Sustainability

Sustainability at Titanium

Titanium’s primary responsibility is to act in the best interests of the customer. Titanium’s business is based on customer orientation, professionalism, insight and trust. In its operations, Titanium also aims to take sustainable development into account and respond to its customers’ growing interest in sustainable investing.

From the point of view of asset management, sustainable investing means that, when making investment decisions, the risks and opportunities related to the environmental factors, social responsibility and good governance are taken into account besides financial factors.

Titanium wants to participate in promoting and strengthening the implementation of sustainable investing in professional investment activities. In order to participate in the development and reporting of sustainable investing, Titanium Fund Management Company Ltd has signed the UN Principles for Responsible Investment and is a member of Finland’s Sustainable Investment Forum (Finsif).

Titanium constantly strives to bring new perspectives and ideas to develop the sustainability of its operating methods.

Titanium Fund Management Company Ltd has published the Principles for Sustainable Investing to help to understand the choices made in investment operations.

Consideration of Sustainability Risks at Titanium
13 May 2024

A sustainability risk refers to an environmental, social, or governance (ESG) event or condition which, if realized, could have a material negative impact on the value of an investment.

Titanium Rahastoyhtiö Oy

Titanium Rahastoyhtiö Oy seeks to manage sustainability risks by integrating their consideration into its investment decision-making processes. The manner and extent to which sustainability risks are taken into account vary by financial product.

With regard to the real estate funds managed by Titanium Rahastoyhtiö Oy, sustainability risks are managed by conducting due diligence reviews at the acquisition stage of investment targets. These reviews assess the investment target, tenants, and, in the case of new construction projects, contractors.

For financial products that utilize equities and/or ETF funds, Titanium Rahastoyhtiö Oy aims to manage sustainability risks, among other means, by reviewing ESG ratings assigned to companies by external ESG assessment providers when making new investments. In equity and ETF selection, the company particularly applies a Best-in-Class strategy and thematic investing. As a result of these strategies, the funds’ investment targets tend to include companies that are exposed to lower-than-average sustainability risks compared to other industry participants.

Over the long term, the consideration of sustainability risks is expected to have a positive impact on the returns of the financial products offered by Titanium Rahastoyhtiö Oy as sustainability risks decrease.

Titanium Sijoituspalvelut Oy and Titanium Life Oy

For Titanium Sijoituspalvelut Oy and Titanium Life Oy, a significant portion of relevant sustainability risks relate directly to the financial products for which they provide advice. Consequently, the manner and extent of considering sustainability risks vary by financial product.

Titanium Sijoituspalvelut Oy and Titanium Life Oy seek to focus their existing partnerships on service providers and financial products that have begun to take sustainability risks into account in their own operations and in the investment decisions underlying the advised products.

When offering a financial product, its suitability and/or appropriateness is assessed; however, sustainability risk considerations are not currently included in investment advice or in personal recommendations relating to insurance. If a client independently raises the importance of considering sustainability risks, suitable investment options that take sustainability risks into account are offered.

To the extent that Titanium Life Oy distributes insurance as an insurance agent on behalf of an insurance company, Titanium Life Oy considers sustainability risks in accordance with the instructions of the insurance company it represents at any given time.

Personnel and the Consideration of Sustainability Risks in Remuneration Policies
13 May 2024

Titanium regularly trains its personnel in matters related to responsibility and the consideration of sustainability risks.

Titanium seeks to manage its own sustainability risks related to society and governance, among other means, by monitoring employee well-being and satisfaction. Titanium applies remuneration systems that reward employees, tied agents, and insurance intermediary partners for long-term work that aligns with the best interests and long-term objectives of both clients and the company (e.g., deferred sales commissions and employee stock options).

According to Titanium’s view, responsible operations (including the consideration of sustainability risks) support the long-term success of responsibly operating companies and the returns of financial products. The remuneration systems applied at Titanium are aligned with its business strategy and long-term interests. Therefore, Titanium considers its remuneration principles to be consistent with the consideration of sustainability risks.

Sustainability risks are taken into account in all proprietary products of Titanium Rahastoyhtiö Oy. Accordingly, employees of Titanium Rahastoyhtiö Oy do not receive remuneration for offering financial products in which sustainability risks have not been considered.

Principal Adverse Impacts of Investment Decisions, Investment Advice, and Insurance Advice Are Not Considered
13 May 2024

Titanium Rahastoyhtiö Oy, Titanium Sijoituspalvelut Oy, and Titanium Life Oy (“Titanium”) do not currently consider the principal adverse impacts (PAIs) of their investment decisions, investment advice, or insurance advice on sustainability at the entity level in accordance with Article 4 of Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector (“SFDR”).

Principal adverse impacts refer to the negative effects of investment decisions or investment advice on sustainability factors. Sustainability factors include matters related to environmental, social, and employee issues, respect for human rights, and the prevention of corruption and bribery.

Titanium has assessed that the data required to meet the regulatory requirements is limited, poorly comparable, and partly unreliable. Market practices for assessing, measuring, and monitoring principal adverse impacts are not yet fully developed or established. In addition, the CSR Directive governing sustainability reporting mainly applies to companies operating within the EU.

In particular, the equity funds managed by Titanium invest primarily outside the EU, meaning that consideration of EU-legislation-based principal adverse impacts in investment decision-making cannot be considered appropriate. For this reason, Titanium is unable to provide investors with a high-quality and informative statement on principal adverse impacts (PAI statement).

Accordingly, Titanium does not currently consider principal adverse impacts on sustainability factors. As market practices become more defined and data availability improves, Titanium will assess its ability to begin considering principal adverse impacts on sustainability factors. This assessment is conducted at least annually.