DNB Asset Management is among the leading asset managers in the Nordic region counted. Our employees, around 150 employees by end of 2019, are located across offices in Norway, Luxembourg and Sweden.
DNB Asset Management manages more than USD 76bn* in investment strategies including discretionary mandates within Nordic and global asset classes, both long-only equities, long/short equities, investment grade and high yield corporate bonds, multi-assets, multi-manager portfolios and alternative investments.
DNB Asset Management’s product focus is centered towards producing world class UCITS funds to be marketed across selected markets in Europe. Our The funds are managed out of Norway (DNB Asset Management AS) and Luxembourg (DNB Asset Management S.A.). The company also manages AIFs within private equities (multi-manager portfolios). In cases where a client requires a tailored investment strategy, the firmwe may also offer such investment services if deemed within the scope of the company’sits investment expertise.
*PRI Report 2020
FACTS & FIGURES
|Inception of sustainability strategy||2006|
|Total AUM (USD)||76.7 billion*|
|AUM SRI Strategies (NOK)||678 billion|
|% ESG integrated||100|
|SRI/ESG Team||5 experts|
*PRI Report 2020
MEMBER / SIGNATORY
|UN Global Compact||✓|
|International Norm Violations||✓||✓|
|Anti-personnel mines & cluster munitions||✓||✓||Weapons of mass destruction||✓||✓|
Source: Responsible Investments Report
As a responsible investor with a long-term view, DNB Asset Management aims to provide high, long-term returns, at an acceptable level of risk, whilst considering Environmental, Social and Governance (ESG) factors.
The DNB Group’s Standard for Responsible Investments ensure that DNB does not contribute to human or labour rights violations, corruption, serious environmental harm, and other actions which may be perceived to be unethical and/or unsustainable. It shall further ensure that assessments of ESG risks and opportunities are integrated into investment decision-making.
SRI Awards & Recognitions
- DNB Funds – received Best Equity House Sweden from Morningstar Fund Awards.
- DNB Grönt Norden – received Nordic Fund of the year 2019.
- DNB Teknologi – received Lipper Fund Awards 2018 for Best fund over 10 years and Best fund over 3 years.
INTEGRATION & INTERNAL RESOURCES
ESG data is incorporated into the portfolio management system and is available to all of the investment professionals. The portfolio managers use this data in their company risk assessments, financial modelling, investment decision-making and portfolio construction.
To comply with the ever-more stringent regulatory requirements for reporting on climate issues and sustainability, it has continued the work to identify and measure climate-related risks and opportunities at Group and portfolio level. In line with the recommendations from the Task Force on Climate-Related Financial Disclosures (TCFD), it uses scenario analyses for identifying possible outcomes for climate-related risk and opportunity factors, at Group and portfolio level.
In addition to calculating the carbon footprint of an increased number of fixed-income funds in 2020, DNB carried out a thorough analysis of one of its mutual fund investments to look into which emissions could potentially have been avoided by the companies included in the fund. As follow-up of its participation in Phase I of the TCFD pilot project for investors under the auspices of UNEP FI (United Nations Environment Programme Finance Initiative), which started in 2018, it will participate in Phase II in 2021. In Phase I, it took part in the development of a method for measuring the financial impact of various climate scenario analyses of companies and portfolios, along with 19 international investors and the consulting company Carbon Delta. In Phase II, it will help develop a framework for assessing sector-specific climate risks and opportunities, finding best practices for climate reporting and assessing available methods together with other international asset managers, capital owners and climate experts. Assessing significant ESG factors is an important element in making good investment decisions. It has therefore continued the work to further integrate ESG factors into the information and portfolio systems and investment decisions in a systematic manner. Traditionally, the integration of ESG factors has come further for equities than it has for fixed-income securities, and as a result, ESG data for fixed-income securities has been less accessible and of poorer quality.
Sustainability is essentially about long-term value creation, but as a concept it can be perceived as general and a little vague, especially in the absence of common definitions. It is also difficult to compare companies' actual results, and to assess to what extent a company is actually working effectively in the area of sustainability. In order to be as concrete as possible about what DNB means by sustainability, it has used methodology from the reporting frameworks of the IIRC (International Integrated Reporting Council), the GRI (Global Reporting Initiative) and the SASB (Sustainability Accounting Standards Board) as the basis when defining and delimiting the work in this area. All three frameworks are based on the principle that a company conducts a materiality analysis. The purpose of this analysis is to identify which sustainability topics are important for enabling the company to create long-term value, and which topics the company's stakeholders are interested in. The topics included in the analysis can be classified as relating to either environmental, social or governance factors (also known as ESG factors).
ESG data is incorporated into DNB AM’s portfolio management and information systems and is available to all of its investment professionals. Portfolio managers use this data in their company risk assessments, financial modelling, and investment decision making. The availability of this data in the front office system also often acts a flag for the portfolio managers, triggering further investigation and discussion with the DNB AM responsible investment team regarding potential risks and opportunities and the financial effect from this. These discussions may trigger actions such as further investigation, engagement in dialogue with the company, or impact on the investment decision. DNB also has a database where ratings and company meeting information is shared between the PMs and RI Analysts, and it undertakes frequent informal discussion between the RI team and PMs on ESG issues. This process is assisted by the RI team’s portfolio management experience.
DNB AM's External Resources As part of the DNB AM responsible investment approach, it utilises external ESG research and data providers as inputs to its company assessments.
- MSCI ESG Research for ESG reports, scores, data, business involvement screening research, carbon metrics and controversies, climate value at risk, SDG alignment amongst other data points
- Sustainalytics for norms-based screening and engagement services
- ISS for proxy voting based on DNB AM’s own guidelines
- Sell-side research
- Industry reports
- Non-Governmental Organisation (NGO) reports and meetings
- CDP for data on climate, water and forestry
Follow Up & Measurements
DNB AM will follow up with proactive engagement focusing on surveillance and tracing in high-risk countries such as China, Russia, and Saudi Arabia. Often the focus is on these risks within the supply chain.
Source: PRI Report 2020
Committees & Teams
DNB AM’s RI team has competency within broad ESG, finance, climate change, international relations, human rights, the environment, and has over 40 years of portfolio management experience. DNB AM believes a broad background combined with portfolio management experience and working closely with the portfolio management teams are important to succeed with proper ESG integration. Its work is backed by external providers, consultants and collaboration with other investors and the portfolio managers.
ACTIVE OWNERSHIP, ENGAGEMENT & STEWARDSHIP
DNB Asset Management exercises ownership rights in line with international norms and standards, including the United Nations (UN) Global Compact, the UN Guiding Principles on Business and Human Rights, the G20/Organisation for the Economic Co-operation and Development (OECD) Principles of Corporate Governance, and the OECD Guidelines for Multinational Enterprises.
The engagement team of DNB consists of 5 people.
Proactive / Reactive Engagement
DNB practices active ownership through voting and regular engagement with companies they invest in. Proactive engagements are conducted with the aim of encouraging companies to mitigate ESG risks before they materialise, or to take advantage of ESG opportunities that are not being sufficiently addressed at present.
Reactive engagements take place in cases where companies are reported (both alleged and/or confirmed) to be in breach of DNB's Standard. DNB aims to influence companies to improve their practices, thereby securing long-term shareholder value and mitigating ESG risks in the best interest of our clients, as required as part of fiduciary duty. This is consistent with the concept of double materiality, which speaks to the fact that “issues or information that are material to environmental and social objectives may develop to have financial consequences over time".
Voting will primarily happen by proxy, but they will physically attend shareholder meetings in certain cases. DNB's proxy voting service provider, ISS, facilitates the voting process by providing both standard voting analyses, and analyses based on DNB's voting guidelines. These resources are used to inform voting decision between the RI team and PMs. Reoccurring themes include remuneration, issuance of shares, Board structure, double roles (between the Board, management and Nomination Committee) and capital structure (including authorisations). They are increasingly seeing credible shareholder proposals related to ESG themes, specifically in regards to climate-related disclosure. Other ESG topics include reporting on political lobbying, gender pay disparity and responsible tax practices.