As a Citadele Group company AS “CBL Atklātais pensiju fonds” (Pension Fund) is committed to adhering to the Citadele Group's ESG policy, ESG risk policy and other sustainability-related policies. For Citadele Group, sustainability means developing business in accordance with social, environmental and economic goals. This includes respect for the environment and responsible and ethical practices in the decisions we make, the products we offer and the services we provide. CBL Life supports this kind of approach and acts within the business framework to achieve the Citadele Group`s goals on the domain of ESG.
Pension Fund provides information on the sustainability of financial products, while the sustainability information at the entity level coincides with the information of the Citadele Group, which is reflected in the annual Sustainability Reports until 2023 and in Annual Reports from 2024, because at the entity level we work together in sustainability-related activities. The Citadele Group's Sustainability Report as part of Financial Report 2024 has been prepared in accordance with the requirements of Directive (EU) 2022/2464 of the European Parliament and of the Council on Corporate Sustainability Reporting (CSRD) and the European Sustainability Reporting Standard (ESRS), as well as the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).
Citadele Group’s Sustainability Strategy
Citadele Group has committed to align its operations and portfolio with the goals and the timeline of the Paris Agreement. To achieve this, Citadele Group has set the goal of becoming climate neutral by 2050, achieving net zero emissions, including financed emissions. To reach the ambition, the Citadele Group will be focusing on:
- Reducing financed emissions,
- Carbon-neutrality in its own office operations, and
- Financing the transition by providing green financing and investment options.
Citadele Group’s largest environmental impact comes from financing and investing activities. At the same time, it is no less important to ensure that our own activities and consumption are sustainable.
We are mindful of how Citadele Group's business decisions can impact the environment and society, both directly through its operations and indirectly through the projects it finances, so we aim to minimise the negative and maximise the positive non-financial impacts on the environment and society, while managing Citadele Group's environmental risks and opportunities.
The Citadele Group’s sustainability strategy is structured around UN Sustainable Development Goals (SDGs) framework. We have prioritised five of the SDGs that are linked to business strategy and sustainability work, and which are in the areas where the Citadele Group have the largest opportunity to make an impact.
The five Citadele Group’s prioritised goals include:
- Good health and well-being (SDG 3),
- Affordable and clean energy (SDG 7),
- Decent work and economic growth (SDG 8),
- Industries, innovation and infrastructure (SDG 9),
- Climate action (SDG 13).
Further information about the Citadele Group's sustainability strategy is disclosed in the ESG policy (updated in 2024). The Pension Fund supports the Citadele Group's sustainability strategy by contributing to its implementation.
Sustainability Risk Integration into Pension Plans
The Pension Fund believes that ESG factors can influence the value of the Pension Fund’s pension plans in the long term and agrees with the opinion that by integrating ESG aspects into asset management, the return on investments increases or remains neutral at a lower overall risk level. In addition, by integrating ESG aspects into the asset management of pension plans, it contributes to the sustainable development of the world.
ESG risk refers to the potential risk of additional costs or losses arising from not paying due attention to environmental, social and governance factors. These factors can have a significant impact not only on the current situation, but also on the quality of life and opportunities of future generations.
For the identification, assessment and analysis of ESG risks of pension plans, the Pension Fund selects such a manager of funds that can ensure sustainable management of pension plans. The Pension Fund has entrusted the management of assets of the pension plans, including ESG risk management, implementation of the engagement policy and the exercise of voting rights to the pension plans’ asset manager JSC "CBL Asset Management" (hereinafter - the Asset Manager). The Pension Fund and the Asset Manager constantly monitor changes in the business environment and regulatory enactments regulating the field in order to provide up-to-date information to stakeholders.
The Pension Fund has appointed a board member responsible for ESG risk management in the company. The pension fund's responsible board member for ESG risk management is actively involved in Citadele Group working groups related to sustainable initiatives, engaging in the formation and implementation of strategic guidelines. This provides the Pension Fund with an opportunity to engage in an action plan for the achievement of the set objectives at the entity level.
Sustainability factor management is included in the functions of the various Citadele Group structural units, which are shown in the following table:
The Asset Manager ensures ESG risk management and engagement measures on the basis of the Private Pension Funds Law, the investment policies of the pension plans established by the Pension Fund and the Sustainability and Engagement Policy of the Asset Manager – available here (February 2025, version 6.0). In addition, the Asset Manager each year discloses how he has exercised his voting rights by setting out the explanation of the most important votes in the Report on the implementation of the engagement policy – available here (version 1.0 2024).
The Asset Manager is a signatory to the United Nations Principles for Responsible Investment, improving governance processes and including an assessment of ESG factors in the investment process.
The Asset Manager's "Sustainability and Engagement Policy" and details of the integration of ESG factors into the Asset Manager's investment management process, including principal adverse impacts (within the meaning of Regulation (EU) 2019/2088) mitigation, methods used, sources of information and data, limits, if any, and monitoring of compliance, available here.
The Asset Manager has carried out an internal risk materiality assessment and concluded that there are risks that are not related to sustainability but are relatively more relevant to pension plans. However, the Asset Manager manages ESG-related factors using negative screening or exclusion and positive screening or best selection, depending on the methodology developed for the particular investment product.
It should be noted that the application and integration of ESG criteria involves a risk of greenwashing. Greenwashing is creation of a false impression or provision of misleading information that causes or may cause an investor to believe that the relevant investment products are environmentally friendly or have a greater positive impact on the environment than they actually have. To avoid the risk of greenwashing, Pension Fund and the Asset Manager strictly adhere to legal and regulatory requirements related to the management of this risk, as well as Citadele Group risk management standards and policies.
No consideration of adverse impacts of investment decisions on sustainability factors
The Pension Fund and the Asset Manager regularly monitor ongoing changes in market practices, regulation and availability of data in order to systematically assess whether it is possible to consider the principal adverse impacts of investment decisions on climate and other environmental issues, as well as social and labour issues, respect for human rights, anti-corruption and anti-bribery aspects.
However, there is still a lack of high-quality, timely and systematic data on these issues, as well as limited resources to fully assess the principal adverse impact on sustainability factors, therefore the Asset Manager cannot comprehensively assess the principal adverse impact of investment decisions on sustainability factors at the entity level. This position is regularly reviewed and will be changed as soon as its meaningful and practical implementation is possible.
Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector (SFDR) is an EU-wide regulation aimed at increasing transparency regarding the environmental and social impact of financial products. The SFDR requires insurance undertakings to classify each of their financial products as a product of Articles 6, 8 or 9 of the SFDR and to disclose certain information in accordance with this indication in order to provide greater transparency to members before investing. SFDR classification means:
- Article 6 SFDR financial product – a pension plan with no sustainable investment objective and no obligation for investments in assets with environmental and/or social benefit, i.e. a pension plan that does not qualify as an Article 8 or Article 9 SFDR pension plan.
- Article 8 SFDR financial product – a pension plan that promotes investments with a beneficial/positive impact on environmental and/or social performance. Such promotion may contain exclusion of certain environmentally and socially harmful economic activities or consideration of relevant ESG rating when making investment decisions.
- Article 8 SFDR financial product – a pension plan, the purpose of which is sustainable investments that contribute to achievement of environmental and/or social goals.
The 3rd pension pillar plans offered by the Pension Fund comply with Article 6 of the SFDR. In order to comply with the applicable regulatory requirements, the Asset Manager has prepared a description of the integration of ESG risks into decision-making. Precontractual disclosure of sustainability information on investments in pension plans is available here (December 2023, version 1.0).
The investments underlying the pension plans offered by the Pension Fund do not consider the EU criteria for environmentally sustainable economic activities.
Information updated: May 16, 2025.