Documentos de Académico
Documentos de Profesional
Documentos de Cultura
investments
About funds, ethics and sustainability
Responsible
investments
About funds, ethics and sustainability
Brasel Publishing
Contents
Foreword
Pia Nilsson, Swedish Investment Fund Association. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
A sustainable approach, whatever the fund type
Josefine Ekros and Pr Lfving, DNB. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
T r e n d s a n d fact s
Managing sustainably and responsibly a natural development of active management
Anette P Andersson, SEB Fonder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Field trips around the world a practical means of exerting influence
Ylva Hannestad, Nordea Fonder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Dialogue and influence a cornerstone
Marianne Nilsson, Swedbank Robur. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Sustainable and responsible investments a background
Henrik Malmsten, Swesif . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Different sustainability concepts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
From niche to mainstream
Sasja Beslik, Nordea Fonder. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
T h e c o mpa n i e s a n d cap i ta l o w n e r s
T h e s av e r s
Savers prioritise ethics highly when choosing fund management companies
sa Drakenberg, Swedish Investment Fund Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Do good or expect a better return?
Jonas Nilsson, The Ume School of Business and Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Responsibility how does it affect performance?
Emma Sjstrm, Nuwa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Transparency helps investors make decisions
Axel Edling, The Ethical Council for Investment Fund Marketing (ENF). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
P R I a s a d r i v i n g f o rc e
ENFs statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
We are aided by ENFs statement
Anna Nilsson, Swedbank Robur . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Screening how it works
Ulrika Hasselgren, Ethix SRI Advisors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Good ethics are a cornerstone of the entire investment fund sector
Lena Falk, Swedish Investment Fund Association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Foreword
The subject of this book is the involvement of fund
management companies in sustainability issues. Every
fund management company is the subject of wideranging demands for good ethics and a sound approach,
and the imposition of special environmental and social
issue criteria is becoming more and more the norm.
It began with special ethical funds that exclude companies with links to
such sectors as weapons, alcohol and tobacco. The trend has now shifted,
Pia Nilsson
Fund Association
they invest.
Fund managers are keen to take their share of the responsibility. The
sector as a whole wants to be characterised by transparency and by tak
ing a long-term responsible approach. Fund saving is very suitable for
long-term savings plans, such as regular monthly saving, and funds are
a particularly popular alternative when it comes to saving for a pension.
Fund managers are legally obliged to work in the best interests of their
unit holders, which means achieving the best possible return in line with the
environmental, energy and climate issues, and on human rights, work envi-
funds investment orientation and any special criteria. It is vital that savers
ethics. These are not issues of black and white and it can be difficult to
draw the boundaries between what is and is not acceptable. Dialogue and
2012 has seen the introduction of the EUs new KIIDs for funds.
transparency are the tools everyone can use in their efforts to bring about
their chances of a higher return, while others are prepared to waive return
for the sake of doing good. The research also shows, however, that there is
Principles for Responsible Investments (PRI). This book, which has been
no generally applicable link between either higher or lower yields for funds
information about both SWESIF and PRI and we hope that it will not only
RESPONSIBLE INVESTMENTS
Dialogue and
transparency are
the tools everyone
can use in their
efforts to bring
about improvements and help inspire innovation.
RESPONSIBLE INVESTMENTS
T r e n d s a n d fact s
Managing sustainably
and responsibly
a natural development of active management
What does managing responsibly and sustainably mean
in practice? And what does it mean for the information you seek from the companies? These are common
questions put to me by companies and colleagues alike.
Sustainability seems to be perceived by many people as
being a difficult and unclear concept. Personally,
I believe its about common sense. Running a company
in a responsible and sustainable way means maintaining good control over costs and conducting good risk
management. Saving resources and being aware of the
Anette P Andersson
Investment Fund Manager,
SEB Fonder
Companies with high quality sustainability work are often also well-run from
another example. These two examples may be somewhat extreme, but if these
companies had had better risk control, this might have been possible to avoid.
can be converted directly into cold hard cash. Good risk control allows these
a picture of the way in which they conduct their operations? The most im-
are better positioned to handle increased costs such as taxes, customs duties
committed. They must be able to present their strategies for resource utilisa-
ligence means the company is able to react more quickly and deal more ef-
comply with the UN Global Compact (see page 18), which includes the most
which has paid for that lack. The disastrous oil spill in the Gulf of Mexico in
like to see them report their emissions to the Carbon Disclosure Project an
forced the company into expensive legal proceedings. The USD 20 billion or
so that the company is planning to pay out in the form of compensation is lost
and cities.
profit. Siemens, which was convicted of corruption and fined EUR 2 billion is
10
RESPONSIBLE INVESTMENTS
11
RESPONSIBLE INVESTMENTS
T r e n d s a n d fact s
Ylva Hannestad
ESG analyst, Nordea Fonder
In 2011, the team from Nordea that work with responsible investments visited Cambodia, for example, in order to meet with some of
Hennes & Mauritz suppliers. The visit was triggered by a number
of reports of substandard working conditions amongst H&Ms suppliers in
Cambodia. It had, for example, been reported that there had been several
cases of employees fainting at work at one of the suppliers.
We discovered, during our visit, that the local investigations into the incidents were incomplete. Some reports suggested exhaustion as a reason
for the employees having fainted, while others suggested that the incidents
were due to mass hysteria. Our investigation clearly showed that there are a
12
RESPONSIBLE INVESTMENTS
the company should take, including improving the air conditioning system
Both Nordea and H&M were happy with the open and positive attitude on
the part of the factorys Chinese management team. The factory immediately
and improving access to drinking water during working hours. The company
also needed to find a better way of managing working hours and overtime
working conditions.
13
RESPONSIBLE INVESTMENTS
T r e n d s a n d fact s
Marianne Nilsson
Corporate Governance
Manager, Swedbank Robur
14
RESPONSIBLE INVESTMENTS
There is also a growing realisation on the part of asset managers that this
tation and steering systems detailing the companies concrete measures to make improvements in these areas.
helps improve value creation within the companies. Here at Swedbank Robur,
we largely conduct our work as active owners in the run up to and during
it benefits our investment fund savers. We are also keen to promote the
In Sweden alone, we vote at around 150 general meetings every year and we
nership with other owners. Important ownership issues include, for example,
also sit on over 60 nomination committees. Over the years, we have built up
our ownership activities and we use both internal and external resources, e.g.
up with suggestions with regard to the election of Board Members and Audi-
tors, amongst other things. In the USA and UK, for example, the nomination
Our ownership policy describes the way in which we exercise our corporate
committee is an offshoot of the Board, while in Sweden, the work of the com-
mittee is conducted outside the Board. The nomination process has become
invest. The ownership policy is available in full on our website, where we also
dent Members is assessed, and it is also important that the Board contains a
all of our funds, and our sustainability analysts are continuously updating
wide range of expertise that is in line with the requirements of the company
in question. The composition of the Board must also ensure that the benefits
sustainability services.
15
RESPONSIBLE INVESTMENTS
T r e n d s a n d fact s
Henrik Malmsten
Chairman of SWESIF
The positive selection process, i.e. one that involves actively selecting the
question of a save the world mentality: rather the aim is to achieve the
best possible return on the investment. The key factor is the way in which
achieved its breakthrough in the early part of this century. The method is
primarily implemented in one of two ways: using the best in class method
matically result in either a higher or a lower return. It is, first and foremost,
involves choosing to invest in those companies which, within their own sec-
16
RESPONSIBLE INVESTMENTS
ments, the most common of which are opting out or opting in certain
nal investors have increased their involvement in this type of approach, and
hence enhanced its effectiveness. The most modern fund managers nowadays
ating in the armaments, tobacco and alcohol sectors, for example. This was
17
RESPONSIBLE INVESTMENTS
T r e n d s a n d fact s
ments can seem like a jungle. The path through that jungle for those in-
SRI, Sustainable and Responsible Investments. Sustainability refers to long-term sustainable development that takes into account future generations. Responsibility refers to issues
such as human rights, labor and environment.
CSR, Corporate Social Responsibility. The idea of CSR is that a company has obligations to
stakeholders other than its owners. The company is, in other words, managed in a way that
takes into consideration environmental and social responsibilities, alongside the financial
targets. CSR can facilitate responsible investments, i.e. investments where the choice of
investment object is determined by the investors own criteria or values, beyond expectations of financial returns.
ESG, Environmental, Social and Governance issues comprises criteria that relate to environmental responsibility, social responsibility and corporate governance. There has been an
increasing focus on ESG in recent years.
Global Compact. Just over 6,000 companies worldwide comply with the United Nations
Global Compact (UNGC), which is a UN initiative designed to encourage companies to
take on board and implement sustainable and responsible methodologies as part of their
operations. There are also a number of OECD guidelines.
18
GRI, The Global Reporting Initiative, is a non-profitmaking organisation that has compiled
a relevant and usable standard for sustainability reporting. Over 3,000 companies now
RESPONSIBLE INVESTMENTS
19
RESPONSIBLE INVESTMENTS
T r e n d s a n d fact s
From niche to
mainstream
The next stage in responsible investments will be
the development of more integrated products
in which relevant environmental aspects, social
aspects and business ethics aspects will be integrated into every fund, right from the start.
It is clear, from the reviews of ethical funds that have been carried out, that todays funds do not match up to the expectations
of the outside world. There seems, for example, to be a general
perception that ethical funds automatically prohibit investments
Sasja Beslik
CEO of Nordea Fonder
they choose those companies that are best in class from a financial, envi-
the portfolio, even if one is a relatively small owner. It is not the size of the
Group 3 comprises theme funds. A climate fund, for example, chooses companies that show special attention to climate concerns or which have pro Group 4 comprises funds that integrate environmental aspects and social
visit companies, we leave behind us knowledge and ideas for ways in which
aspects into ordinate funds. This is the type of product that will gain even
the business can develop, but we also leave behind clear action plans and
greater ground in future because not only do they actively help generate a
follow up on them.
RESPONSIBLE INVESTMENTS
holding that makes the difference; it is the knowledge of the companies oper
good return, they are actively helping to build a more sustainable world.
20
Finally, I believe that the number of explicitly ethical funds will decline in
future and that they will be integrated into the normal management process,
becoming part of the standard range of funds offered to savers.
21
RESPONSIBLE INVESTMENTS
T h e s av e r s
Very important 5
quality funds that are orientated towards ethical, environmental and responsible investments, assigning an average
sa Drakenberg
Head of Communications,
fering ethical funds than do men, with women giving this factor a rating of
Fund Association
difference between the different age groups, but the ethical factor is slightly
more important in the most senior age group (aged 6379) than in the
Unimportant
All
Women
Men
Source: TNS Sifo Prospera 2012.
women.
22
RESPONSIBLE INVESTMENTS
23
RESPONSIBLE INVESTMENTS
T h e s av e r s
Do good or expect a
better return?
Theres nothing particularly surprising about the fact that
that this societal trend has also had an impact on the invest-
Jonas Nilsson
As ESG factors (see info box) have become ever more important within the
financial sector, there has been a growing interest on the part of the research
are a good way of achieving a healthy financial return. For these savers,
invest in ethical funds? Is it simply in order to make the world a better place,
Research Platform)
Online
The full text of Jonas Nilssons thesis can be found at www.ub.umu.se.
Search for Consumer decision making in a complex environment.
24
RESPONSIBLE INVESTMENTS
25
RESPONSIBLE INVESTMENTS
T h e s av e r s
Emma Sjstrm
PhD in Economics and
Founder of the knowledge
agency NUWA
It is possible to find support for both beliefs: that funds and indices that take
their conventional equivalents and that they perform worse. Many research
differ.
ers, however, seem to have found that it makes no difference to the riskadjusted return.
This view is confirmed by, amongst other things, the overview study I have
conducted and which involved reviewing all of the academic research in the
area published between 2008 and 2010. My research shows that of twenty
one studies, one third found that responsible investments did not result in
either a higher or a lower return. Almost the same number of studies show
credible.
a mixed result within the same field of investigation, e.g. that it varies over
time, between products or between markets. There are also five studies which
Why are the returns higher or lower in different cases? Only then would
It is no real surprise that the research has yielded such different results. The
studies use data from different markets and different periods of time, and
examine different types of products. Researchers may use different calibration methods and the rigour of their studies may also vary. Whether a fund
(responsible or not) has performed better than a comparison fund can also
be affected by factors other than those that can be directly linked to environmental and social responsibility a fact not always considered in the studies.
26
RESPONSIBLE INVESTMENTS
Online
Emma Sjstrm (2011), The performance of socially responsible investment: A review of scholarly studies published 20082010. Stockholm
School of Economics; Nuwa AB.
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1948169.
27
RESPONSIBLE INVESTMENTS
T h e s av e r s
ample, clearly specify the sectors or products that the fund has deselected. The
A professional
operation must,
of course, respect
current conventions
with regard to
human rights, along
with international
norms intended to
protect the climate
and the environment.
five per cent of the turnover of a company in which the fund invests may come
from a sector that the fund management company claims to avoid. It has been
suggested, from time to time, that this level should be lowered and a zero toler
ance approach instituted. The ENF came to the conclusion that this would be
an empty gesture, rather than a realistic requirement. It is currently virtually
impossible to establish without any shadow of a doubt that none of the turn
Many savers are looking for investments that can help promote a good performance, not only with regard to their personal savings, but from a wider
perspective as well: one that includes global environmental and fairness issues, for example. The range of funds now being marketed as particularly
Axel Edling
Chairman of the Ethical
tice offers a natural starting point in this respect: all marketing must be true
Marketing (ENF)
and reliable and must provide sufficient information to give savers a reasonable basis on which to make an informed decision. This is particularly critical
when the products are, by their nature, difficult to assess, which is the case
for investment fund savings. It is also vital for the industrys own credibility
amongst consumers that the information lives up to stringent standards.
Not only is a fully detailed product description vital, there must also be
a system of monitoring ensuing adherence to the funds investment policy.
Transparency on these matters is key, not only before the purchase decision is
taken, but during the subsequent relationship between funds and savers. One
question that we discussed in ENF during our work on the guideline was
whether the concept ethical should be defined. We decided that it would
be inappropriate to try and do so. The concept is, admittedly, imprecise, and
there is a risk that it will be used in a sweeping way that paves the way to false
expectations on the part of savers. But it is simply not possible to establish
once and for all exactly how high the ethical bar should be placed. It is more
appropriate, in this context, for the deciding factor to be savers preferences.
One of the core points of the ENF guidelines is that when a fund manage
ment companys marketing stresses that a particular fund is orientated
towards environmental or social considerations, for example, it must also
make it absolutely clear on what basis it makes this claim. It must, for ex-
28
RESPONSIBLE INVESTMENTS
over in the companies in which the fund invests comes from certain deselected
sectors. We have also assumed that enabling consumers to base their choices
on improved transparency with regard to the companies work in such areas as
ethics and the environment will lead the trend towards zero tolerance.
The use of the ethical label also seems to have declined slightly in recent
years in favour of the more concrete and more comprehensible one of a
focus on responsible investments, the environment, sustainable development,
and so on. This trend is, in my opinion, a good one, not least when one bears
in mind the question marks that can otherwise arise with regard to funds that
are not launched as ethical ones. A professional operation must, of course,
respect current conventions with regard to human rights, along with international norms intended to protect the climate and the environment.
The range of funds offered and the way in which savers behave is character
ised by a dynamic. Issues in relation to responsible investments are attracting
a lot of attention, both here in Sweden and internationally. The ENF has
announced that the guidelines will probably need reviewing in a few years
time, and we are keen to hear about the experiences of both consumers and the
sector, and to learn about their experiences.
29
RESPONSIBLE INVESTMENTS
T h e s av e r s
he ENF is of the opinion that the following criteria must be met in order
T
for a fund to be marketed as ethical or described using another similar
term that states or implies that the fund focuses on investments on the
basis of specific environmental, social or other similar considerations.
The fund management company shall have a clearly defined process
for selecting its investments. This requirement applies whether the fund
applies positive or negative criteria in its selection process, or whether
the company works by attempting to influence the companies in which
it invests to move in the desired direction.
The fund management company shall have a function that continuously
monitors and ensures compliance with and adherence to the selection
process.
When investments are made on the basis of negative selection criteria,
a maximum of five per cent of the turnover in the companies in which
investments are made, or of the corporate group of which the company
is part, may refer to operations that do not live up to the special requirements established by the fund management company.
30
RESPONSIBLE INVESTMENTS
The fund management company shall, over and above the information
on the funds investment orientation that must be contained in its fund
provisions, KIID and information brochures, also present details of the
following in a clear and easily accessible manner:
the companys investment policy for the fund, including
information on selection criteria and turnover limits, and
the companys selection process for the fund and the way
in which the process is monitored and ensured.
The information shall be provided on the companys website, but it must
also always be available in printed form.
The fund management company shall provide a detailed account in its
annual report and Q2 reports of the way in which it has complied with
the investment policy with regard to the orientation of investments based
on special considerations. The fund management company shall also,
to the extent that it has deviated from this policy, specify the measures
taken as a result thereof.
31
RESPONSIBLE INVESTMENTS
T h e s av e r s
product range for the last thirty years now. The 1990s saw
Anna Nilsson
Head of Swedbank Roburs
sustainability analysis
32
RESPONSIBLE INVESTMENTS
It was not until eight years ago that a guideline statement was issued by
the Ethical Council for Investment Fund Marketing (ENF) on the ways in
Swedbank Robur believes that the fact that there are now far fewer funds
tion sheet can be used by funds to show how their management takes envi-
The core point of the guideline statement from ENF is the requirement for
of the public, but can also be a useful tool for advisors. The sustainability
for its external communication regarding the criteria, selection process and
results to be clear. The nature of sustainability funds can vary widely some,
for example, only invest in companies that perform the best sustainability
One year after its introduction, the sustainability profile was being used
work within their industry and that do not manufacture weapons or to-
by all of the major players in the Swedish market, and SWESIF is working
bacco so it is vital that customers can see what every fund stands for and
on how it can be refined and how the use of and familiarity with the profile
hence be able to choose the funds that are the best match for their personal
could be further increased. We are taking an active role in this work because
sustainability criteria, our analysis resources, and our analysis and selection
33
RESPONSIBLE INVESTMENTS
T h e s av e r s
Screening is also a common concept when talking about responsible investments, strategies for sustainability, or ethical and environmental funds.
Ulrika Hasselgren
ceo of Ethix SRI Advisors
searches within a given population (e.g. a funds holdings) for a certain factor
which may have an effect on the holding (the company) or the fund. Screen-
these cases is done directly via the company concerned as well as through
number of companies. The fund manager can then either engage in a dialogue
of certain fixed criteria, such as the environment and human rights actively
with the companies, with the aim of influencing them in the areas that have
these criteria.
the criteria set for the screening process. If environmental and human rights
for the environment and human rights was Sjunde AP-fonden, which was
tasked by Swedens Parliament, way back in 2000, with taking ethical and
and the media. The information obtained, when combined with information
obtained from companies and industry organisations, forms the basis for
evaluating a problem or a companys involvement in a particular situation.
If the criteria refer, instead, to sectors or products such as alcohol, tobacco
and armaments the systematic search is carried out within the company,
through their annual reports, and through industry and expert organisations.
Another form of screening involves making a positive selection of companies adjudged to perform well in terms of e.g. environmental and social re-
sponsibility, and who are successfully managing their risks and opportunities
34
RESPONSIBLE INVESTMENTS
35
RESPONSIBLE INVESTMENTS
T h e s av e r s
issues. But good ethics are definitely a matter for all fund
management companies in that all fund management must by
holders.
important task for the industry as a whole. That is why, in addition to the
various legislative and regulatory provisions, there has been a system of self-
regulation for many years now that is designed to summarise the principles
Transparency and good information are amongst the most important tools
that should govern the way in which fund operations are conducted in Swe-
den. The Swedish Investment Fund Associations own Swedish Code of Con-
Fund Association
duct for Fund Management Companies details good practice in the Swedish
investment fund market, and compliance with the Code is mandatory for all
Lena Falk
Deputy General Counsel,
the Code is that fund management operations shall be sound and shall be cha-
racterised by high integrity. The Code also requires all those who represent
standard and an industry that acknowledges its responsibility for a high stan-
dard of ethics in the investment fund sector and thereby also generates the
Online
best possible return and to act in the collective best interests of the unit
holders. To what extent does this formulation offer the scope for taking
other aspects into account in addition to the specific one of returns? The
36
RESPONSIBLE INVESTMENTS
37
RESPONSIBLE INVESTMENTS
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
A sustainable approach,
whatever the fund type
Equity funds are probably the funds that most savers
associate with sustainable investments. There are
good reasons why this is the case in that as shareholders, one is responsible for the way in which the
companys operations are conducted.
Twenty five years ago, Swedish and other Nordic companies largely
operated exclusively in their domestic markets, where laws were set
in accordance with clear, democratic rules of the game. This meant
it was relatively easy to manage a Nordic equity fund, simply by
avoiding companies with undesirable products.
Globalisation has exposed Nordic companies to new risks: their
manufacturing and subcontractors are nowadays increasingly locat
ed in developing countries where the parent companies encounter
the sort of problems and challenges that characterise these markets,
such as low economic standards and undemocratic governance. Companies
dedicated specific resources to this end. The funds managers also actively
in the form of the threat of climate change, which means that those compa-
discuss the sort of measures they could take. The international scope of the
nies who want to be part of a sustainable future must change their produc-
Nordic companies operations means that these dialogues can range all the
realising that they must review a products entire lifecycle, and even indirect
The investment fund sector has had to change in line with these external
changes. Managers of sustainable equity funds must assess a multitude
of new factors as part of their investment decisions nowadays. Does the
Sustainability risks often pose very real financial risks for the companies as
well, and it is just as important for the manager to have control over these
human rights and labour rights? What is the companys attitude towards
have instituted an ethical platform that establishes a minimum level for the
38
RESPONSIBLE INVESTMENTS
39
RESPONSIBLE INVESTMENTS
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
Sustainability an opportunity
in emerging market funds
East Capital, which focuses on emerging markets
in Eastern Europe, Russia and China, is working
actively to integrate an analysis of material and
relevant factors in connection with the environment, social conditions and corporate governance
(ESG) into its investment process.
Louise Hedberg
Director Ownership Issues,
East Capital
40
RESPONSIBLE INVESTMENTS
41
RESPONSIBLE INVESTMENTS
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
Liza Jonson
CEO of SPP Fonder
been screened out. The fund provisions were then revised and the funds
notice and comes up with new or adjusted products. Tomorrows winners will
continued to be index tracking. Once the new fund provisions and the new
whole should invest if we are to secure long-term returns for our customers.
42
RESPONSIBLE INVESTMENTS
*It is possible to track a screened index and still categorise the funds as index funds. The disadvantage
lies in the fact that doing so makes it harder to achieve comparability between different funds.
43
RESPONSIBLE INVESTMENTS
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
Anette P Andersson
INVESTMENT Fund Manager,
SEB Fonder
Green bonds
In 2008, the World Bank and SEB launched World Bank Green Bonds.
These green bonds are issued to finance projects with a sustainability and
developmental perspective, in order to meet the investors requirements.
Online: http://sustainableperspectives.sebgroup.com/en/Stories/SEBpartners-with-World-Bank-to-create-Green-Bond/.
44
RESPONSIBLE INVESTMENTS
45
RESPONSIBLE INVESTMENTS
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
Erik Eidolf
CEO of Vontobel Stockholm
What is required instead is that the investor analyses how each specific
hedge fund is managed and how, based on the results of this analysis,
ESG criteria can best be integrated. PRI proposes that investors, precisely
as with traditional funds, break down the management into component
parts, such as the type of assets to which the hedge funds are exposed and the
way in which this exposure can be managed responsibly. This may include
analysis of corporate governance, of the underlying instruments used, of
the way in which the portfolio is constructed, and the hedge fund strategies
implemented, etc.
is every likelihood that the hedge fund sector will increasingly be examining
46
RESPONSIBLE INVESTMENTS
47
RESPONSIBLE INVESTMENTS
D i ff e r e n t t y p e s o f f u n d s s am e r e s p o n s i b i l i t y ?
Different approaches a
challenge for commodity funds
Interest in raw materials as an investment object has
increased amongst institutional and private investors
alike in recent years. Raw materials offer several
advantages they spread the risk in a portfolio and
they work well in conjunction with inflation.
Magnus Strmer
Raw Materials Director,
Handelsbanken
48
RESPONSIBLE INVESTMENTS
49
RESPONSIBLE INVESTMENTS
T h e c o mpa n i e s a n d cap i ta l o w n e r s
discussed at Board level in these companies too, even if the Board is less com-
Approximately 14 per
cent of the companies see working with
sustainability
issues as a compe
titive advantage.
only just begun. The Boards responsibility for sustainability issues in these
companies is limited.
But are they actually doing so? Are they working with sustainability issues in
One of the most important conclusions to be drawn from the 2011 survey
a systematic way, and if so, who takes responsibility for sustainability issues
is, therefore, that there is a need for an increased dialogue within trade and
Sustainable value generation investor initiative (see info box) have twice
one another. We, as investors and owners, are keen to participate in this
(once in 2009 and once in 2011) sent questionnaires to the 100 biggest com-
process in order to help generate even stronger and even more sustainable
value growth.
The conclusion that can be drawn from these surveys is that there are
substantial differences in ambition and results from one company to another,
with three groups clearly distinguishable.
In the first group (approximately 14 per cent of the companies), the Board
takes extensive responsibility for sustainability issues, and these issues are an
integral part of their commercial operations. They see working with sustaina
bility issues as a competitive advantage, a means not only of minimising
risks but of cutting costs and boosting sales, and of attracting and retaining
employees. They also communicate their work in detail.
In the second group (just over half of the companies), a systematic pro
gramme of sustainability work has been launched but is less advanced.
The companies have guidelines for many areas in place and have begun
implementing them, but there is still some work to be done before the sustainability work is fully integrated into the commercial operations. These
companies also report their work to some extent. Sustainability issues are
50
RESPONSIBLE INVESTMENTS
Online
Find out more about the results of the survey and interviews with the
Chairpersons of the Boards of several listed companies at
www.hallbartvardeskapande.se. In Swedish.
51
RESPONSIBLE INVESTMENTS
T h e c o mpa n i e s a n d cap i ta l o w n e r s
B o l ag e n
Responsibility, respect and decisiveness are three key words that we use,
here at ABB, to describe our commercial principles. These three simple
Anders Nordstrm
Group Advisor on
sustainability issues, ABB
Almost 1,000 people around the world are working with our environmental
added at a later date and are still being developed. We have, for example, a
and where the goal is to have trained senior executives in our twelve most
of continuous improvement.
in 47 countries.
We set all of our goals and measure our environmental performance, social
parameters and health and safety indicators on the basis of the findings from
ter and a stronger company, and we are convinced that they help ensure
around 360 plants around the world. The data are aggregated in a global
ABBs integrity
programme currently
has 63 ombudsmen
in 47 countries.
52
RESPONSIBLE INVESTMENTS
53
RESPONSIBLE INVESTMENTS
T h e c o mpa n i e s a n d cap i ta l o w n e r s
Active owners
Engaging in an active dialogue with our
It is consequently
vital that we identify
managers that can
follow our stringent
financial policy.
One way is to choose companies that manufacture products and services that
Gunnela Hahn
Head of Responsible
tor has long been run by short-term reward structures something that is a
Investments,
substantial hindrance for us and others who are keen to see long-term value
term bonus systems. We are actively involved in a number of networks for in-
conditions and human rights throughout their organisation, and this includes
working with their suppliers. One of the fund managers in whose funds we
invest has its own stock market index for very large companies and for which
companies have to qualify. This places pressure on the mega corps to work
invest and have adopted a number of issues as themes over the past year, e.g.
how companies should act in countries suffering armed conflict and how
peoples integrity and freedom of speech online can be protected.
identify managers that can follow our stringent financial policy. The policy
ers in developing countries in order to cut costs. But since water purification
states what we want to invest in and what we want to avoid. We will avoid,
tical products ending up in the environment. This has led to the occurrence
of antibiotic-resistant bacteria. When this is the case, we are keen to see the
fossil energy sources such as coal and oil. We are keen to help solve climate
change issues and consequently prefer companies that offer renewable and
54
RESPONSIBLE INVESTMENTS
55
RESPONSIBLE INVESTMENTS
T h e c o mpa n i e s a n d cap i ta l o w n e r s
Responsible investments
investments in perpetuity
The City of Gothenburg manages about one hundred foun
a number of international conventions, and in order to ensure compliance with these guidelines and
requirements, we have mandated
Magnus Borelius
Chief Financial Officer,
City of Gothenburg
56
RESPONSIBLE INVESTMENTS
returns for many years to come, in order to fulfil the aims of the donor found
ers. Managing these foundations, as the City has undertaken to do, is a huge
important area that we address when reviewing and evaluating the ways in
which the foundations assets have been invested. The work has been carried
The goal of the asset management operations is to maintain the real capital
income over time and, at the same time, to ensure the dividend level remains
keen to play our part in influencing the creation of a better society, and se-
securities with three asset managers. The capital is managed via a fixed in-
come fund, an equity fund and a portfolio containing both shares and fixed
responsibility for these issues. People should be able to rely, when they decide
income securities. The primary focus of the funds is on value growth, while
the mixed mandate focuses on dividends. The investments are made in ac-
cordance with guidelines laid down by the City Council and include ethical
57
RESPONSIBLE INVESTMENTS
P R I a s a d r i v i n g f o rc e
1. We will incorporate ESG issues into investment analysis and decision-making
processes.
2. We will be active owners and incorporate ESG issues into our ownership policies
and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the
investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the
Principles.
Online: www.unpri.org
58
RESPONSIBLE INVESTMENTS
59
RESPONSIBLE INVESTMENTS
P R I a s a d r i v i n g f o rc e
Signing up to PRI means taking a clear stand and saying that sustainability and corporate
governance issues are important to our operations, both as managers and as owners, and
that they are important in terms of the funds long-term returns. Signing up to PRI has
meant, amongst other things, that we have extended the cooperation between our sus
tainability analysts and our managers, with the managers receiving structured reporting
on the companies sustainability work. We have also conducted several corporate dialogues in other countries and introduced a system of ongoing evaluation of our broker
contacts, based on their sustainability services.
For Handelsbanken, PRI is a valuable framework within which we can work with responsible investments. Our ambition is to integrate ESG issues into every aspect of our manage
ment work. We believe that the active ownership principle can achieve a major break
If customers have entrusted you with the management of their assets, the management
through with so many capital owners and managers opting to work in accordance with PRI.
must be conducted in a responsible and sustainable way. The UNs PRI initiative makes
We are also hoping that PRI will give us additional opportunities to work with other players
our view of environmental aspects, social issues and corporate governance questions
clear both to our customers and to ourselves. By working actively with these issues, we
reduce risks and make the most of business opportunities. We also know that these issues
are important in terms of a companys profitability in the longer term, and consequently
The annual reporting to PRI has given Storebrand a greater insight into what we are good at
and where we could improve. The reporting has also given us a better grasp of the concrete
integrate them into our investment processes. PRI also gives us access to a global platform
that enables cooperation with investors all over the world on a variety of different issues
which is a huge plus.
improvements that have resulted from the hundreds of contacts we have with companies
every year. PRI has also made it easier for more investors to get together and influence
companies on individual issues. Our experience indicates that this sort of cooperation yields
good results.
We have chosen, in line with the UNs PRI initiative, to create a policy that encompasses
all of our funds, and are hence endeavouring to integrate relevant environmental, social
and corporate governance issues into all of our investment decisions. We have gained acJonas A Eriksson, Skagen Fonder
Ethics have always been an important component of our analysis process when we choose
companies in which to invest, so signing up to the UNs PRI initiative has had no impact
on our investment philosophy. We have monitored the UNs work in this sphere since 2006
and signed up in the autumn of 2012 because we believe that doing so is in the best inter
ests of our unit holders. We have been working with a number of external suppliers of
information in this field for a long time, in order to ensure the best possible basis for our
cess to an extensive network of other managers and capital owners, facilitating cooperation between investors. We have, for example, been part of a cooperative project that saw
Nordea, along with other investors, writing to 86 companies, urging them to improve
their reporting on environmental, social and corporate governance issues. PRI has also
enabled us to be involved in and influence the development of responsible investments at
international level.
decision-making.
60
RESPONSIBLE INVESTMENTS
61
RESPONSIBLE INVESTMENTS