Stockholm (NordSIP) – On Earth Day 2021 Nordea launched its first green bond fund, the Nordea 1 – Global Green Bond fund. The green bond fund is actively managed by Anton Nykvist and Sascha Stallberg with a global focus and tracks the Bloomberg Barclays MSCI Global Green Bond Index.
The fund applies norms-based as well as sectoral exclusions, including excluding companies with over 5% revenues from military equipment, alcohol, tobacco, gambling and pornography. It follows Nordea Asset Management’s fossil fuel policy of ensuring compliance with the Paris Agreement for all investments in fossil fuel companies. “Companies with a transition strategy that is aligned with the 2°C target are put on a whitelist called the Paris-Aligned Fossil Fuel List, or sometimes the Nordea Fossil Fuel Transition List. Companies not on that list will be excluded,” the policy explains. Investments are also subject to a minimum ESG rating requirement.
“Any off-benchmark non-green bond needs to have at least a neutral contribution to the UN SDGs and fulfil minimum ESG rating requirements. Currently the off-benchmark exposure consists mainly of emerging markets corporate bonds (the green bond market is still of modest size in the emerging markets),” Thede Rüst, Head of Emerging Markets Debt Nordea Asset Management tells NordSIP.
The new strategy follows the ICMA Green Bond Principles. Despite its name, the fund can also invest in social and sustainability-linked bonds. Nevertheless, at least 70% of fund’s assets have to be invested in dedicated green bonds.
“Generally we expect continued high growth rates going forward – some issuers might look to issue sustainability-linked bonds instead of green bonds,” Thede Rüst, Head of Emerging Markets Debt Nordea Asset Management tells NordSIP.
Image courtesy of Nordea AM
