Integral Risk Management Framework SNPS
SNPS ensures that its business operations are conducted in a controlled and ethical manner, and in that context is responsible for the management of the risks. SNPS has set up an integrated risk management control framework, the guiding principle of which is to have a control structure that fits the profile of SNPS and the risks that SNPS faces. The framework helps the board to structurally identify risks from within the long-term objectives of SNPS and with due consideration of the internal and external environment, and to set up a control structure accordingly. Within this framework, risks and control measures are identified, the impact and likelihood of these risks are determined, and actions are defined to mitigate the risks to the desired level. SNPS assesses the (development of the) risks every quarter, or more often if (market) conditions so warrant, and takes appropriate measures.
The integrated risk management control framework of SNPS is based on a continuum. This means that the control measures that apply within the administrative bodies of SPN, Achmea Pensioenservices N.V. and Achmea Investment Management B.V. are taken as a starting point for the design of the SNPS management organisation. By building on the internal controls of these organisations, properly understanding these control measures, having them independently validated where necessary and actively monitoring them, the SNPS management organisation is set up effectively.
To manage risks as well as possible, it is essential to consider them in their mutually interdependent context. The policy of SNPS is aimed at managing risks in such a way that there is a careful, responsible and balanced weighing up between the risks on the one hand and, on the other, the returns, stability in the (expected) pension, efficiency in administration and costs. The Board emphasises that some risks can manifest themselves differently than estimated and/or expected beforehand, for example due to demographic changes, risks of wage inflation and developments on the financial markets.
Embedding sustainability risks in investment decision-making procedures
An important part of SNPS's investment policy is the management of investment risks.
Within the context of Socially Responsible Investment, SNPS also has policies for embedding sustainability risks in its investment decision-making procedures. But what is a sustainability risk? This is an event or circumstance at environmental, social or governance level that, if it does occur, might have an actual or potentially material adverse impact on the value of the investment.
It is therefore of paramount importance that SNPS applies procedures to minimise ESG risks, which include sustainability risks. This risk is mitigated by:
- Periodically assessing the portfolio for these (potential) risks.
- Monitoring the activities of SNPS as an ‘engaged shareholder’ in terms of exercising voting rights, engaging in dialogue and exclusion
- Making ESG factors part of the manager selection process