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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
doing good
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.
“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.”