This is how ESG factors can increase profit

The PRI works to understand the investment implications of ESG factors and to support its international network of investor signatories in incorporating these factors into their investment and ownership decisions.

We were among the first Nordic institutions to sign the Principles for Responsible Investment (PRI) in November 2007.

The PRI is a network of international investors committed to implement six Principles for Responsible Investment into their investment management. These principles provide a framework for incorporating ESG issues into decision-making and ownership practices. We believe that implementing the principles will contribute to developing a more sustainable global financial system and align the objectives of investors with society. We are involved in a number of collaborative engagements within the PRI.

The PRI is truly independent and the world's leading proponent of responsible investment

The PRI is supported by, but not a part of, the United Nations and acts in the long-term interests of its signatories, of the financial markets and economies in which they operate. It has nearly 1,500 signatories, from over 50 countries, representing US$60 trillion.

By endorsing the PRI, we commit to implementing the six principles and integrating ESG factors into our investment analysis, decision-making processes and ownership policies and practices.

Water risks are a priority

Global fresh water supplies have become increasingly exposed to risk as a result of both growing demand, and pressures on supply, including those linked to climate change. Water-related risks and opportunities is important for our investments.

Nordea is a member of the PRI Water Risk Advisory Committee.  We are also involved in a collaborative engagement on the impact of water risk in the food, beverage, apparel and agricultural supply chains.

Better practices for climate lobbying

In 2015, we joined a collaborative investor engagement on climate lobbying with more than 60 investors coordinated by the PRI. The initiative calls for improvements in practice and transparency from investee companies on their climate change lobbying practices.

As part of the initiative The Investor Expectations on Corporate Climate Lobbying statement was prepared. This document states that company lobbying on climate change related policy and regulation must be in line with the universally accepted goal of limiting global temperature rises to 2°C.

Download the document here (PDF, 1,8 MB)

Promoting sustainability on an exchange level

The Sustainable Stock Exchanges initiative works as a partnership between stock exchanges, investors, companies, regulators and governments and the UN and affiliated organizations such as the PRI, to create more sustainable capital markets.

Nordea is part of the SSE Investor Working Group to promote better disclosure of environmental, social and governance (ESG) issues in the Nordic markets. 58 stock exchanges representing over 70% of listed equity markets, are official SSE Partner Exchanges and have made a public commitment to promote improved ESG disclosure and performance among listed companies and advancing sustainability in their market.

Download the Sustainable Stock Exchanges initiative document here (PDF, 1,6 MB).

Collaborative engagement on human rights in the extractive sector

Human rights is a focus area for Nordea’s stewardship activities and we expect all the companies we invest in to observe and comply with internationally recognised human rights principles. We are involved in a PRI collaborative engagement coordinated on human rights in the extractive sector. The engagement targets 50 global large cap mining and oil and gas companies with high exposure to human rights risks.

Extractive companies can face significant operational and reputational risks if they do not take adequate steps to manage human rights issues. Such risks include boycotts, project delays and cancellations, lawsuits and negative press coverage.

The six Principles for Responsible Investment

The principles are a voluntary and aspirational set of investment principles that offer a menu of possible actions for incorporating ESG issues into investment practice.

  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.

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