Stockholm (NordSIP) – Storebrand Asset Management, the Norwegian financial services company with over NOK600bn in AUM, has launched Storebrand Global ESG, a global equity fund which aims to achieve long-term capital growth by focusing on companies that maintain strong environmental, social and corporate governance credentials, the asset manager reported. The fund was incepted September 13, 2017.
Storebrand AM, the second largest asset manager in Norway after the country’s Sovereign Wealth Fund, is a public company listed on the Oslo Stock Exchange, whose main activities are related to pension savings and life insurance, with major divisions also working on investments, banking and insurance products. It acquired Sweden’s SPP, another sustainability trailblazer, from Handelsbanken in 2007, gaining a sizeable division dedicated to the Swedish market for life insurance. Storebrand/SPP was named the world’s most sustainable insurance group early this year, ranking second of 4973 companies on the Corporate Knights Global 100 unveiled in Davos.
The new Storebrand Global ESG fund, managed by Henrik Wold Nilsen, is an index-based global equity fund with UCITS status that invests widely in various industries in developed markets, and is intended for investors wishing for a broad global sustainable fund following the MSCI World NTR benchmark at a reasonable cost. “We invest more in companies that score high in our sustainability rating, and less in companies that get lower scores, giving the fund a significantly higher sustainability rating than other index funds without changing expected return and risk significantly,” said Jan Erik Saugestad, CEO of Storebrand Asset Management.
Storebrand Global ESG, which has a management fee of just 0.4%, invests in about 700 of the approximately 1600 companies in the MSCI world index. With the expected tracking error at 0.5%, the fund’s return is expected to be within 0.5% of the benchmark return two thirds of the time, and usually within 1% of the benchmark return 95% of the time, Mr Saugestad said. The selection of companies is optimised based on Storebrand’s own model for sustainability assessment. Companies are graded based on how well the company is positioned for global trends, sustainable operations and financial stability.
“The fund managers identify companies that act financially as the excluded companies but have a higher sustainability rating,” Mr Saugestad explains. “This is why we say the fund is index near and why it’s an attractive alternative for customers searching for a broad global sustainable fund, at a reasonable cost.”
Storebrand has a standard for sustainable investments, which excludes over 180 companies from the Group’s investment universe based on violations against human rights, workers’ rights, corruption, serious climate and environmental damage, controversial weapons, tobacco and companies scoring low on sustainability. It also issues an annual report for companies engaging in socially responsible investments. Exclusion does not suffice, though, which is why Storebrand Asset Management chooses “to invest more in companies with an attractive ESG profile positioned to deal with global challenges and that run their business sustainably – a win-win for the environment and for the wallet,” Mr Saugestad suggests.
Not a lot of time for SDG’s
“[15 years] isn’t a lot of time,” Saugestad said over the summer, of the time left to implement the 2030 Sustainable Development Goal agenda. “We have, like the global ambitions, gradually raised our requirements and refined our research model. We are convinced that companies that take the global challenges seriously will be the most profitable long term. To integrate the sustainable development goals in our work and use them as a starting point for the analysis becomes a natural next step, and makes it possible for us to focus our efforts even further and become better at identifying the winners. Companies that are very slow or refuse to adapt have in our mind a long term risk that should not be ignored.”
Image: (c) Storebrand Press Release, https://www.mynewsdesk.com/no/