
Private equity78
15. To what extent have RI/ESG issues been integrated into the investment decision-making processes of your external investment managers?
Fixed income - developed marketsTo a large extent
Private equityTo a large extent
16. What proportion of your assets involve screening out or excluding stocks or sectors based on ethical (rather than long-term financial) criteria? (in %)100
17. Do you have any staff dedicated to RI/ESG issue analysis and/or implementation?
 
Dedicated
Combined full-time equivalents
Investment analyst00
Research analyst00
RI/ESG issue policy advisor10
(proxy) Voting specialist00
Engagement specialist00
Portfolio manager10
Other (Please specify):00
18. Which Board committee or other executive body has overall responsibility for RI/ESG issues?KLPs board of Directors, CEO and CFO.
19. Do you assess the capabilities of internal investment staff to incorporate RI/ESG issues?Yes
20. Do you assess the capabilities of external investment managers to incorporate RI/ESG issues?Yes
21. Approximately what percentage of your internal non-ESG-specialist investment management staff received RI/ESG training in 2007? (in %)50
22. What forms of RI/ESG training or awareness raising have been invested in, encouraged or provided for internal staff (investment and other)?Informal internal training,Conferences,Regular briefings on key issues
23. Did you support the development of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research in 2007?To a moderate extent
24. Please indicate how the results of nonproprietary RI/ESG issue-related tools, metrics, analysis or academic research development you supported can be obtained if they have been disclosed publicly (a URL would be sufficient):KLP is Norwegian Partner for the CDP. This means supporting it financially, following up with signatory investors and companies and arranging the report launch. www.cdproject.net
25. Have you advocated/supported/ encouraged/participated in RI/ESG issue-related industry-wide training for investment professionals during 2007?Sponsored industry events,Spoke at or attended conferences,Had dialogue or exchanges with peers,Other (please specify): '0'
26. What was your most significant achievement in 2007 in relation to your implementation of Principle 1?The signing of the PRI. Board commitment to a set of ownership principles. Increased internal RI resources.The Partnering with CDP. Initiated several development projects in relation to our RI strategy. Initiate project in order to assess Norwegian companies CR performance.
27. What was your biggest barrier in 2007 with relation to your implementation of Principle 1?Conflict between "short-term" value creation and long-term sustainability. Financial markets are built up around quarterly and yearly results and this remains a challenge in terms of ESG-integration in mainstream investments decision-making process. Insufficient research and empirical evidence of the link between sustainability and financial performance.
28. Please add any overall comments and clarifications related to Principle 1 here.Enter text response here.
Principle 2
29. To what extent did you employ the following approaches in your 2007 active ownership strategy for listed equities?
(Proxy) votingTo a moderate extent
Direct engagement conducted privatelyTo a moderate extent
Direct engagement conducted publiclyNot at all
Collaborative engagementTo a moderate extent
Filing shareholder resolutionsNot at all
Co-filing shareholder resolutionsTo a small extent
Other (Please specify):No Answer
30. To what extent did you employ the following approaches in your 2007 active ownership strategy for all asset classes other than listed equity?
(Proxy) votingTo a small extent
Direct engagement conducted privatelyTo a small extent
Direct engagement conducted publiclyNot at all
Collaborative engagementTo a small extent
Other (Please specify):No Answer
31. Do you have a (proxy) voting policy?Yes - internal document
32. To what extent does your (proxy) voting policy direct action on ESG issues? For each issue, please indicate the extent of direction.
EnvironmentalTo a large extent
SocialTo a large extent
GovernanceTo a large extent
33. Does your (proxy) voting policy apply to all voting regions (where possible)?Yes
34. Please indicate how your (proxy) voting policy can be obtained (a URL would be sufficient):http://www.klp.no/web/klpno.nsf/pages/responsibleinvestments
35. Do you ensure that voting is done in accordance with your (proxy) voting policy?Yes for all
36. What percentage of total votes cast were against management? (in %)9
37. What percentage of shareholder resolutions relating to environmental, social or governance issues was supported? (in %)
Environmental90
Social90
Governance80
39. How many shareholder resolutions related to RI/ESG issues did you participate in during 2007?
As lead filer0
As co-filer0
Planning to be lead filer in 20080
Planning to be co-filer in 20080
40. How were portfolio companies engaged with in 2007? Please check all that apply.Internal staff engaged portfolio companies directly,Internal staff engaged portfolio companies collaboratively,An external engagement overlay service was employed
42. Do you systematically ask your external investment managers to bring RI/ESG issue-related engagement opportunities to you?Not at all
43. How many portfolio companies did you engage directly/were engaged on your behalf on ESG issues in 2007?
 
Extensive engagement
Moderate engagement
Basic engagement
Environmental1600
Social4200
Governance500
44. What RI/ESG-related issues were addressed in your shareowner engagement initiatives? Please check all that apply.Activities in conflict zones,Benefits and compensation,Bribery/corruption,Climate change,Environment,Governance,Health,Health and safety,Human rights,Labour issues
45. How were RI/ESG issue-related engagement targets and topics identified? Please check all that apply.Sector exposure,Risk profile,Focus issue,Ad hoc/reactive,NGO or union campaign
46. Do you set RI/ESG issue-related engagement objectives and attempt to evaluate success?To a large extent
47. Have you sought evidence relating to the effectiveness of your active ownership strategy? Please check all that apply.(Written) commitment to improve a particular ESG issue,Improved disclosure,Other evidence of improvement in investee company RI/ESG performance due to our activities
48. What was your most significant achievement in 2007 in relation to your implementation of Principle 2?Getting the proxy voting up and running.Get a board commitment from the fund company to vote its shares.Get a dedicated portfolio manager with responsibility to vote in home market.
49. What was your biggest barrier in 2007 with relation to your implementation of Principle 2?Lack of internal IT management system (under development).Getting proxy voting up and running for all funds. Problems with voting in some markets.
50. Please add any overall comments and clarifications related to Principle 2 here.Enter text response here.
Principle 3
51. Have you asked that investee companies (or other investment entities) produce standardized reporting on their RI/ESG issue policies, practices or performance (within annual financial reports or other formats)?To a moderate extent
52. What format of standardized reporting on RI/ESG issue policies, practices or performance have you requested?Carbon Disclosure Project (CDP),Other (please specify): 'Policies on Human Rights, Corruption, Labor Rights etc. In addition to Communication on Progress in relation to Global Compact'
53. Have you provided feedback to investee companies (or other investment entities) on their reporting on RI/ESG issues?To a moderate extent
54. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues?
AdoptionTo a large extent
AdherenceTo a large extent
55. Which norms, standards, codes of conduct or international initiatives related to RI/ESG issues have you sought information about from companies, with regard to their adoption of/adherence to?UN Global Compact,International Labour Organization standards,OECD guidelines for multinational enterprises,World Economic Forum Principles for Countering Bribery,Universal Declaration of Human Rights
56. What was your most significant achievement in 2007 in relation to your implementation of Principle 3?The Partnering with CDP. Initatite/develop Norwegian project for increased reporting (not yet launched). KLP publicly disclose the names and reason for our exclusions. This is important in order to ask for investee disclosure.
57. What was your biggest barrier in 2007 with relation to your implementation of Principle 3?The lack of an overall and systematic engagement strategy, aside from KLPs engagement with excluded og potentially excluded companies.
58. Please add any overall comments and clarifications related to Principle 3 here.Enter text response here.
Principle 4
59. Are you considering RI/ESG requirements when searching for and selecting the following?
External investment managerYes
Investment consultantYes
Proxy votingYes
Engagement overlayYes
Investment researchYes
Internal operations (for example, purchasing, travel, office space etc.)Yes
Other (Please specify):No
60. Have you linked the following to performance on RI/ESG issues?
Investment monitoringYes
Incentive structure (internal investments)No
Incentive structure (external investments)No
Contractual relationships with external investment managersYes
61. Are the default pension funds or retirement plans offered to your employees also signatories to the PRI?Yes
62. To what extent do you encourage your service providers to become PRI signatories?To a large extent
64. To what extent do you encourage peer organisations to become PRI signatories?To a large extent
65. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers?To a moderate extent
67. Have you revisited any relationships with service providers in light of RI/ESG issue-related capabilities?Yes
68. Have you engaged in dialogue, lobbying or initiatives pertaining to government policy and/or industry regulations (for example, stock exchanges, accounting standards) related to RI/ESG issues in 2007?To a large extent
69. What was your most significant achievement in 2007 in relation to your implementation of Principle 4?Beeing involved in the preparation of a sustainability profile for the finance industry organization. Support the development of a Norwegian Sustainable and Responsible Investor Forum. Revision of KLPs RI policy for the use external investments managers.
70. What was your biggest barrier in 2007 with relation to your implementation of Principle 4?Mainstream investment analyst and company analyst do not take a sufficient degree of ESG-information into account in their analysis. Their analysis are, in relation to sustainability, within a too short time frame.
71. Please add any overall comments and clarifications related to Principle 4 here.Enter text response here.
Principle 5
72. Did you use the PRI Engagement Clearinghouse in 2007?Both used and posted to it
73. Did your use of the clearinghouse result in subsequent action or collaboration with other signatories?Yes
74. Please elaborate on how the PRI Engagement Clearinghouse could be made more useful:There could be a intrest template, were initatives matching you intrest and markets could get the right attention. This could make the tool able to get more dedicated and relevant support on each initative.
75. To what extent do you participate in the following RI/ESG issue-related collaborative engagement initiatives and/or industry associations? For those not listed, please use the "other" field:Carbon Disclosure Project,Regional social investment organisation (for example SIF or UKSIF),United Nations Environmental Program Finance Initiative (UNEP FI),Other (please specify): 'Initatiated collaborative initiative'
76. Please indicate the three RI/ESG issue-related collaborative engagement initiatives and/or industry associations that you participated in most extensively and indicate how you did so:
Carbon Disclosure ProjectNorwegian Partner. This involves engagement towards companies, investors and others in promoting the project. Arranging report launch, calling companies and investors, meeting with companies and investors, and commenting on questionnaire etc.
Other (please specify)
KLP initiated a project for identifying investees involvment in controversial countries such as Burma. This is done in order to better monitor the exposed risk for human rights abuses in these countries. This initative seeks support trough PRIs Clearing House.
Regional social investment organisation (for example SIF or UKSIF)Supported the development of Norwegian SIF.
77. What was your most significant achievement in 2007 in relation to your implementation of Principle 5?Initiate two spesific projects that calls for collaboration. Support the development of a Norwegian SIF.
78. What was your biggest barrier in 2007 with relation to your implementation of Principle 5?Limited resources
79. Please add any overall comments and clarifications related to Principle 5 here.Enter text response here.
Principle 6
80. Have you disclosed how RI/ESG issues are integrated into your investment processes?Yes - to clients or beneficiaries and the public
81. Please indicated how this disclosure of how RI/ESG issues are integrated into your investment processes can be obtained (a URL would be sufficient):www.klp.no
82. To what extent do you disclose your annual (proxy) voting record?Planning to in 2008
83. Please indicated how your (proxy) voting record can be obtained (a URL would be sufficient):No Answer
84. Do you systematically report (privately and/or publicly) on your RI/ESG issue-related engagement activities, results and progress?To a moderate extent
85. Please indicate how your reporting on RI/ESG issue-related engagement activities, results and progress can be obtained (if it is publicly available, a URL would be sufficient):www.klp.no
86. Did you communicate on RI/ESG issues and the PRI to beneficiaries or plan participants in 2007?To a moderate extent
87. Please indicate how your communication on RI/ESG issues and the PRI to beneficiaries or plan participants can be obtained (if it is publicly available, a URL would be sufficient):www.klp.no
88. Are you undertaking any additional efforts to raise awareness of the PRI and RI/ESG issues amongst stakeholders?To a moderate extent
89. What evidence do you have of the impact on external investment manager practices? Please check those that apply.Investment policy
90. Have you sought to determine what impact your overall RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behavior or performance?To a moderate extent
91. Have you sought to determine what impact your RI/ESG issue-related approach has had on the performance of your portfolio?To a large extent
92. Have you sought to determine what impact your RI/ESG issue-related efforts, requests and guidance have had on the consideration of RI/ESG issues by your external service providers excluding external investment managers (for example: research providers, consultants, etc.)?To a moderate extent
93. Do you report on progress and/or achievements relating to the PRI or RI, and how would you like to publish your response to this assessment?Please automatically publish our responses to the reporting and assessment tool in full on the PRI website,We publicly reported on our PRI or RI achievements in 2007 (outside of publishing part or all of this assessment)
94. What was your most significant achievement in 2007 in relation to your implementation of Principle 6?Update of Responsible Investments website and KLPs Sustainability Report for 2007.
95. What was your biggest barrier in 2007 with relation to your implementation of Principle 6?The lack of a reporting stucture and reporting system.
96. Please add any overall comments and clarifications related to Principle 6 here.Enter text response here.
Emerging Markets
97. To what extent have you actively thought about how to integrate RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments?To a large extent
98. Please describe your activities with regards to integrating RI/ESG issues within investment decision making and ownership practices with regards to emerging markets investments.If KLP will have an exposure to emerging markets, our SRI policy will be implemented in the same way as for developed markets.
99. To what extent do you believe the integration of ESG issues in emerging markets is as relevant as the integration of ESG issues in other markets?To a greater extent
100. To what extent did you employ the following approaches in your 2007 active ownership strategy in emerging markets?
(Proxy) votingNot Applicable
Direct engagement conducted privatelyNot Applicable
Direct engagement conducted publiclyNot Applicable
Collaborative engagementNot Applicable
Filing shareholder resolutionsNot Applicable
Co-filing shareholder resolutionsNot Applicable
Other (Please specify): NA Not Applicable
101. To what extent have you developed a comprehensive RI/ESG engagement capability regarding business activities in emerging markets?Not Applicable
102. Please list the three most often addressed RI/ESG-related issues in your shareholder engagement initiatives in emerging markets?
1.NA
2.NA
3.NA
103. Have you sought information from companies regarding their adoption of/adherence to norms, standards, codes of conduct or international initiatives related to RI/ESG issues in emerging markets?
AdoptionNot Applicable
AdherenceNot Applicable
104. Do you take RI/ESG considerations into account when selecting and approving emerging markets external investment managers?To a large extent
105. Do your consultants factor RI/ESG issues into their short listing of emerging markets external investment managers?Not at all
106. Do you have evidence that you have played a role in the improved integration of RI/ESG issues by external investment managers investing in emerging markets?Not at all
107. To what extent have you worked together with other investors to improve the effectiveness of implementing the PRI in emerging markets?Not at all
108. Are you undertaking any additional efforts to raise awareness of RI/ESG issues in emerging markets?To a moderate extent
109. Have you sought to determine what impact your RI/ESG issue-related efforts (voting and engagement, investment decision making, disclosure, etc.) have had on corporate behaviour or performance in emerging markets?Not at all
110. Please add any overall comments and clarifications related to the PRI in emerging markets here.KLP do not currently invest in emerging markets.
111. What is your top PRI-related goal/priority for emerging markets in 2008?No Answer
Closing Comments
112. Why did your organisation join the PRI?KLP are a responsible financial investor and owner The first and foremost purpose of KLP’s investment and ownership activities is to secure its financial commitments. KLP manages approximately 185 billion Norwegian Crowns. We manage more than half a million Norwegians’ pensions. It is our responsibility to not only protect, but to enhance the long-term value of the assets under our management. KLP also takes a responsible position by incorporating environmental, social and corporate governance issues into its investment and ownership policy, principles and strategy. Our policy, principles and strategy have been based on, and reflect our commitment to the UN Global Compact. In particular, KLP takes human rights, labor rights, the environment, and corruption issues into account. KLP policy for responsible investments states "KLP shall protect and further develop its leading position as responsible investor and owner."
113. Please describe the benefits you have enjoyed as a result of signing the PRI:Access to the engagement clearing house. Increased dialogue with peers. Aspirational principles for collaboration. Increased support from peers.
114. To what extent do you believe the PRI has succeeded in changing investor behaviour and/or raising awareness or capacity on RI/ESG issues? Do you have any examples you could share?To a great extent. Several big investments house and asset owners, traditionally mainstream has committet to PRI.
115. What are the top three activities the PRI Secretariat could undertake to enhance and encourage further implementation of the PRI by current and prospective signatories?
1.More focus on the conflict between short term financial theory and long term sustainability.
2.More focus on reseach proving the link between long-term sustainability and enhanced financial performance.
3.Emerging markets.
116. What are your top three PRI-related goals/priorities for 2008?
1.Launch initiated projects.
2.Develop and implement monitoring and reporting systems.
3.Continous improvement
117. Please rank the six principles from most difficult to implement to least difficult to implement:
Most difficult
1
Principle 1
2Principle 3
3Principle 4
4Principle 5
5Principle 6
Least difficult
6
Principle 2