Nordea Asset Management
Nordea Asset Management’s (NAM’s) commitment to Responsible Investment (RI) is not new, and it’s deeply rooted in our Nordic corporate culture, philosophy and business model: it’s in our DNA in other words. We consider it our fiduciary duty to care about all factors that are material to clients’ investments, including those that are non-financial.
Since becoming an early signatory of the UN Principles for Responsible Investment in 2007, we have been active supporters of and contributors to several Nordic, European and global ESG-related initiatives (Carbon Disclosure Project, Carbon Action, Sustainable Investment Forums, Water Disclosure Project etc.). In November 2018 we were one of the co-founders of the UN Principles for Responsible Banking as well.
NAM’s RI framework extends to specific strategies and products, using a wide combination of RI approaches. Our STARS strategies, for instance, stand at the forefront of our RI offering, presenting a unique approach to generating attractive returns while adhering to advanced RI standards. Since the launch of our first STARS equity strategy in 2011, we have built a strong suite of ESG equity solutions that cover Emerging, Global, European, Nordic and North American markets.
In order to have these cutting-edge solutions, Nordea has developed over many years a large and experienced RI team, which works with our investment teams to integrate ESG throughout the investment process.
Besides the STARS family, our Global Climate & Environment strategy is a sustainability themed portfolio that concentrates on resource efficiency and environmental protection, investing in companies that address climate change.
Active ownership is a central component of our corporate-wide overlays. Being an active owner is of paramount importance to NAM. We believe this is a powerful way to protect shareholder value, enhance long-term returns and foster positive change. We do this by exercising our formal voting rights as well as engaging with companies and encouraging them to improve their management systems and ESG performance.
Our active ownership efforts begin with voting on our holdings, attending Annual General Meetings (AGMs) and representation on nomination committees.
We strive to vote for all funds (except Nordea 1- European Value Fund, managed by an external boutique that has its own mandate to vote on its holdings), particularly for holdings in the RI-enhanced products such as the STARS funds. This includes both internally and externally managed funds. However, we do not vote on segregated mandates as those assets are not owned by the fund companies. We vote in about 400 companies (which typically represents around 60% of equity AUM) and we are striving to extend our coverage outside Europe.
Proxy voting is performed by two vendors to facilitate the voting, but the final decision always remains with Nordea. Our publicly available Voting Portal shows how we have voted in AGMs for stocks held across our funds. Access to the Voting Portal can be found here.
Award Winning RI Team
Formed in 2009, Nordea‘s RI Team is one of the largest and most experienced teams in Europe. Over the years, the team has received awards from several external entities such as Extel and the European magazine “Capital Finance International” (CFI). CFI awarded Nordea Asset Management “Best ESG Investment Process in Europe” for five consecutive years (2014 – 2018).
The RI analysts, who sit close to their respective portfolio management teams in Stockholm and Copenhagen, have both a broad coverage and a particular focus on STARS fund holdings.
A successful example of engagement
We influence and foster change with our companies by engaging in dialogues around specific ESG topics. Over the years, we have actively and successfully engaged with companies all over the world to ensure they meet our ESG criteria. One such company is Swedish fashion retailer H&M (Hennes & Mauritz AB). H&M works with many of its suppliers in emerging markets to improve labour conditions. Nevertheless, some of the challenges facing these suppliers have caught our team’s attention. On a site visit to Cambodia, Nordea inspected a supplier’s factory that had been flagged after an incident where workers fainted due to extreme heat in the building. Our team spotted several issues such as poor ventilation and lack of access to drinking water. As a result of the visit, a number of immediate action points were made to improve the working conditions. These included better air condition and more drinking stations. However, the engagement work does not stop there. Follow-up meetings are scheduled on an ongoing basis with H&M to ensure that they maintain their focus on improving working conditions in their supply chain.
To learn more about further engagement cases please refer to the Quarterly ESG reporting for STARS Funds
Transparency and Reporting
For an investor, timely and adequate information is key. We expect companies to report on materiality; i.e. aspects that reflect a company’s significant economic, environmental and social impacts and value and which can substantially influence the analysis and decisions of investors and other stakeholders.
We support standardized and integrated reporting which incorporates material sustainability information with financial information.
We strive to be transparent in regards to how we work and incorporate ESG in our responsible investment decisions and activities. We regularly report via our website, through our Annual Report and through the PRI reporting framework. Please find below an overview of our regular reporting:
Breakdown of total managed assets
- 2,2% Best in class
- 100% Exclusions
- 2,2% ESG integration
- 100% Normative screening
- 100% Engagement and voting
- 0% Impact investing
- 0,7% Sustainability themed
(data as of 30.09.2018)
Breakdown of ESG-aligned assets
- 100% Equity
- % Fixed income
- % Alternatives
- % Multi asset
- % Impact
(data as of 30.09.2018)