Creates value for customer returns
Environmental and social conditions and good governance practices (ESG) are also referred to as sustainability issues. How companies and countries work with sustainability issues can significantly influence whether or not they are good investments. Because of this, our portfolio managers incorporate sustainability factors into their analyses, which gives them greater knowledge of an investment’s future potential for generating good financial returns.
ESG-funds (Article 8)
Funds that promote environmental (E) and/or social (S) factors and ensure good governance (G) practices are called ESG funds at Danske Invest. These funds promote E/S characteristics through screening, restrictions, investment analysis, and active ownership, but they do not have sustainable investments as their objective. The funds integrate ESG by systematically identifying and addressing sustainability factors during the investment process.
ESG funds comply with Article 8 of the EU regulation on sustainability‐related disclosures in the financial services sector.
Customised sustainability approach
Our funds have different investment strategies and invest in different companies and countries. For example, there is a big difference in how sustainability plays a role for emerging-market equities in relation to investment in Nordic corporate bonds, and in how companies work with sustainability within and across industries. For this reason, the funds also work with sustainability in different ways in order to create the highest possible value for customers.
Working systematically with sustainability risks
We focus on analysing and reducing sustainability risks in order to protect your investments. If the companies do not manage and address sustainability issues, there may be negative consequences for earnings and for your potential return. Because of this, we analyse whether the companies, for example:
- take climate issues into consideration
- live up to human rights obligations
- have good employee conditions
- do not damage biodiversity
- do not contribute to water pollution
- work to combat corruption
This helps us select sustainable and robust investments that can potentially generate attractive returns for you.
Example: Climate-related risks and opportunitiesThe climate agenda can potentially have a bearing on whether or not an individual company is able to deliver good returns. Consequently, the green transition plays an important role when we select investments. Our thorough analysis of climate factors helps us to select the companies that are best equipped to deal with climate issues and to embrace the green growth opportunities.
In the ‘Climate: Our Investment Approach’ report, you can read examples of our climate approach in the paper industry, the energy and financial sector, copper and the automotive industry.
Read the report here
Our portfolio managers use a number of tools to identify and analyse business-critical sustainability issues in their efforts to select good investments.