Danske Appoints New Head of Active Ownership

    Stockholm (NordSIP) – At the start of January, Oshni Arachchi was appointed Head of Active Ownership at Danske Bank. Arachchi joined Danske bank in June 2021 as Head of Sustainability Data, Screening and Processes and Head of Responsible Investment for Sweden. Arachchi will continue to serve as Head of Responsible Investment for Sweden and will report to Erik Eliasson.

    “As Danske Bank’s new Head of Active Ownership I am responsible for leading Danske Bank’s active ownership efforts and engagement activities. Active Ownership is becoming a more important part of our responsible investment strategy to both protect the value and address the principal adverse impacts of our investments. This effectively involves helping investee companies to address sustainability-related issues and improve their management or performance of them, through various tools and strategies. Whether it be devising proxy-voting strategies, reaching out to investee companies to monitor their progress on their commitments or where necessary, applying exclusions as a means to ensure accountability,” Arachchi tells NordSIP.

    Prior to joining Danske Bank she was an ESG Corporate Analyst at Folksam between August 2020 and May 2021 following a five year stay at ISS and ISS ESG which culminated in a role as Associate Director, Head of Controversies, Global Norms Research and Engagement at ISS ESG. Throughout this time, Arachchi has been involved in various engagement initiatives aimed at addressing corporate management of sustainability-related matters, including last year’s joint letter by Folksam and Öhman calling on Amazon to take concrete measures to stop interfering with its workers’ unionisation efforts.

    “I am excited about the opportunity to continue the great work that has gone into establishing our strong foundation. An example of this relates to how we have strengthened our voting infrastructure over the last two years, which in turn has allowed us in 2021 to exercise our voting rights on more than 39,955 voting proposals, at 3,863 company meetings across 67 countries” Arachchi says.

    “Looking ahead, in the short-term, our focus will be on continuing on this work. One specific area that we will focus on is the implementation of the net zero agenda through a strong stewardship and engagement strategy, in conjunction with developing our processes for top-down engagements” Arachchi adds.

    “To say that I look forward to contributing, with my own experience, to this work and to how we exemplify our responsibility, as an Active Owner, on issues of collective importance, is an understatement” Arachchi concludes.

    Danske Sets 2030 Emissions Target for Loan Portfolio

    At the beginning of February, Danske Bank also announced concrete CO2 reduction targets for selected sectors towards 2030 in relation to lending, with the aim of achieving a net-zero loan portfolio by 2050 or sooner.

    The interim 2030 targets are set against a 2020 baseline and cover the three sectors in Danske Bank’s lending book that contribute to the highest CO2 emissions. For oil and gas production, the target is a 50% reduction in lending exposure, whereas the target for shipping is a 20-30% reduction in emissions per unit transported. For utilities companies, a target of a 30% reduction in carbon emissions per kWh of power and heat generation has been set.

    “We have more than 3.3 million customers, and we cover the majority of sectors – including sectors that have a significant carbon footprint. This is why we are a part of the solution needed to address the climate challenges that we face. For the most part, our customers are doing a lot of work related to the green transition. But we also recognise that we have an obligation – as a leading Nordic bank, and with the resources we have at our disposal – to support our customers and contribute to the green transition in the societies that we are a part of, as well as to support Denmark in reaching its 2030 target for reduction in CO2 emissions,” explains Carsten Egeriis, Chief Executive Officer at Danske Bank.

    “It is our ambition to help all customers – who can and who want to. And we are experiencing a high level of demand from our customers for advisory services and products that support the customers’ own green transitions. As an investor and lender, the question for us is not so much one of supporting the businesses that are the greenest today but of supporting the businesses that have the greatest potential to be green in the future. So our aim is first and foremost to support customers in succeeding with their own green transitions. This might mean that our journey will take a little longer. But ultimately the difference we make for our customers and for society will be much bigger,” Egeriis continues.

    Danske Bank’s Other Targets

    The targets apply to the CO2 emissions of customers in specific sectors – emissions that Danske Bank plays a part in by providing loans to the customers.

    In July 2021, announced it was increasing its sustainable financing target from DKK100 billion to DKK300 billion. This increased goal was facilitated by the bank’s ability to increase its sustainable funding from DKK102 billion to DKK192 billion in 2021.

    Danske Bank also increased the goal for Danica Pension’s investments in the green transition by 2023 from DKK 30 billion to DKK 50 billion. Throughout 2021, investments in the green transition increased from DKK27 billion to DKK33.5 billion.

    Filipe Albuquerque
    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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