Responsible investments

Nordic Equities Kapitalförvaltning operates in its daily activities in such a way that the trust in the fund company’s operations is maintained and that the business is sound. The fund company strives to conduct its operations in an ethical manner characterized by good business practices, morality, consistent behavior, ethics, confidentiality, and fair treatment of the interests of fund unit holders.

A sustainable investment process

Responsible investments have been a core part of the investment policy for 20 years, as the interests of the fund unit holders are prioritized. The selection of investments is mainly made from well-known companies. The news flow from the companies is abundant, which facilitates transparency in the companies. The company closely monitors the companies to be ready to act when necessary. The company actively excludes companies that do not align with the company’s investment direction, which is based on the UN Global Compact, UNPRI, and OECD guidelines for multinational companies, which among other things address UN conventions and international norms. Nordic Equities are proud supporters of the Paris Agreement. The fund company has a responsibility towards its unit holders and believes that sustainable investments should be beneficial in the long term. We do not believe that investing sustainably means compromising returns. Companies that focus on sustainability issues are encouraged as it is important both from a social responsibility perspective and an investment perspective.

In 2015, the UN established an agenda for 2030, consisting of 17 global goals for sustainable development. Nordic Equities strives to find companies that contribute to promoting one or more of these goals. In the selection process of new companies, the 17 goals are used as a template to find sustainable future companies that contribute to a better society. For example, we have chosen healthcare companies that contribute to good health, construction companies that build sustainable properties, companies that purify water, companies that produce renewable energy, and companies that contribute to sustainable industry through new innovations. Many companies and investors primarily focus on environmental issues, which are naturally of great importance; however, we believe it is important not to forget all areas within ESG (Environment, Social, Governance). Therefore, we also look at the management conditions of the companies, how they view equality, corruption, and the work environment.

Sustainability-related disclosures

The information below is presented in accordance with EU Regulation 2019/2088, Regulation on sustainability-related disclosures in the financial sector (SFDR).

Ethics and Moral Responsibility

We believe that we have a moral responsibility as investors and co-owners of our companies, as well as a responsibility towards our customers. Issues that are important to us include threats to human rights, corruption, and sustainability. To contribute to a better society, we exclude companies whose main activities fall within the following areas:

Negative and Positive Screening

We exclude companies whose main activities involve weapons, pornography, alcohol, tobacco, commercial gambling, fossil fuels, and coal. We favor companies whose main activities contribute to a renewable and better society. Companies that work with renewable energy and efficient solutions within ESG factors are considered winners and therefore attractive investments.

Annually, a letter is sent to all portfolio companies where Nordic Equities presents its stance on sustainability issues and points out any controversies the company has been involved in during the year. There is also regular dialogue with the management of the portfolio companies regarding the company’s sustainability efforts.

Commitments
• Signatories of UNPRI, the UN’s Principles for Responsible Investment, since January 2016.
• Members of Swesif, Sweden’s Sustainable Investment Forum.

Resources

Nordic Equities’ portfolios are screened twice a year in collaboration with Sustainalytics. This is a so-called norm-based screening based on an analysis model that assumes companies have a responsibility to adhere to international norms. Sustainalytics’ Global Ethical Standard Screening covers the UN Global Compact’s ten principles within the four norms: Human Rights, Labour Rights, Environment, and Corruption. The process is based on daily media monitoring based on specific international conventions and guidelines such as the UN Global Compact, OECD Guidelines for Multinational Enterprises, human rights conventions, labour rights conventions, environmental conventions, and weapons-related conventions. Sustainalytics identifies any incidents at companies, known as violations, which are communicated through regular alerts via email. This is followed by an analysis focusing on what happened, whether the company is responsible for the incident, what the company is doing to address the incident, and the consequences and potential actions.

The internal company analyses conducted at Nordic Equities always take sustainability aspects into account, as reported in the analysis documentation. The company’s investment committee regularly discusses sustainability issues, and the documentation is crucial for investment decisions.

Nordic Equities are members of Swesif, a network forum for sustainable investments.