KLP AND SOCIETY PAGE 1 Together we generate values for the future: Sustainability report 2008 KLP AND SOCIETY PAGE 3 Table of contents 4 Foreword by our CEO 6 Values and foundations 10 Municipal high-risk sport 12Practicing what they preach 14 Leaping off the KLP list 16 Competition for the Blue Cross 18 Report 2008 How? 20 Customers 24 The environment Our customers have entrusted more than 200 billion 27 Society Norwegian kroner to us. These funds represent future pensions 32 The workplace 36 Plan of Action 2009 and compensation payments for public sector employees. By 38 GRI table incorporating strategies related to the climate, nature and society 39 Organisation and management in our management of these funds, we are making a major con tribution to a safer and more predictable future. But we cannot - achieve such ambitious goals alone. We rely on close cooperation with customers, owners, the companies in which we invest and numerous other partners to build the foundations for a sound and long-term process of value creation. PAGE 4 KLP AND SOCIETY KLP AND SOCIETY PAGE 5 However, there’s no A reliable point preaching to others if you can’t practice what you partner preach. In June 2008, KLP Skadeforsikring As every good sailor knows, a strong anchor can keep you was the first insurance safe when the storm comes. As a responsible administrator of company ever to customer funds in times of financial unrest, and as a shining achieve Eco-Light- Eco-Lighthouse in the era of climate change, KLP reaps the house certification. benefits of its long-term dedication to value-based management and motivated employees. KLP has an important role to play for society of NOK 1.9 billion to our customers’ premium we have also taken on active ownership in a insurance company ever to achieve Eco- our employees spent the summer helping out phone calls from our customers in the munic- in general. As administrator of pension fund. At KLP, we keep a steady course! number of companies, allowing us to force Lighthouse certification. We need to examine at the Blue Cross summer camps for children ipal sector, reporting difficulties in procuring funds for more than 550,000 Norwegians, through improvements in the areas men- our own procedures and policies so that and parents – a very rewarding experience. loans. As we previously mentioned, we have the company must sustain a long-term Our precautionary approach also helps us tioned above. We are in constant contact we can identify further potential for envi- applied a precautionary approach, setting up and universal perspective. After all, 40 or face a number of other challenges. Among with all excluded companies, attempting to ronmental protection. We need to measure KLP’s main goals are sustained growth and buffers for difficult times and are proud to 60 years down the line, we’ll still be here, these is our work with municipalities, health encourage them to change their ways. We our own environmental performance and profitability. The best way to achieve these confirm that, in the last year alone, we were watching the newly qualified nurses and companies and businesses, helping to reduce were delighted to see the result of such encourage and motivate our employees to goals is to remain in close contact with our able to grant an extra 5 billion kroner in loans nursery assistants of today enjoying their damage to property or personnel injuries, contact in 2008, when Sodexo amended its make environmentally-friendly choices. In the customers, and to develop services which will to Norwegian municipalities. 2009 is most well-deserved pensions. But who can say both in number and in scope. Our strategy practice to such a degree that we were able autumn of 2008, KLP began preparing the help them become even better employers probably going to be a tough year for a num- what our society will look like by then. The is to help others establish a good working to re-introduce the company to our portfolio rest of the group for environmental certifica- and service providers. Last year, we extended ber of municipalities, companies and financial only thing we can be sure of is that things environment. Our efforts are also required to after only one year of exclusion. tion. Our goal now is for the parent company, our business concept to cover our custom- institutions. But at KLP, we have the strength are going to change. face other global and long-term challenges KLP Kapitalforvaltning and KLP Bedriftspen- ers’ employees and to provide them with a required to face any challenge and we intend such as climate change, depletion of natural Our policy of active ownership has been sjon to join our general insurance business as number of new products. These included our to sustain our long-term efforts towards What better proof of how quickly change resources and unacceptable living and work- expanded to cover new areas in 2008. an Eco-Lighthouse by June 2009. general insurance service for the private mar- securing future pensions for our customers can happen than the current financial crisis? ing conditions. The project Sustainable Value Creation, has ket, launched in 2008 towards public sector and supplying reliable insurance products in a We have always adopted a precautionary submitted a survey to all the companies on Our employees at KLP put on an impres- employees as the main target group. On 29 socially responsible manner. approach, setting aside substantial amounts At KLP, we take our responsibility as an inves- the Oslo Stock Exchange Benchmark Index. sive performance during the TV appeal in January 2009, KLP was granted a banking to form solid buffers to tide us through tor very seriously indeed. We do not want This survey uncovered a major development 2008. As we have already mentioned, the licence. KLP has a long history of providing more difficult times. This strategy has proved to invest our customers’ funds in companies potential among Norwegian companies to money raised by the employees went to housing loans – but are now happy to provide extremely important for our customers with an unacceptable behaviour. The UN’s improve on their systems for safeguarding the Blue Cross (a partner of KLP for many customers with a bank deposit service also. and owners, and for us as an organisation. Global Compact organisation and principles environmental, social and ethical issues. KLP years) and their projects to help children and The new KLP Banken will play a central role If there’s one thing customers are look- for responsible investment are indispensable is the driving force behind this project, which young people suffering the affects of drug in our development of services for the private ing for when it comes to their pensions, it’s tools for KLP in choosing worthy candidates receives the support of 12 of Norway’s larg- and alcohol abuse among adults. More than market. predictability. This means being able to rely for investment. Since 2002, we have ex- est investors. 100 KLP employees took part on a number on agreements and having no unpleasant cluded companies from our portfolio which of projects to raise funds for the appeal. Our social responsibility means offering sup- surprises in the form of unexpected bills or are guilty of breaching international norms However, there’s no point preaching to oth- Motivated employees are essential at KLP, and port when needed. As the full impact of the increased costs. KLP is proud to report profits for human rights, labour rights, environmental ers if you can’t practice what you preach. In we are always happy to help our employees financial crisis became apparent last autumn, CEO of NOK 374 million in 2008 and the transfer protection and business ethics. Since 2006, June 2008, KLP Skadeforsikring was the first take part in voluntary work. Last year, 10 of we received a number of concerned tele- Sverre Thornes PAGE 6 KLP AND SOCIETY KLP AND SOCIETY SIDE 7 KLP’s principal goal is to generate value for the company’s customers and owners in a financially sound and socially and Values and environmentally responsible manner. foundations 1: 2: 3: 4: 5: 6: 7: 8: Vision and values Management system Global Compact Ethical guidelines Social responsibility Environmental policy Strategy for respon- The UN’s principles strategy sible investments for responsible invest- KLP’s vision is to be the best KLP employs commercial prin- Global Compact is a network The ethical guidelines are in- In 2007, KLP developed an partner for the days to come. Our ciples with growth and profit- initiated by the UN which mo- tended to encourage employees The corporate management has environmental policy. This is a Our investment strategy reflects ment (UN’s PRI) cooperation with customers and ability the main goals. However, bilises businesses and voluntary and, where suitable, members of adopted a social responsibility document which ratifies the our aim to support and respect The UN’s principles for respon- other interested parties shall be the manner in which these goals organisations towards a sustain- boards and controlling bod- strategy which, together with the company’s intention to establish human rights, workers’ rights, the sible investment are volun- signalised by KLP’s values: open, are achieved is far from immate- able world. KLP has been a ies when exercising their rights company’s values and ethical binding requirements on it’s environment and ethical busi- tary and inspiring. However, clear, responsible and committed. rial. The group’s market-related member of Global Compact since and duties on behalf of KLP, guidelines, substantiates the own environmental performance ness principles, in accordance by signing the principles, you Our value-based management and financial goals are subject 2002.