Citadele Bank (Latvia)

First Pension Plan Created in Latvia Which Invests in Industries’ Most Sustainable Businesses

Published on

CBL Asset Management Chairman of the Board Kārlis Purgailis

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.

The new pension plan, “CBL Sustainable Opportunity Investment Plan”, has also been published on the manapensija.lv site, and from this week 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.

The level 2 pension is state-funded for all residents of Latvia; every month, the state puts 6% of a resident’s gross income (income before taxes) in a level 2 pension fund. These pension savings are managed by the pension manager chosen by the individual person, investing the pensions in the capital financial markets to increase them. The level 2 pension supplements savings in addition to the level 1 state-funded old age pension.

About CBL Asset Management

Citadele Bank’s subsidiary, IPAS CBL Asset Management, is one of the leading and most experienced financial asset management companies in the Baltics. It has been managing investment portfolios since 2002. Meanwhile, in 2003, it became one of the first in Latvia to manage level 2 pension savings. CBL Asset Management has the largest team of managers in Latvia, which regularly analyses the financial and capital market and macroeconomic trends, investing pension savings in both large international and local Latvian businesses, as well as in the bonds of various countries.

Recent press releases

All press releases