LSR's Domestic Portfolio
Assessed on the basis of environmental, social and governance factors (ESG)
An important part of enforcing a sustainability policy is analysing ESG information and publishing the results publicly. In terms of sustainability, LSR encourages the companies in which the fund invests to show transparency and publicly disclose how the company's activities comply with recognised standards in terms of, for example, sustainable operation. LSR's role as an investor is to analyse this information for individual investments and the portfolio as a whole and examine the performance of the investment activities.
ESG assessment of domestic assets
LSR's domestic portfolio is assessed based on so-called ESG factors.
Environmental factors refer to how a company manages the environmental impact of its activities.
Social factors include to how a company treats its employees, suppliers, customers and the community in which it operates.
Governance factors include company management, working conditions, internal control and shareholder rights.
An ESG assessment provides an overview of how companies perform in terms of sustainability in operations and what ESG risks there may be in their operations. The ESG rating of companies in LSR's portfolio is based on the ESG rating from Reitun hf. which bases its assessment both on public information and meetings with company representatives. Companies are given points for environmental issues, social issues and governance on a scale of 0 to 100, with 100 being the highest score. In the graph below, you can see a comparison of LSR's domestic portfolio between years, including asset position on 31 December of each year, by rating of companies in the portfolio.
ESG rating of LSR's Domestic Portfolio
Ratings scale
Portfolio companies are rated from A1-D, with A1 being the highest possible rating and D the lowest.
A1-A3
Outstanding
B1-B3
Good
C1-C3
Average
D
Poor
| ESG Rating | Lower limits | Upper limits |
|
A1 |
97 | 100 |
|
A2 |
92 | 96 |
|
A3 Arion banki hf., ÍL-sjóður, Kvika banki hf., Landsbankinn hf., Orkuveita Reykjavíkur, Ríkissjóður, Ölgerðin Egill Skallagrímsson hf. |
86 | 91 |
|
B1 Íslandsbanki hf., Marel hf., Sjóvá-Almennar tryggingar hf., Heimar hf., Vátryggingafélag Íslands hf. |
80 | 85 |
|
B2 Akureyrarbær, Alvotech S.A., Bláa lónið, Brim hf., Búseti húsnæðissamvinnufélag, Byggðastofnun, Eimskipafélag Íslands hf., Embla Medical, Festi hf., Hampiðjan hf., HS orka hf., Íslandshótel hf., Kópavogsbær, Landsnet hf., Lánasjóður sveitarfélaga ohf., Rarik ohf., Reitir fasteignafélag hf., Reykjavíkurborg, Sýn hf. |
70 | 79 |
|
B3 Eik fasteignafélag ehf., Félagsbústaðir hf., Hagar hf., HS Veitur hf., Icelandair Group hf., Síldarvinnslan hf., Síminn hf., Sveitarfélagið Árborg. |
60 | 69 |
|
C1 Iceland Seafood International hf., Nova klúbburinn hf. |
50 | 59 |
|
C2 Alma leigufélag ehf. |
40 | 49 |
|
C3 |
30 | 39 |
|
D |
0 | 29 |
Breakdown of points into EGS elements
When the rating in LSR's domestic portfolio is summarised, it can be seen that the overall rating of the portfolio is 81 out of a possible 100, which is an increase of one point between years. The weight of environmental factors, social factors and governance factors varies for each underlying company. In the table below, you can see the breakdown of the rating into environmental factors, social factors and governance factors.
81/100
Environmental factors
83/100
Social factors
78/100
Governance factors
81/100
Total
0
High risk
81
100
Low risk