Zooming in on specific themes
To monitor our exposure to specific themes or sectors defined by material ESG risks, we look at our top holdings on an annual basis.
More specifically, we select a few key themes in which we see opportunities to further understand how material risks related to these sectors or themes are proactively managed by companies with the goal of influencing corporate practices.
We have four focus areas for our stewardship and active ownership activities within ESG – climate change, water, human rights and corruption. In 2015, we engaged with a number of companies in all four focus areas.
Focus area: climate change
The Nordea group signed the Montreal Carbon Pledge launched on 25 September 2014. By signing this pledge we commit to measuring and publicly disclosing the carbon footprint of our investment portfolios on an annual basis. In December 2015, we disclosed the carbon footprint as part of the ESG scorecards for our Stars Funds.
We also signed the Paris Pledge, which was launched at the United Nations Climate Change Conference (COP21) in December 2015 in which Nordea Asset Management participated.
In March 2015, Nordea Asset Management decided to exclude 28 companies with 75% of their revenue derived from sales of coal products and without a meaningful opportunity to diversify from coal. Please find our exclusion list here.
Stewardship and engagement activities
In May 2015, we were among the 120 investors that sent a letter to the finance ministers of the Group of Seven (G-7) urging them to support a long-term global emissions reduction goal in the COP21 Paris agreement as well as the submission of short to medium-term national emissions pledges and national action plans.
In 2015, we joined a collaborative investor engagement on Climate Lobbying with more than 60 investors coordinated by the PRI (Principles for Responsible Investment). As part of the initiative, The Investor Expectations on Corporate Climate Lobbying statement was prepared. The ‘Expectations document’ states that company lobbying on climate change related policy and regulation must be in line with the universally accepted goal of limiting global temperature rises to 2°C.
Nordea also joined the Institutional Investors Group on Climate Change (IIGCC) parallel investor initiative on corporate lobbying in a EU climate and energy policy context. A letter signed by 50 investors from eight countries representing over EUR 4.4 trillion in assets under management was sent to 75 companies.
We are also a member of the CDP (Carbon Disclosure Project), which aims at encouraging companies to measure and disclose climate change, water and forest-risk data. This information is used in our ESG analysis and investment decision-making.
Focus area: water
Water-related risks and opportunities are becoming increasingly important for our investments. In 2015, we participated in an industry engagement initiative on waste water management by pharmaceutical companies in their supply chains in India that involved 28 companies.
We also joined the CDP’s Water Advisory Council and co-chaired the United Nations Environment Programme Finance Initiative’s (UNEP FI) Water and Finance Work Stream (WFWS) in Tokyo.
Focus area: human rights
We expect companies to observe internationally recognised human rights principles and to prevent negative effects and manage their impact on human rights.
As part of this focus area, we joined a collaborative engagement coordinated by the PRI (Principles of Responsible Investment) on human rights in the extractive sector.
We also joined the Access to Medicine Index during 2015. The Index publicly recognises companies for their investments in access to medicine.
Focus area: corruption
During 2015, we initiated an engagement project on corruption management involving 20 companies among our largest holdings.
The aim is to promote a proactive approach to corruption, implementation of adequate anti-corruption measures and improved transparency. We will continue to follow up on this in 2016 and onwards.
Thematic research reports
Our thematic research reports, which can be found on this page, include:
- Managing community risk
- Water risks for Swedish businesses
- Responsible corporate tax practices
- Clinical trials outside Europe