Responsible investments
We have been working with responsible investments since 1988, following international best practice.
Sustainability in DNB Asset Management
As a responsible investor with a long-term view, we aim to provide high, long-term returns, at an acceptable level of risk, whilst considering Environmental, Social and Governance (ESG) factors.
The DNB Group’s Instruction 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.
We exercise our 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.
Why we engage in responsible investments
To improve the information base for investment decision-making
ESG data is incorporated into our portfolio management system and is available to all of our investment professionals. Our portfolio managers use this data in their company risk assessments, financial modelling, investment decision-making and portfolio construction.
To reduce risk
We screen and assess companies using external ESG data and research, as well as in-house research. We highlight potential ESG risks and opportunities to the portfolio managers and alert them on realised and potential controversies. Based on this, we may provide input or recommend divesting or investing in particular securities. Portfolio managers receive alerts on both changes in ESG scores and realised or potential controversies once companies enter the portfolio.
To improve risk-adjusted returns
Our overarching aim is to influence companies to improve their practices, thereby securing long-term shareholder value and mitigating ESG risks, and taking advantage of ESG opportunities, in the best interest of our clients and as required as part of our fiduciary duty.
To capitalise on new growth markets and innovative companies
Our company assessments do not solely focus on mitigating ESG risks. An important part of our work is also identifying ESG opportunities. Where such opportunities are not sufficiently addressed by the company at present, we may engage in dialogue with the company and encourage them to explore these.
To align with ethics
Some of our screening, exclusion criteria and active ownership practices are purely ethically motivated. We offer funds with varying levels of the aforementioned, such as to cater to our clients’ differing ethics.
Our approach to responsible investments
Standard setting
Standard setting in many ways informs how we practice active ownership. DNB’s Instruction for Responsible Investments ensures that our investments are aligned with international norms and standards, and defines which products and services we do not tolerate. In addition, we develop and publish expectations documents to communicate our expectations to companies around best-practice and for use as a starting point for dialogues with companies, both reactively and proactively.
Active ownership
Active ownership, through company engagements and voting, is undertaken to ensure that our investment universe is in compliance with DNB’s Standard for Responsible Investments. Company dialogues may be undertaken to discuss specific ESG incidents (reactive), or to improve companies’ general performance in regards to ESG risks and opportunities (proactive). Another way to influence companies in a positive direction is by voting at general meetings. Our voting guidelines for Norway state that we shall vote at all Norwegian general meetings for listed companies we have ownership in, and we have adopted a systematic approach to determining which global companies’ meetings we will vote at.
Exclusions
We utilise screening and exclusions in our risk management processes. We screen companies prior to inclusion in our investment universe, quarterly for benchmark rebalancing, and on a weekly and daily basis for changes to ESG ratings or alerts on potential or realised breaches in international norms and standards. Companies that are found to be in breach of our Instruction for Responsible Investments may be excluded from our investment universe.
ESG-integration
We have a close dialogue with our portfolio managers on ESG risks and opportunities, providing screening and company analysis. ESG data is also incorporated into our portfolio management system and is available to all investment professionals. Portfolio managers receive alerts on both changes in ESG scores and realised or potential controversies once companies enter the portfolio.
Our signatory memberships and initiatives
The UN Guiding Principles on Business and Human Rights define the duty of states and businesses to protect against and reduce the risk of human rights abuses by business enterprises.
United Nations Environment Programme Finance Initiative (UNEP FI) is a partnership between UNEP and 200 banks, insurance companies and investment companies around world.
The OECD’s guidelines for multinational companies are based on principles and standard on human rights, transparency, anti-corruption, tax, employee relations, the environment and consumer interests.
The Principles for Responsible Investment (PRI) is a United Nations supported initiative working to make investors incorporate principles for responsible and sustainable investment in their investment decisions and active ownership practices.
We have signed and joined the PRI Advance initiative that launched in December 2022. PRI Advance is a group of 220 investors, representing more than $30 trillion USD in AUM of endorsed investors. The initiative is a human and labour rights oriented investor initiative and it is expected the agenda-setting nature of the initiative will be formative for DNB AM’s work going forward.
United Nations Global Compact is an international corporate network based on ten principles in the areas of human rights, labour, environment and anti-corruption.
CDP is an international, non-profit organisation providing a global system for companies and cities to measure, disclose, manage and share vital environmental information.
The FAIRR Initiative is a collaborative ESG investor network that DNB AM has participated actively in the past year on issues and opportunities brought about by Intensive livestock production. We have participated in six different engagement initiatives, pertaining to working conditions, sustainable aquaculture, meat sourcing, animal pharma, sustainable proteins as well as waste and pollution.
Climate Action 100+ is an investor-led initiative to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change.
The Task Force on Climate Related Financial Disclosure (TCFD) develops voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders. DNB supports the recommendations and is working on integration, standard setting and expectations towards companies. We are part of UNEP FI working groups on TCFD and reports according to the recommendations.
The United Nations Sustainable Development Goals (SDGs). The SDGs seek to provide a common global direction for countries, the business community and civil society. DNB endorse the goals. The SDGs are integrated into our standard setting and active ownership engagement work and are also seen as an important framework for investment ideas.