Sitra as an investor

Sitra’s work for the future is funded by the returns from its capital. Responsibility is an essential part of Sitra’s operation – also as regards investment activities.

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What is it about?

The Bank of Finland and the Finnish Parliament gave Sitra an endowment capital of approximately 84 million euros. This endowment capital has laid the foundation for Sitra’s current investment assets, the returns on which provide financing for the future-oriented work at Sitra.

At the end of 2019, the market value of all Sitra’s investment assets was 933 million euros.

Figure 1. Investments by asset type at the end of 2019

The market value of our endowment capital investments was 874 million. The endowment capital investments yielded a return of 17.2% , with a five-year average of 6.6%.

The return on all investment assets was not calculated in the same manner as that on endowment capital investments because, thus far, venture capital investments and investments in portfolio companies have been regarded as part of Sitra’s operations. Starting from 2020, returns will be calculated for all investment assets, and the target rate of return is 4% per year.

Sitra’s investment assets are mainly invested in funds. Sitra makes the decisions on the allocations, but the funds decide on the individual investment targets independently, as per the fund’s rules.

No new corporate investments have been made since 2014. At the end of 2019 Sitra’s investment portfolio still included 12 companies.

Responsible investment

We manage Sitra’s investments in a secure and profitable manner. ESG integration means that in addition to risk and return, environmental, societal and corporate governance (ESG) issues are included in all investment decisions.

The UN Principles for Responsible Investment (PRI) serve as instructions and guidelines for Sitra’s responsible investment activities. Sitra signed the PRI in 2015 and committed itself to the following six Principles.

  • We will incorporate environmental, social and corporate governance (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 each report on our activities and progress towards implementing the Principles.

National legislation and the international UN Global Compact principles governing business and society are taken into account when addressing responsibility. The UN Global Compact includes 10 principles concerning the environment, corruption, human rights and labour. They serve as an international framework for Sitra’s responsible investment activities.

Sitra’s investments are mainly made through funds. Therefore, we require that our asset managers actively monitor companies’ ESG issues as part of their investment activities. The minimum requirement for fund investments is that the asset manager has signed the PRI or has a responsible investment policy.

We develop our responsible investment practices regularly. Have a look at Sitra’s Responsible investing guidelines (updated in October 2019).

Partnerships

Climate Action 100+

Finsif

Institutional Limited Partners Association (ILPA)

Invest Europe

Finnish Venture Capital Association

UN Principles for responsible investment, PRI

Yritystutkimus ry

 

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