Scoring with SEB Investment Management

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    Barcelona (NordSIP) – The Nordics didn’t grab any of the prestigious PRI Awards this year. Nevertheless, NordSIP is sufficiently impressed by the fact that two Nordic PRI signatories made it to the nominees’ shortlists despite tough competition. In a couple of articles, we are featuring their achievements and ongoing sustainability efforts.

    One of the nominees, shortlisted in the category ‘ESG Incorporation Initiative of the Year’, is SEB Investment Management. We catch up with Elisabet Jamal Bergström, Head of Sustainability at SEB Investment Management, during a break between sessions at the PRI in Person conference in Barcelona. For a few minutes in the sun, she explains why she believes the PRI deems noteworthy the way she and her colleagues work with sustainability integration.

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    Meet the SIMS-S

    Complaining about the transparency of traditional ESG ratings and the vast discrepancy between the scores of various providers is quite common these days. Jamal Bergström tends to agree with the critics. That is also why SEB Investment Management chose to develop its own sustainability rating system, combining raw data from several sources to inform the portfolio managers’ decisions.

    This proprietary tool, which is the very ground for the PRI nomination, is called SEB Investment Management Sustainability Score (SIMS-S). With its help, fund managers can analyse companies and assign a sustainability rating to them. The assessment takes several different factors into consideration, such as gender equality, taxonomy-related revenues, and SDG contributions, and all these, taken together, form the basis for the rating. A company can receive a score of between 0 and 10, which is adjusted for the region and sector the company is active in.

    “SIMS-S is a very important tool in our daily operations, and clearly, we are honoured, happy and enthusiastic about our nomination in the PRI Awards,” says Jamal Bergström. According to her, the model differs from most other ESG tools as it emphasises to a higher degree both opportunities and risks in sustainability and integrates artificial intelligence to measure sentiment. “SIMS-S is a versatile tool that we can use both to screen out companies that do not meet our sustainability standards and to overweight the companies that are best at managing their sustainability risks or where we see great opportunities coupled to sustainable development,” she adds.

    Focus on the ‘S’

    A product that clearly demonstrates the advantages of SIMS-S, according to Jamal Bergström, is the thematic fund SEB Global Equal Opportunity Fund. The strategy is designed to invest in companies that are at the forefront of gender equality and inclusion. “We can offer such a focused strategy precisely because SIMS-S allows us to isolate and emphasise specific sustainability factors. In this case, gender diversity,” she comments.

    The numbers support the fund’s diversity and inclusion claims. For instance, the proportion of the fund invested in companies where at least one third is women on their board and management teams is more than 80 per cent, compared to around half of the benchmark index, MSCI World Net Return. “The reason for choosing a third as our threshold value is that it is the share required to be able to reap the benefits of diversity, according to experts in the field,” explains Jamal Bergström.

    Striving to increase the share of the fund investing in companies that are transparent with their gender pay gap is another way to promote the equal opportunity theme. “Only a small share of Swedish and European companies report and are transparent with this information,” says Jamal Bergström. “The potential for improvement is huge.”

    Preaching to the choir

    As to her impressions from the PRI in Person conference, SEB Investment Management’s head of sustainability seems to have mixed feelings. Although she finds many of the sessions and seminars quite inspiring and enjoys both the international perspective that the conference brings and the great networking opportunities, she confesses that, mostly, it has been ‘preaching to the choir’. “I lack some critical voices,” adds Jamal Bergström as we head back into the conference hall.

    Image courtesy of NordSIP
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