At Danske Invest, we have a strong commitment to integrate ESG factors in our investment process alongside financial factors in a holistic approach to investing. It is part of our fiduciary duty and fundamental to deliver competitive and long-term returns to our investors. ESG is a key concept within sustainable investments and covers a wide array of issues within environmental, social and governance aspects.
Most recently, we have strengthened the ESG focus and engagement processes in two of our funds; Sverige Kort Ränta ("Swedish short term bonds") and Sverige Småbolag ("Sweden small cap") as well as implemented investments restriction for specific sectors. The funds were already based on strong ESG integration, restrictions and proactive engagement when they were launched, and now it is reflected in the prospectuses and strategies going forward.
This means that the funds’ portfolio team analyses how companies perform on ESG issues e.g. environmental and climate issues, occupational health and safety and corporate governance in addition to financials indicators. Based on the holistic analysis, we select companies for the funds, which have strong financial performance, ESG implemented into their core business or great potential to improve their ESG work.
Integrating ESG into the investment process helps us:
- attain deeper insight into how companies manage ESG-related risks and opportunities
- make better-informed investments based on a holistic assessment
- targeted dialogue with companies on material ESG matters
“Integrating ESG into our investment process alongside financial factors is part of our fiduciary duty to safeguard and enhance our clients’ investments. Identifying and understanding how companies manage ESG-related risks and opportunities is paramount when assessing their future growth potential. Also, it is a tool in our ambition to promote sustainability more broadly in society,” says Ulrika Hasselgren, Global Head of Sustainability & Impact Investment.
Proactive dialogue furthers sustainability
Together with ESG integration, dialogue is essential to push companies in a sustainable direction and for future-proofing investments. The portfolio teams working alongside our ESG specialists are in systematic and proactive dialogue with companies to obtain insight into ESG-related risks and opportunities and contribute with suggestions that advance sustainable businesses growth. We focus on material financial and ESG issues that will most readily enable companies to create long-term returns on a sustainable foundation.
“As an investor we have an opportunity to put sustainability on the agenda and to act as sparring partners for companies. With us bringing new insights and solutions to the table, we can play an important role in collaboration with the companies to create a roadmap for sustainable and responsible growth,” says Ulrika Hasselgren.
The funds will continue to adhere to our investment restrictions with regard to coal, tar sands and controversial weapons such as; landmines, cluster bombs, chemical and biological weapons and nuclear weapons. In addition, the funds will not invest in companies where the majority of their revenue is derived from sectors such as alcohol (<5% revenue), tobacco (<5% of revenue) and pornography (<1% of revenue).
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About the funds
The Sverige Småbolag ("Sweden small cap") invests mainly in Swedish equities with a focus on small and medium sized companies. The Sverige Kort Ränta ("Swedish short term bonds") invests mainly in Swedish bonds that have a short duration and money market instruments.