Domestic investments – ESG assessment
LSR’s sustainability assessment provides insight into environmental, social, and governance factors within the fund’s investments, supporting informed decision-making with long-term returns and responsible risk management as guiding principles. LSR analyses the sustainability factors of the financial instruments in which it invests by requesting information from counterparties, including through due diligence processes and data analysis. ESG assessments from third parties are also used. These third-party ESG assessments are based on both publicly available information and meetings with company representatives.
LSR considers it important to engage in constructive dialogue with the companies it invests in, with the aim of promoting positive developments in sustainability. The sustainability status of the financial instruments in which the fund has invested is regularly reviewed, and the development of ESG factors is monitored.
Domestic listed portfolio - Ratings
The ESG scores of companies in LSR’s domestic portfolio are based on ESG assessments from Reitun hf., which evaluates companies using both publicly available information and meetings with company representatives. Companies receive scores for environmental, social, and governance factors on a scale from 0 to 100, where 100 is the highest score.
Rating scale
Companies in the portfolio are assigned a rating from A1 to D, where A1 is the highest possible rating and D the lowest.
A1-A3
Outstanding
B1-B3
Good
C1-C3
Average
D
Poor
| ESG Rating | Lower limit | Upper limit |
|
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 ESG scores
A summary of the ratings in LSR’s domestic portfolio shows that the portfolio’s overall score is 80 out of a possible 100. The weighting of environmental, social, and governance factors varies across individual underlying companies. The table below shows the breakdown of the overall score into environmental, social, and governance factors.
80/100
Environmental factors
81/100
Social factors
78/100
Governance factors
80/100
Total
0
High risk
80
100
Low risk