Citadele Bank’s subsidiary, CBL Asset Management, has created Latvia’s first pension plan whose pension savings are invested in businesses which are the most sustainable in their respective industries. Therefore Latvia now has the first pension plan based on responsible investments, BC learned from the CBL Asset.
The new pension plan, “CBL Sustainable Opportunity Investment Plan”, has also been published on the manapensija.lv site, and anyone can apply.
This pension plan differs from others with its investment strategy. When evaluating whether to invest a share of pension savings in the assets of a business, CBL Asset Management’s investment experts analyse not only the financial results of this business, but also its environmental, social and corporate governance, or sustainability aspects, such as the business’ environmental policy, whether the business sufficiently acknowledges the risks of climate change, and whether they behave responsibly towards employees and the local community among others.
“In our daily lives, we are used to thinking about protecting the environment by purchasing products made of environmentally-friendly materials or which are not tested on animals. But, before now, sustainable finance has rarely been discussed in Latvia. Now we can take care of the sustainable development of our world by choosing a pension plan in which assets are invested in businesses which behave responsibly towards the environment, natural resources and society,” explains CBL Asset Management Chairman of the Board Kārlis Purgailis.
“Even from a profitability point of view, it is becoming increasingly important to evaluate whether a business in which we are planning to invest is sustainable. Worldwide precedents and studies confirm the direct effect of sustainability on the business’ financial results and thus investment value. We can take a simple example: by not paying sufficient attention to environmental risks, a business can prompt a local-level environmental disaster, which will negatively impact the share price of this business and thus also the pension plan participants’ savings. When we invest in businesses which pay increased attention to the sustainability of their actions, we can significantly decrease risks,” says Purgailis, adding: “now, when selecting a pension plan, each of us can influence what kind of businesses our savings are put into.”
The “CBL Sustainable Opportunity Investment Plan” has an active investment policy: the maximum proportion invested in shares is up to 75% of assets. This means that it is most suitable for people aged up to 40 years.
You can apply for this level 2 pension plan through Latvija.lv, as well as at State Social Insurance Agency (SSIA) customer service centres. More information on this new investment plan can be found on the website pensija.lv.