What sustainability means to us
We are long-term investors. Investment decisions are based on the fund managers’ analysis, where factors such as the company’s business model, market position, development opportunities and risks are examined. As part of this analysis, sustainability factors are also assessed in the same way as operational and financial factors. We are convinced that how a company manages sustainability issues affects a company’s future development.
We believe that good companies
- are long term and have sound business ethics
- take responsibility for the impact their business has on the world at large
- have identified all of their risks, including sustainability risks, and they have processes in place to manage and minimize these risks
Examples of sustainability risks include
- lack of business ethics
- lack of environmental engagement
- lack of control over suppliers
In September of 2013 Lannebo became signatories of the PRI, the UN directive for Responsible Investments. Learn more about PRI below.
Sustainability in the investment process
Lannebo is an active manager that carefully chooses fund holdings on the basis of a thorough company analysis. The managers assess factors such as the company’s business model, market position, growth opportunities and risks. How a company takes responsibility towards people, environment and society also affect its future growth. Therefore, before making an investment the portfolio managers complete an internal company sustainability analysis. The managers analyse and assess various areas of sustainability and review whether there have been previous sustainability incidents. The managers then rate the company based on the results of the analysis. The internal analysis also includes a rating from an external sustainability service provider.
Lannebo’s active management means that our managers develop a deep knowledge of each holding, which we believe is a prerequisite for being able to integrate sustainability into the investment process. We are long-term investors and our task is to invest in companies that will be profitable and deliver to our fund investors a good return over time at a reasonable risk.
A comprehensive company analysis is the basis for all investment decisions, where there are many companies we choose not to invest in for various reasons. In addition, there are products that we systematically exclude from all funds – in particular, weapons, alcohol, tobacco, cannabis, gambling, pornography, fossil fuels and companies that systematically violate international conventions. These are in conflict with our investment philosophy of long-term sustainable business models. We do not either invest in companies engaged in controversial weapons such as cluster-munition, antipersonnel landmines, nuclear weapons, biological weapons, chemical weapons and white phosphorus or depleted uranium weapons. Although this is obvious, we want to make it clear as part of our policy.
Sustainability as part of our active ownership
Lannebo is a major shareholder in many Swedish public companies, which results in a responsibility, and an opportunity, to influence the companies. We focus our engagement to the companies where we have a major ownership interest because it is here where we can bring about the greatest impact.
- We engage in dialogue, both proactively and reactively, with company executives regarding their sustainability activities
- We participate in company nomination committees, which include the proposal of the Board Chairman and the directors at the Annual General Meeting
- We exercise the fund’s voting rights at the Annual General Meetings
Being a responsible owner is part of creating sustainable products. The purpose of our pursuing active ownership is to protect unit holders’ common interests and to promote a healthy long-term development of companies and the financial markets, and to promote confidence in the equity market. The foundation of our active ownership is Lannebo Fonder’s ownership policy and the Swedish Code of Corporate Governance. Learn more about our engagement as active owners.