This fund promotes environmental and social characteristics but does not have sustainable investments as its objective. In promoting environmental and social characteristics, the fund takes into account the environment and climate, as well as human rights, employee rights and equal opportunity.
In the promotion of environmental and social characteristics, the fund may also invest in sustainable investments, in accordance with the assessment method applied by the Management Company.
What are the objectives of the sustainable investments that the financial product partially intends to make and how does the sustainable investment contribute to such objectives?
The fund's sustainable investments are made in sustainable bonds or in bonds and interest-bearing instruments issued by companies whose economic activities are considered as having a positive impact on the attainment of one or several environmental or social objectives, alternatively, the company is involved in activities aligned with the EU Taxonomy. The environmental and social objectives are defined based on the Sustainable Development Goals in Agenda 2030.
Sustainable investments primarily contribute through investments in sustainable bonds in which the borrowed capital is used to finance projects with an environmental or social objective. Sustainability-linked bonds can also be considered to be contributing to the referenced objectives in the case in which the financial and/or structural characteristics of the fixed income instrument are linked in some manner to pre-defined sustainability objectives. This also applies to bonds or interest-bearing instruments issued by issuers whose economic activities are considered to be contributing to an environmental objective under the Sustainable Development Goals in Agenda 2030 and/or activities aligned with the EU Taxonomy by exceeding a minimum level for the company's revenue in line with the Sustainable Development Goals or the EU Taxonomy or a combination thereof. In addition to company revenue, the capital expenditures or operational expenditures (CAPEX/OPEX) can be used to assess a company's contributions to the objectives.
To be defined as sustainable investments, the economic activities of the companies issuing the bonds and interest-bearing instruments must contribute to the attainment of an environmental or social objective, while not causing significant harm to any other environmental or social objectives in addition to the company following good governance practices. The control to ensure that bonds and interest-bearing instruments issued by companies do not cause significant harm to any of the environmental or social objectives is based on two components: taking into account the principal adverse impacts on sustainability factors (PAI, Principal Adverse Impacts on sustainability factors), as well as ensuring that the issuing company does not significantly obstruct environmental or social objective through its other products and services. The fund applies the following principles to ensure adherence to the do no significant harm" principle:
1. Exclusion criteria for issuers with activities linked to controversial sectors as well as specific PAI indicators, such as fossil fuels and controversial weapons.
2. Exclusion criteria for issuers with verified violations of international norms and conventions.
3. Assessment that the investments are not considered to cause significant adverse impacts on sustainability factors (PAI). This is conducted through the Management Company's internal PAI tool.
4. Assessment of what products and services in which the issuer of the bond is otherwise involved in, as well as if these can be considered as significantly obstructing a sustainable development.
In the context of taking into account the PAI indicators, the Management Company conducts engagement work through dialogue and active corporate governance so that the issuing companies manage their sustainable risks and any principal adverse impacts on sustainability factors.
With respect to the Management Company's assessment methodology for sustainable investments, including the assessment of the "do no significant harm" principle, read more in the Statement on Principal Adverse Impacts on Sustainability Factors, which is published on our website at
www.handelsbankenfonder.se. A description of the Management Company's PAI tool is also available on the website.