Norm-based engagements

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Annual screenings enable us to engage in time

Nordea Asset Management screens all companies we invest in on an annual basis in order to identify companies that are confirmed as being involved in repeated or severe violations of international norms on human rights, labour rights, environmental protection and business ethics.

If a company is identified in this screening process, we approach them and initiate a dialogue as part of our active engagement.

A united effort with clear procedures 
In 2014, we updated our process to prioritise engagement in incidents that may have a negative impact on the companies’ core business or reputation.

As part of this, we do screenings of broader factors, such as the companies’ total ESG performance, how they manage the most relevant key issues, and the severity and financial materiality of the incident.

All cases are put forward to the Responsible Investments Committee (RIC), who monitors the process and decides which companies to engage with. Each engagement is supported by an agreed engagement plan that outlines the objectives, milestones, timeframes and engagement activities to be carried out.

An example of engagement

Nordea Asset Management (NAM) has decided to issue a statement on its engagement with Heidelberg Cement’s operations in Israel. NAM has an on-going engagement with Heidelberg Cement since 2013. More specifically the dialogue is geared towards Heidelberg Cement’s wholly owned subsidiary Hanson (Israel) Ltd. The primary issue is Hanson Israel’s operations in relation to the Nahal Raba quarry where the company extracts resources. The quarry is situated in the so called Area C which is run under Israeli administration (Judea and Samaria). The quarry pays royalties for the rock that is extracted. Hanson Israel also operates two concrete plants in Area C, and according to Heidelberg Cement these are located in industrial zones outside the settlements. The operations are criticised by different stakeholders with reference to UN resolutions and international humanitarian law. 

As a result of the above NAM has engaged in a dialogue with Heidelberg Cement for several years. As part of the engagement representatives from our organisation have visited the region twice. During the visits NAM has met with various stakeholders including local NGOs, and has made on-site visits at the quarry specifically (where discussions were held with Palestinian and Israeli workers). NAM also holds regular meeting with the company in order to follow the developments. We find the dialogue with the company constructive and it is our conclusion that they have communicated some important developments recently. By way of example this includes the establishment of HC Palestine which is a Palestinian subsidiary separate from Hansen Israel. NAM has held a meeting with HC Palestine and the progress further strengthens our belief that engagement is the right way forward. 

In December 2016 NAM decided on a new two year engagement plan, where we have specified a couple of goals that the company needs to achieve. The focus is primarily on the quarry in Area C and on the newly established subsidiary HC Palestine. During two year period we will continue our dialogue with the company as well as with other stakeholders. Likewise, we have highlighted towards Heidelberg Cement that stakeholder engagement on their part is of high importance. At the end of the two year engagement NAM will evaluate the engagement towards the goals we have set out and the development for the company.