24-08-2021 08:09

“Sustainability is becoming more and more important for US companies”

US companies interest in sustainability have grown significantly during the recent years. The Nordea North American Stars fund invests in US companies that work with sustainability issues, and the portfolio manager Joakim Ahlberg has seen how the interest is increasing.
New York Stock Exchange.

The North American stock market, which includes the US and Canada, has previously had a reputation for being less concerned with sustainability and ESG (environmental, social and governance) compared to Europe and especially the Nordics, but this has changed over the past years.

“Five years ago many companies turned down our invitation to meet and talk about their stance on ESG, but this has changed. We feel that most companies want to discuss ESG with us, and they actually listen to our proposals. Our restrictions mean that we can only invest in companies that work actively with sustainability issues, and now there is a greater understanding of that” says Joakim Ahlberg, responsible portfolio manager of Nordea North American Stars.

He adds that there is still a big difference among companies and the way they work  with ESG and sustainability. Some companies are at the forefront and put great effort into strengthening their ESG profiles while others can hardly be bothered.

“But I see a growing trend in the North American stock market towards increased focus on ESG issues.”

But I see a growing trend in the North American stock market towards increased focus on ESG issues.

Joakim Ahlberg, responsible portfolio manager of Nordea North American Stars.

The financial fundamentals are important

There are few North American funds with strong focus on sustainability.

– There are many funds both in and outside North America, investing in North American stocks, but not that many have a strong focus on ESG. We are also different – we don’t just exclude companies, we also actively select companies.

In practice this means that Joakim Ahlberg and his team select  companies with strong ESG profiles or companies that are working hard to get one.

Joakim Ahlberg and his team get help to analyse companies’ ESG profiles from a dedicated analyst from Nordea Asset Management’s responsible investment (RI) team who only works with investments in Nordea North American Stars. He participates in the morning meeting every day and in every meeting where new investments are discussed. All companies are analysed and rated by the RI team. If a company is to be included in a Stars fund, it must at least be rated B in Nordea's own ESG rating, which ranges from A to C.

Nordea's internal ESG rating used by the RI team:

A rating

A-rated companies are companies which we consider to be mature companies with a strong governance structure and good policies and procedures in place to handle important ESG issues.

B rating

B-rated companies have good management which focuses on ESG issues and is developing the company's governance structure. Important matters have been identified and to some extent handled. The company publishes ESG reports annually.

C rating

C-rated companies are lagging somewhat behind on ESG issues. Management is not committed and the company has not conducted a thorough risk assessment of ESG issues or identified areas to be handled.

Note that a fund’s past performance is no guarantee of future return. The value of fund units may rise or fall due to market movements, and it is not certain that investors will get back the entire amount they invested. Comprehensive information regarding Nordea’s funds is available in the key investor information documents and information brochures for the funds. Key investor information documents, information brochures and full-year and interim reports are available at nordea.se/fondinfo and Nordea branches.

This material is only intended as general product information. It should not be regarded as investment advice or a recommendation to invest, and should not be used as a basis for investment decisions. Investors should always read a fund’s key investor information document and information brochure/prospectus, and contact a Nordea branch prior to investing in a fund.

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