UPM-Biofore-Magazine-1-2015-EN

doing good

“We use a specific research methodology to analyse the corporate responsibility track record of each company up for investment. We look at the company’s policy on climate change and use of natural resources and water, for example, and assess how its actions affect these issues.”

tors, as well as how it deals with the local environmental impact of its production facilities,” Savilaakso adds. Other factors up for consideration include the company’s policy on R&D investment – an area where UPM’s focus is on environmentally innovative products such as wood-based renew- able diesel, biochemicals and biocom- posites. “We also carried out a general corporate responsibility analysis and found that UPM is a perfect fit for our ethical portfolio,” Savilaakso notes. Sound ethics is smart business Savilaakso emphasises that corporate responsibility evaluation is carried out in parallel with financial analysis. “The market oftenmistakenly views goodmanagement of corpo- rate responsibility and high returns as being mutually exclusive. Inmost cases, however, the truth is completely the opposite. Essentially, companies that act responsibly make a sound investment thanks to their high- quality management and long-term strategy,” Savilaakso points out. An efficient management system enables the company to antici- pate risks, assuring investors of a

better return and fewer unpleasant surprises. “Prudent management of corpo- rate responsibility also leads to wiser investment decisions over the long term. This facilitates the work of the company’s financial managers, too, as investors are less prone to imme- diately sell their stock at the first sign of market fluctuation,” Savilaakso confirms. “Ideally we look for companies that perform extremely well in both areas to include in our investment port- folio.” Coming soon for private investors Compared to traditional equity funds, responsible investment funds have a slightly smaller number of stocks and a lower stock turnover. “Stocks are usually held in a port- folio for an average of 3–5 years, but in practice, the portfolio manager carries out a daily evaluation that forms the basis for stock purchases,” Savilaakso explains. Nordea's Nordic Stars Equity Fund has initially beenmarketed to institu- tional investors, but will also be intro- duced to private investors on a gradual basis.

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