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Nykredit Realkredit Group

PRI reporting framework 2018

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Outputs and outcomes

LEA 11. Number of companies engaged with, intensity of engagement and effort

11.1. Indicate the amount of your listed equities portfolio with which your organisation engaged during the reporting year.

Number of companies engaged

(avoid double counting, see explanatory notes)

Proportion (to the nearest 5%)
Specify the basis on which this percentage is calculated

Individual / Internal staff engagements

7 Number of companies engaged
5 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Collaborative engagements

1
10 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

Service provider engagements

21
5 Proportion (to the nearest 5%)

Specify the basis on which this percentage is calculated

11.2. Indicate the proportion of engagements that involved multiple, substantive and detailed discussions or interactions with a company during the reporting year relating to ESG issue.

Type of engagement

% Comprehensive engagements

 

 

Individual / Internal staff engagements

 

 

Collaborative engagements

 

 

Service provider engagements

11.3. Indicate the percentage of your collaborative engagements for which you were a leading organisation during the reporting year.

Type of engagement

% Leading role

  Collaborative engagements

11.4. Indicate the percentage of your service provider engagements that you had some involvement in during the reporting year.

Type of engagement

% of engagements with some involvement
  Service provider engagements

11.5. Additional information. [Optional]

Nykredit aims to play a substantial part in any of our service provider engagements. This means that we decide goals and evaluate them, but it also means that we participate in meetings with the company and if it is opportune always meets with the company bilaterally.

The internal engagements noted here are engagements, which only internal staff have been involved in. These types of engagements are not retrospective trigged by norm breaches but rather proactive related to risk or action that could be problematic. Two of the engagements related to infrastructure investments, three to potential norms breaches and the last two was related to involvement in fossil fuel production.

All the service provider engagements are also collaborative in nature, as we engage with other investors and the discussions with these also plays an important role in the succes of the engagement.

The collaborative engagement is Climate Action 100+. Sadly Nykredit did not have the opportunity to be part of the initiation of the initiative, but Nykredit has taken the lead of one of the company engagements and participates in two other groups as well.

 


LEA 12. Engagement methods

12.1. Indicate which of the following your engagement involved.

12.2. Additional information. [Optional]

Participation in roadshows are done by our service provider.


LEA 13. Companies changing practices / behaviour following engagement

13.1. Indicate whether you track the number of cases during the reporting year in which a company changed its practices, or made a formal commitment to do so, following your organisation’s and/or your service provider's engagement activities.

Do you track number of companies that changed or made a formal commitment to change in the reporting year following your organisation’s and/or your service provider's engagement activities?

13.2. Indicate the number of companies that changed or made a formal commitment to change in the reporting year following your organisation’s and/or your service provider's engagement activities.

Number of companies
% of total portfolio

Individual / Internal staff engagements

4
1 % of total Portfolio

Collaborative engagements

0
0 % of total Portfolio

Service provider engagements

7
1 % of total Portfolio

13.3. Additional information [Optional].

We are one among many investors engaging with these companies. We do not claim to be the triggering factor in the change, but just one among many catalysing postive change. 


LEA 14. Examples of ESG engagements

14.1. Provide examples of the engagements that your organisation or your service provider carried out during the reporting year.

ESG factors
ESG issue
          Companies involved in Dakota Access Pipeline project should ensure compliance with human rights of the Standing Rock Sioux and Cheyenne River Sioux tribes.
        
Conducted by
Objectives

The companies behind the project, Energy Transfer Partners, Enbridge, Phillips66, Marathon Petroleum and Sunoco Logistics should ensure free prior content of all involved stakeholders in the project as part of the human rights/ OECD due diligence. 

Scope and Process

Several media reports and initial engagement reports showed that eventhough some of the companies recognized the issues, they did not intend to ensure free prior content from the tribes effected.

Contact directly and through different partners should ensure that the companies understand that we as investors find their actions and lack of due diligence/ respect for basic human rights unacceptabel.

Follow the work stream of the UN on this case to ensure that any insights and statements play a relevant role.

Outcomes

Some of the companies, Phillips66 and Enbridge, respondended very well to our initial engagement, but failed to act. As the UN critized the US authorities for failing to protect the human rights of the stakeholders of the project, Nykredit decided to exclude the companies from all investments.

ESG factors
ESG issue
          Collapse of the Fundau damm at the Brazilian Samarco Mine operated by BHP Billiton and Vale
        
Conducted by
Objectives

BHP Billiton needs to identify the cause(s) of the dam failure and assess the other dams within its operational control and/or ownership to prevent similar failures at Samarco and elsewhere in the future. They should also ensure that there is a system for the monitoring and maintenance of all dams within its operational control and/or ownership. Emergency procedures should be in place, which the local communities are made aware of and the necessary authorities have agreed to, should such an incident re-occur.   BHP Billiton need to develop, through consultation with the community and authorities, and together with Samarco Mineracao and Vale, a long-term strategy for the reconstruction or resettlement of the affected community. They need to develop a long-term strategy for the environmental remediation of the river and affected land.

Scope and Process

The company should recognize the violation. Be willing to communicate. Conduct a responsible course of action to remediate affected and understand the reason for the accident. And change designs and procedure to avoid future accidents.

Outcomes

The violation has ceased. The company has assisted in a number of environmental and socio-economic remedial programmes to alleviate the immediate and medium-term impacts such as the temporary relocation of affected communities, the construction of temporary dams to prevent further settlement release and the provision of drinking water to those communities that temporarily lost access to potable water.


The company has adopted a responsible course of action. The company signed an agreement with state and federal authorities agreeing 41 socio-economic and environmental remedial programmes which are being managed by the Renova foundation. 

GES is currently awaiting the first resettlement construction works to begin, which is dependent upon receiving the necessary permits from a number of authorities.

The company has taken a proactive and precautionary approach to improve routines and prevent future violations.

ESG factors
ESG issue
          Ensure Wal-Mart recognizes rights described by ILO Convention
        
Conducted by
Objectives

Walmart should cease and mitigate non-compliance in areas related to labour rights and strengthen its policies and guidelines on these issues.

Scope and Process

The company should recognize the issue. Be willing to communicate. Conduct a responsible course of action that could lead to improvements of working condition. And change procedures to recognize labour rights and be fully compliant with ILO.

Outcomes

The company has adopted a responsible course of action. Walmart has acknowledged its responsibility for the social impacts associated with its operations and has taken concrete measures to strengthen its approach to discrimination, working conditions in its stores and labour risks in the supply chain, among other things.

Walmart is now willing to adress the perceived gaps in between their procedures and the ILO convention.

ESG factors
ESG issue
          Rio Tinto should live op to its goals for responsible mining
        
Conducted by
Objectives

Rio Tinto should change its business conduct to cease violation of a number of the Global Compact principles.

Scope and Process

The company should recognize the violations. Be willing to communicate. Conduct a responsible course of action to stop the violations, remediate and understand the reasons for the violations. And change procedures to avoid future incidents.

Outcomes

The company has for a number of years had ambitious goals for its responsible business practise in place. It has recognized the issues and worked to handle them and remediate were necessary. The company has improved procedures and are now restructuring their business, which include selling some of their most controversial activities. We are optimistic that some of the remaining issues will be handeled as well. 

ESG factors
ESG issue
          VW: Environmental impact caused by defeat device
        
Conducted by
Objectives

VW should ensure that it has adequate risk management systems and internal controls and that the Supervisory Board has sufficient oversight, independence and skills in order to prevent future violations. Furthermore, VW should demonstrate that it has improved its corporate culture.

Scope and Process

The company should recognize the violations. Be willing to communicate. Conduct a responsible course of action to stop the violations, remediate and understand the reasons for the violations. And change procedures to avoid future incidents.

Outcomes

While the company has recognized the issue and communicated, there still looms the question if it is complete. Remediation and settlements have been achieved. A new strategy has been launched to focus on EV's. The question whether the governance issues behind the incident has been or will be solved is still unanswered.

14.2. Additional information. [Optional]


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