It is our belief that sustainable development is only possible if companies take responsibility for the impact they have on the environment and on society as a whole. As a specialized investor in healthcare, we have a relatively good starting point as the portfolio companies work for better health.
Sustainability for HealthInvest
A cornerstone of HealthInvest’s view of sustainable investments is that the fund should not profit from companies’ shortcomings in terms of environmental and social responsibility. If a company has major shortcomings from a sustainability perspective, the fund should not be invested. We also believe that for a long-term investor, it is necessary to integrate sustainability aspects, such as the environment, social responsibility and corporate governance, into management and that this contributes to a good risk-adjusted return over time. Both return potential and risk in the fund’s various investment alternatives depend on how companies handle sustainability.
HealthInvest Partners specializes in investments in the healthcare sector. The companies in the sector work, for example, with caring for sick people, developing medicines to cure or alleviate disease or manufacturing medical devices. All in all, the companies promote health and give us a good starting point for sustainable investments.
Sustainability in the investment process
HealthInvest’s investment process is primarily about finding undervalued shares. The sustainability perspective is integrated into the analysis and helps to identify both potential and risks.
It is the fund management that performs the sustainability analysis either directly or through delegation. An important part is finding sustainability risks linked to each investment, i.e. risks linked to the environment, social responsibility and corporate governance. The process means that the management clarifies the financial risk for the fund that is linked to sustainability aspects and ensures that such risks are highlighted in the analysis. Sustainability risks are integrated into the company analysis and are taken into account when assessing an investment in a company or selling a holding.
The investment analysis also identifies shortcomings from a sustainability perspective in the portfolio holdings.
Sustainability and engagement
The fund company believes that companies have a responsibility to operate in accordance with laws, conventions and international guidelines. HealthInvest expects corporate executives to work actively to identify risks, opportunities and consequences from an economic, environmental and social perspective, as well as to ensure long-term success through sustainable strategies for their operations. Furthermore, the fund company expects the companies’ boards to ensure adequate policies and processes and monitors the effectiveness of the company’s management of issues and risks linked to environmental issues, social responsibility and corporate governance.
HealthInvest’s principles for shareholder engagement describe what we expect from the companies in which we are invested. All portfolio companies have these principles sent to them by the portfolio manager in connection with our investment.
At meetings with companies, we bring up relevant sustainability issues for discussion.
If the fund is invested in a company that proves to be deficient in its sustainability approach, we will contact the company in question to make an impact. If this effect does not yield results, the fund’s holdings must be sold within 12 months.
Resources and commitments for sustainability
HealthInvest Partners has acceded to the United Nations’ ”Principles for Responsible Investment” (”PRI”). This means that the fund company supports the six principles that the PRI initiative is about and which are described in more detail at www.unpri.org.
- We will incorporate ESG issues into investment analysis and decision-making processes.
- We will be active owners and incorporate ESG issues into our ownership policies and practices.
- We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will report on our activities and progress towards implementing the Principles.
Follow-up of sustainability work
Follow-up of the sustainability work is done in the fund’s annual report, which is available here on our website.
Further information about our sustainability work can be found in the fund’s full and half-year report and in the fund’s prospectus.