Stockholm (NordSIP) – Nykredit Invest Bæredygtige Aktier (NI Sustainable Shares) has become the first Danish investment fund to receive the Nordic Swan Ecolabel green environmental certification.
The fund has successfully met the 25 criteria set by the “Swan label” relating to the environment, social conditions and human rights, including exclusions, transparency and sustainable business impact, and supports the companies it invests in to reach the same targets.
“Since its inception that fund has been conceptualised as a product matching the needs of professional investors while remaining an accessible product offering the latest and most professional ways to invest for private savers,” said Nykredit Invest Head of Responsible Investments Søren Larsen.
Among the requirements to receive the Swan label is that a fund may not invest in companies that extract, refine or produce energy from coal, oil, gas and uranium. In addition to traditional financial analyses, same companies are also required to undertake a sustainability analysis. The fund must be transparent about which companies it invests in, and the portfolio manager is required to publish a sustainability report on the fund at least once annually.
“We believe the requirements for analysis, reporting and follow-up will contribute to an increased focus on sustainability, both at the fund manager and company level,” said Per Sandell, product manager for investment funds at Nordic Ecolabelling.
Nykredit Invest chooses companies by specifically evaluating their behaviour compared to their closest competitors. “It could be a transport company that has newer machines, trucks or ships that are more sustainable,” Larsen said. “One thing is what they have right now, and another is what their plans are going forward.”
All Nykredit’s investment products comply with UN PRI recommendations. This means, for example, that investments are screened for violations of international law, such as human rights. “If there is a problem we try to get the company to solve it,” Larsen says. “If that does not happen, it will be excluded from all our funds. In addition, the companies themselves assess sustainability, forming the basis for a risk assessment by the funds. More and more of our funds use these assessments in the selection process.”
“Some of our customers demand even more, and it is for them that we launched Nykredit Invest Bæræedygtige Aktier, which has now received this certification,” he added.
One of the incentives for Nordic Ecolabeling’s certificates for investment funds is to provide encouragement and support for companies that may not yet have met all the sustainability criteria targets but are in the process of working towards them.
“The green frontrunners are important, but it is also important to achieve breadth and width in green conversion. It has therefore been important for us to include companies that currently have greater ambitions than results, but which a Swan-labelled fund can influence to move in the right direction. There must be a high level of transparency and active ownership, Sandell said.
“The reality is that everyone has strengths and weaknesses,” Larsen added. “We are aware of this and want to push them in the right direction.” To that end, Nykredit Invest also participates in general meetings, having cast votes at over 650 company general meetings in 2018.
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