Communication on Progress

Participant
Published
  • 2021/09/14
Time period
  • September 2020  –  September 2021
Format
  • Stand alone document – Basic COP Template
Differentiation Level
  • This COP qualifies for the Global Compact Active level
Self-assessment
  • Includes a CEO statement of continued support for the UN Global Compact and its ten principles
  • Description of actions or relevant policies related to Human Rights
  • Description of actions or relevant policies related to Labour
  • Description of actions or relevant policies related to Environment
  • Description of actions or relevant policies related to Anti-Corruption
  • Includes a measurement of outcomes
 
  • Statement of continued support by the Chief Executive Officer
  • Statement of the company's chief executive (CEO or equivalent) expressing continued support for the Global Compact and renewing the company's ongoing commitment to the initiative and its principles.

  • Statement of Continued Support

    September 2021

    To our stakeholders:

    I am pleased to confirm that LD Pensions reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

    In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

    Sincerely yours,

    Dorrit Vanglo
    CEO

Human Rights
  • Assessment, policy and goals
  • Description of the relevance of human rights for the company (i.e. human rights risk-assessment). Description of policies, public commitments and company goals on Human Rights.

  • LD Pensions operate in a highly developed country where human rights are generally upheld,. LD Pensions employ with highly skilled labour, which makes our internal operations less likely to violate any human rights.

    Our main service is providing pensions for our members, including investing in securities issued by companies. The main area of concern is therefore the behavior of the companies in our investment portfolio. We seek to avoid financing companies that violate human rights.

    The sustainable goal of our investments, which is articulated in our policy for responsible investing, is to contribute to sustainable and responsible business behavior in the companies we invest in. This includes high focus on human rights.

  • Implementation
  • Description of concrete actions to implement Human Rights policies, address Human Rights risks and respond to Human Rights violations.

  • It is our pledge to incorporate human rights screenings of our investment portfolio to avoid investing in companies that consistently or deliberately violate any human rights. If a company violates human rights, the company will be identified, and we will engage with that company with the goal of stopping the violation and change policies to avoid a later violation. If the company does not change its behavior, we will divest from the company.
    The screening and engagement is undertaken in cooperation with an international renowned engagement company in order to be able to reach more companies and carry additional weight in the engagement process.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates performance.

  • The screening of our investment portfolio for companies violating human rights is based on data from Sustainalytics. Sustainalytics investigates news on potential violations across the portfolio and determines whether the company is violating any human rights. Sustainalytics then determines the correct engagement level for the company and carries out the change making engagement. LD Pensions also screens the portfolio for violations via quarterly reports of companies operating in countries and areas of high risk of human rights violation. Those companies will be monitored closely.

Labour
  • Assessment, policy and goals
  • Description of the relevance of labour rights for the company (i.e. labour rights-related risks and opportunities). Description of written policies, public commitments and company goals on labour rights.

  • LD Pensions operates in a highly developed country where labour rights are generally upheld. Internal policies are in place which makes our internal operations less likely to violate any labour rights. Four out of the seven LD Pensions’ board members (including the Chairman) are representatives from unions and worker associations, which have very high focus on labour rights.
    LD Pensions supports freedom in choice of union, large degrees of freedom in planning your own work assignments and 6 weeks + 4 days paid annual leave.

    Our main service is providing pensions for our members, which include investing in securities issued by companies. The main area of concern is therefore the behavior of the companies in our investment portfolio. The sustainable goal of our investments, which is articulated in our policy for responsible investing, is to contribute to sustainable and responsible business behavior in the companies we invest in. This includes a high focus on labour rights.

  • Implementation
  • Description of concrete actions taken by the company to implement labour policies, address labour risks and respond to labour violations.

  • It is our pledge to incorporate labour rights screenings of our investment portfolio to avoid investing in companies that consistently or deliberately violate any labour rights. If a company violates labour rights, the company will be identified, and we will engage with that company with the goal of stopping the violation and change company policies in order to avoid a later violation. If the company does not change its behavior, we will divest.
    The screening and engagement is undertaken in cooperation with an international renowned engagement company in order to be able to reach more companies and carry additional weight thereby having more power in the engagement process.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates performance.

  • The screening of our investment portfolio for companies violating labour rights is based on data from Sustainalytics. Sustainalytics investigates news on potential violations across the portfolio and determines whether companies are violating any labour rights. Sustainalytics then determines the correct engagement level for the specific companies and carries out the change making engagement. LD Pension also screens the portfolio for violations via quarterly reports of companies operating in countries and areas of high risk of labour rights violation. Those companies will be monitored more closely.

Environment
  • Assessment, policy and goals
  • Description of the relevance of environmental protection for the company (i.e. environmental risks and opportunities). Description of policies, public commitments and company goals on environmental protection.

  • Our environmental impact of operations is limited. Our business does not manufacture physical products, and our activities do not produce harmful emissions.
    The only waste we produce is at our office, where we have access to recycling facilities for paper. The only water we use is for our employees’ drinking and sanitary needs. The only energy that we use is for our office (a small office in a shared building). Our business only procures office equipment and consumables.
    We do not undertake any manufacturing, and other items (e.g. old IT equipment).

    Our main service is providing pensions for our members, which includes investing in securities issued by companies. The biggest challenge facing our business is ensuring that the companies in our portfolio cause no harm and contribute positively to society.
    We have a responsible investment policy, which actively supports the UN SDG via exclusions, allocation, engagement and voting. The ultimate goal of such a policy is to support and encourage the companies in our investment portfolio to act sustainably and responsibly towards all stakeholders, including the environment.

  • Implementation
  • Description of concrete actions to implement environmental policies, address environmental risks and respond to environmental incidents.

  • In 2020, we have directly or collectively engaged on a number of companies in the portfolio (150+). Environmental protection is one of the topics being discussed, either because a company has violated one of the environmental principles of Global Compact or because environmental risk is perceived high in a company. Finally, we have engaged collectively with other pension funds against the construction of a coal-fired power plant in Vietnam.

    We acknowledge that raising awareness about environmental protection is only a part of the solution. This is the reason why we have allocated 10% of our equity portfolio to a fund that invests in companies with business models centered on environmental restoration and wellbeing. The fund has a limited investment universe since it invests in companies with a purpose, product or service that are in line with the UN SDG and match the Future-Fit Business Benchmark’s Positive Pursuits.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates environmental performance.

  • We currently monitor the environmental progress qualitatively. We are receiving quarterly and annual reports from engagement partners about engagement activities and progress of the individual engagements. Most engagements result in some form of progress.

    A lack of transparency and relevant data currently hinder monitoring the investment portfolio's environmental progress qualitatively, but we are actively seeking to close this disclosure gap by engaging our mandated investment managers. We are expecting to be able to quantify the progress next year.

    We will continue to engage companies on environmental protection and sustainability as we consider engagement the main tool for changing company behavior.

Anti-Corruption
  • Assessment, policy and goals
  • Description of the relevance of anti-corruption for the company (i.e. anti-corruption risk-assessment). Description of policies, public commitments and company goals on anti-corruption.

  • We operate in one of the most developed and least corrupt nations, which makes the risk of experiencing corruption, bribery and extortion less of a risk. However, the nature of our business means that relatively few individuals are making decisions about the allocation of significant sums of money via our mandates.
    However, our investment mandates are awarded based on EU public procurement processes, which secures a regulated process, fully disclosed evaluation criteria and an audit trail to avoid any risk of bribery. On top of that, multiple people in the organisation are involved in the process, including board sign-off, which secures that the final decision is not based on a potentially compromised individual's recommendation.
    We also have policies and guidelines in place for handling private, non-public information, and for accepting gifts and representation as part of the daily relationships with current and prospect counterparts.

  • Implementation
  • Description of concrete actions to implement anti-corruption policies, address anti-corruption risks and respond to incidents.

  • Rigorous processes are in place to mitigate potential ethical breaches, and it is essential that we continue to identify and prevent specific issues proactively.
    Policies, procedures and checks are in place for all high-risk areas involving money, personal data and procurements. Policies and procedures are reviewed regularly (at least annually) to mitigate risk of ethical breaches.
    We are governed by the Danish Public Administration Act, which imposes an obligation on LD Pensions to be able to account for its administration. This means collecting and storing data in a systematic way across the business. The Danish Financial Authority reviews policies, processes and governance regularly.
    LD Pensions also have a whistleblower line to an external legal counsel.

  • Measurement of outcomes
  • Description of how the company monitors and evaluates anti-corruption performance.

  • Policies, processes and governance is reviewed regularly by the board and the Danish Financial Authority.
    External audits on every risk-taker's personal dealings are undertaken semi-annually.