11-03-2024 07:30

Making active ownership count

Nordea gets high recognition for how we practise active ownership in a recent independent report where we are compared to peers. 

The Voting Matters report is evaluating how large asset managers are exercising their shareholder voting rights to positively influence environmental and social issues. The organisation behind the annual report is ShareAction, a non-profit organisation working globally to raise the standards for responsible investments.

Cecilia Fryklöf, Head of Active Ownership.

In their latest report Nordea is ranked number 8 among the 69 largest asset managers in the world.  

“We welcome the report and are proud to be in top 10 and number 1 in the Nordics,” says Cecilia Fryklöf, Head of Active Ownership at Nordea. 

“Nordea believes in active ownership and it’s an important part of delivering on our promise to be a responsible investor. Our customers expect us to invest in companies that manage their ESG risks well and that we act as active owner to ensure the companies align with our expectations when it comes to environmental and social issues.” 

Action on climate change

In environmental matters Nordea expects companies to align with the goals of the Paris Agreement since unmanaged transitions and physical risks might impact shareholder value across sectors. As a member of The Net Zero Asset Managers initiative and Climate Action 100+ Nordea also supports initiatives that drive positive action on climate change.

Katarina Hammar, Head of Corporate Governance.

At Nordea the actual voting is performed by our corporate governance team. Spring is normally the time when most AGMs take place and provide an opportunity to make our voice heard. It is a busy period, but it’s not only about the number of shareholder proposals we support, explains Katarina Hammar, Head of Corporate Governance:     

“It’s important to remember that our success is measured by how we contribute to shareholder value and not by the number of proposals supported. We assess all proposals on a case-by-case basis. The content of the proposals is key and we will support the proposals that we believe are in the best interest of our unitholders.”

Voting a tool in driving change

Voting at annual general meetings (AGMs) can be used by shareholders as a method to practise active ownership. Active ownership is when shareholders engage in a company they have invested in to influence the company’s strategy and actions. Being an active owner is a part of Nordea’s responsible investment strategy and how we work with environmental, social and governance (ESG) risks. On a yearly basis, we’re voting at around 4,000 AGMs. 

In Nordea’s Voting Portal you can see how we’re voting across regions, sectors and companies. Our votes are published within 24 hours so everyone can follow how we vote and act.

Joining forces

To make an impact Nordea also often joins forces with other asset managers, like in the Oil and Gas Methane Partnership 2.0 (OGMP 2.0), which we ask companies to join to reduce and improve their handling of methane emissions.

One of the companies that Nordea has been in close dialogue with is Coterra Energy. Nordea recently met with the company in Texas and Coterra Energy has now decided to join the partnership. At their latest AGM Nordea voted for a proposal on making a public report on how the company measures their emissions, so often we try to influence companies both through dialogue and voting.

A similar case is the one of TotalEnergies. A company that we engage with indirectly via the Climate Action 100+ initiative, which they have also decided to join, and directly at their AGM where we voted for a proposal on alignment of their targets for indirect scope 3 emissions with the Paris Agreement.

Complying with international labour rights

When it comes to social matters, Nordea expects companies to comply with international norms and principles. We engage in and support social shareholder resolutions on for example freedom of association (ILO principles). Companies that breach international norms and principles risk losing their licence to operate, which could have a negative impact on shareholder value.

As a shareholder in Amazon we have for example voted for commissioning a third-party assessment of the company’s commitment to freedom of association and collective bargaining. 

“Engagement with the companies and industries where we are invested is a backbone of our responsible investment strategy. Besides our voting activity, our team of ESG analysts conducts around 1,000 company dialogues a year to discuss topics such as climate change, biodiversity, human rights and good governance. To us active ownership is a powerful way to protect shareholder value, enhance long-term returns and foster positive change in society,” concludes Cecilia Fryklöf.

What does the Voting Matters report cover?

  • The report analyses the voting performance of 69 of the world’s largest asset managers. 
     
  • Asset managers are selected based on their assets under management with a regional focus on the geographies of ShareAction, which are Europe and the UK. 
     
  • Asset managers were ranked and analysed based on their voting across 257 environmental and social-related shareholder resolutions.
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