ESG Focus Areas
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Engagement Case: Stora Enso 39 In early August 2024, it was revealed that Stora Enso's logging operations had caused severe damage to a critically endan- gered freshwater pearl mussel population. This incident has understandably raised concerns about the company's environ- mental practices and oversight. As responsible investors, we take such matters very seriously. We promptly engaged with Stora Enso's management to understand the full extent of the situation and the company's response. Through multiple interactions, including emails and meetings with Stora Enso's CEO, Head of Sustainability, and Head of Wood Supply Finland, we delved into the incident's details and the company's response. During this engagement, Stora Enso acknowledged that their guidelines for protecting mussel habitats were not followed in this instance. They empha- sized that this was a "non-compliance incident" rather than a systemic problem. However, our impression from the discus- sions was that there was improvement needed in their processes, particularly related to the flow of information flow and IT systems. We were encouraged to learn that Stora Enso had taken immediate steps to address these issues. They temporarily halted logging operations in sensitive areas across Finland and conducted a thorough review of their practices. The company has also committed to working closely with biodiversity protection agencies to improve their protocols. While we are disap- pointed by this incident, we view it as an opportunity for Stora Enso to significantly enhance their environmental safe - guards and operational processes. Our expectation is that this event, combined with the enhanced environmental practices, will benefit the company in the long term. Moreover, as active owners we have recently joined a collaborative engagement, Nature Action 100 where we engage with Stora Enso. With this engagement initiative we strive to continue to monitor the company´s situation closely and push for tangible improvements in line with the expectations of the initiative.
Policy Support Investors Policy Dialogue on Deforestation (IPDD)
by issuing a statement supporting the EU Deforestation Regu- lation, reinforcing our dedication to sustainable investment practices worldwide.
As a founding member of the Investor Policy Dialogue on Deforestation (IPDD), we are at the forefront of a global initia- tive uniting 78 investors across 21 countries to combat defores - tation. Since its inception in July 2020, IPDD has been actively engaging with key stakeholders in countries with critical for- est ecosystems. Our mission is to ensure long-term financial sustainability through promoting responsible land use, forest management, and human rights. We play a pivotal role in the Management Committee and lead efforts in Brazil and Indonesia. In Brazil, we've made sig - nificant strides in implementing deforestation commitments post-election. Despite political challenges in Indonesia, we've successfully collaborated with local financial institutions and co-hosted a high-profile ESG investing webinar. Most recently, IPDD demonstrated its commitment to global forest protection
Outlook In 2025, we will continue our engagement workstreams while further utilizing and integrating data sources to increase individual, sector and portfolio level assessments of the nature-related impacts and dependencies of our investments. In line with our commitments under the Finance for Biodiversity Pledge, we prepared initiation targets during 2024, which will be published in an update of our Biodiversity Whitepaper during the year. These tar- gets will broadly aim towards pillars of governance, poli- cies, education as well as assessments and aim to further anchor the topic of nature and biodiversity across NAM.
39) Reference to companies or other investments mentioned should not be construed as a recommendation to the investor to buy or sell the same but is included for the purpose of illustration.
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