Stockholm (NordSIP) – SEB Investment Management’s (SEB IM) Board has approved an updated Sustainability Policy, which incorporates new biodiversity-related exclusion criteria and more stringent governance criteria. The policy is effective as of April 1st, but is only expected to be fully implemented across SEB IM’s portfolio by July 1st 2023.
Biodiversity and nature-based solutions have been moving up the agenda for institutional investors. Last December’s COP15 United Nations Biodiversity Conference in Montréal resulted in the adoption of a Global Biodiversity Framework (GBF) that helps support the development of industry standards and better nature-related data flows for investors. SEB IM has sought to reflect this by laying out more detailed and stringent nature-related requirements for its portfolio companies.
SEB IM’s exclusion criteria now include a focus on companies that operate in bio-sensitive areas or whose activities affect threatened species. The remaining companies in higher-risk sectors such as agriculture, forestry and power generation will have to show evidence of their biodiversity loss mitigation efforts. SEB IM will also engage with portfolio companies to encourage full value chain traceability, as well as the development of transparent biodiversity and ecosystem-related strategies, which where possible should adhere to the Taskforce on Nature-related Financial Disclosures (TNFD) framework. It will also expect companies to commit to Science-Based Targets for Nature.
SEB IM’s biodiversity policy also seeks to track the adoption of biodiversity initiatives that address the rights of indigenous peoples and the elimination of the trade in endangered species. It will also evaluate portfolio companies on their externally-audited environmental management systems, palm oil certification and waste management procedures.
Governance standards have also been raised, particularly for sustainability-focused funds. SEB IM will expect executive remuneration to be directly linked with specific targets related to the UN SDGs and the Paris climate agreement. As well as governance, the updated sustainability policy set out SEB IM’s approach with regard to biodiversity, water, human and labour rights, and the climate. For the latter, the company is aiming for the totality of its assets under management to be net-zero in GHG emissions terms by 2040.
