NAM’s Responsible Investment flagship solutions include both our ESG STARS family and our ESG Thematic range. The ESG STARS strategies are about positive selection of quality companies with well managed ESG profiles that generate long-term financial value, while the ESG Thematic strategies offer investors a focus on specific aspects of sustainability
Integrating ESG issues forms part of our fiduciary duty to clients and as such, all of our funds are subject to baseline ESG criteria via corporate-level overlays, to avoid companies that do not meet Nordea’s sustainability standards.
Today we have around 230 funds that have additional ESG filters and policies that go beyond our corporate overlays. These funds are classified as either Article 8 or 9 as per European Sustainable Finance Disclosure Regulation (SFDR), and since they all consider PAI elements within their investment processes, all of NAM’s Article 8 and 9 funds will be eligible under MiFID II regulation to be offered to clients with sustainability preferences.
Going a step further, we have special ESG flagship strategies in the ESG STARS family and our ESG Thematic range. The ESG STARS funds follow an approach of full ESG integration and positive selection, while the ESG Thematic strategies seek solutions to specific sustainability challenges. Our credentials extend to international ESG-labels such as LuxFLAG ESG label24, Label ISR25 and the Towards Sustainability label26.
ESG STARS strategies – Tomorrow’s winners
Our ESG STARS range is built on the belief that companies and issuers that integrate both ESG and financial metrics into their strategic decisions will be tomorrow’s winners. In these strategies, we aim to beat the benchmark through investing in companies or bonds that meet NAM’s ESG standards27.
Every investment in our ESG STARS strategies is examined through an ESG lens as well as on financial grounds. Our ESG analysts work closely with the investment teams to identify material sustainability risks and opportunities relating to the companies’ medium- to long-term operational performance and market positioning, and the results of their analysis feed into proprietary ESG models that are integrated into the investment process.
Active ownership and engagement are an important part of the ESG STARS’ investment approach. Our RI team and investment boutiques operate in close collaboration to engage in productive dialogues with many of our ESG STARS holdings. Additionally, the ESG STARS range covers a wide scope of regions and asset classes. In 2021, we’ve extended the ESG STARS range with the North American High Yield Stars Bond and the US Corporate Stars Bond strategies.
ESG Thematic strategies – Building a better future
In addition to our ESG STARS family, we also offer investors strategies that focus on specific sustainability themes and align with the UN’s Sustainable Development Goals (SDGs).
The Global Climate and Environment Strategy has been at the forefront of climate investing since 2008. The strategy seeks companies which use their talent and innovation to identify solutions to climate and environmental challenges, addressing topics such as resource efficiency, environmental protection and alternative energy solutions.
NAM’s Global Gender Diversity Strategy builds on our belief that gender diversity is not only key for an equal society but often goes hand in hand with other drivers of business success.
Nordea’s Global Social Empowerment Strategy targets the “S” in ESG. The ongoing health crisis and social inequality demonstrations are a strong reminder of the opportunities within the social pillar of ESG, which can be supported by investing in businesses that offer social solutions.
In 2021, Nordea’s ESG Thematic range was enhanced with two new strategies. Building on the expertise of team behind our successful Global Climate and Environment Strategy, our new Global Climate and Social Impact Strategy aims to provide meaningful solutions to meet pressing social and environmental needs. By addressing the interconnection between environmental and social challenges, investors in the strategy can be active players of the transition towards an inclusive green economy. The Global Green Bond Strategy, the first fixed income strategy within our ESG Thematic universe, was formally launched on Earth Day 2021 (22 April). The strategy’s goal is to create positive impact and contribute to a low carbon economy by investing in green bonds, social bonds and sustainability-linked bonds, as well as conventional bonds from green companies.
Sustainability reporting – Keeping our clients informed
We understand that investing your assets responsibly is not enough: transparent reporting on how we do this is essential. Therefore, in addition to the traditional financial reporting, we offer ESG reporting for a number of our strategies, both monthly and quarterly. In the more extensive quarterly ESG Reports, we report on the portfolio’s ESG metrics and sustainability exposure in comparison to a benchmark, both in aggregate and with specific factors. We also provide an overview of the key active ownership activities over the quarter.
Furthermore, we have recently introduced Impact reports for two of our thematic funds, the Nordea 1 – Global Social Empowerment Fund and the Nordea 1 – Global Climate and Social Impact Fund to bring out the positive contribution to one or more of the 17 UN Sustainable Investment Goals (SDGs) of each of our funds’ positions.
Disclaimer
Nordea Asset Management is the functional name of the asset management business conducted by the legal entities Nordea Investment Funds S.A. and Nordea Investment Management AB (“the Legal Entities”) and their branches and subsidiaries. This document is advertising material and is intended to provide the reader with information on Nordea’s specific capabilities. This document (or any views or opinions expressed in this document) does not amount to an investment advice nor does it constitute a recommendation to invest in any financial product, investment structure or instrument, to enter into or unwind any transaction or to participate in any particular trading strategy. This document is not an offer to buy or sell, or a solicitation of an offer to buy or sell any security or instruments or to participate to any such trading strategy. Any such offering may be made only by an Offering Memorandum, or any similar contractual arrangement. Consequently, the information contained herein will be superseded in its entirety by such Offering Memorandum or contractual arrangement in its final form. Any investment decision should therefore only be based on the final legal documentation, without limitation and if applicable, Offering Memorandum, contractual arrangement, any relevant prospectus and the latest Key Investor Information Document (where applicable) relating to the investment. The appropriateness of an investment or strategy will depend on an investor’s full circumstances and objectives. Nordea Investment Management AB recommends that investors independently evaluate particular investments and strategies as well as encourages investors to seek the advice of independent financial advisors when deemed relevant by the investor. Any products, securities, instruments or strategies discussed in this document may not be suitable for all investors. This document contains information which has been taken from a number of sources. While the information herein is considered to be correct, no representation or warranty can be given on the ultimate accuracy or completeness of such information and investors may use further sources to form a well-informed investment decision. Prospective investors or counterparties should discuss with their professional tax, legal, accounting and other adviser(s) with regards to the potential effect of any investment that they may enter into, including the possible risks and benefits of such investment. Prospective investors or counterparties should also fully understand the potential investment and ascertain that they have made an independent assessment of the appropriateness of such potential investment, based solely on their own intentions and ambitions. Investments in derivative and foreign exchange related transactions may be subject to significant fluctuations which may affect the value of an investment. Investments in Emerging Markets involve a higher element of risk. The value of the investment can greatly fluctuate and cannot be ensured. Investments in equity and debt instruments issued by banks could bear the risk of being subject to the bail-in mechanism (meaning that equity and debt instruments could be written down in order to ensure that most unsecured creditors of an institution bear appropriate losses) as foreseen in EU Directive 2014/59/EU. Nordea Asset Management has decided to bear the cost for research, i.e. such cost is covered by existing fee arrangements (Management-/Administration-Fee). Published and created by the Legal Entities adherent to Nordea Asset Management. The Legal Entities are licensed and supervised by the Financial Supervisory Authority in Sweden and Luxembourg respectively. A summary of investor rights is available in English through the following link: https://www.nordea.lu/documents/engagement-policy/EP_eng_INT. pdf/. The Legal Entities’ branches and subsidiaries are licensed as well as regulated by their local financial supervisory authority in their respective country of domiciliation. Source (unless otherwise stated): Nordea Investment Fund, S.A. Unless otherwise stated, all views expressed are those of the Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches and subsidiaries. This document may not be reproduced or circulated without prior permission. Reference to companies or other investments mentioned within this document should not be construed as a recommendation to the investor to buy or sell the same but is included for the purpose of illustration. The level of tax benefits and liabilities will depend on individual circumstances and may be subject to change in the future. © The Legal Entities adherent to Nordea Asset Management and any of the Legal Entities’ branches and/or subsidiaries.
