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Nykredit Realkredit Group

PRI reporting framework 2018

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You are in Indirect – Manager Selection, Appointment and Monitoring » Outputs and outcomes

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories

08.1. Describe how you ensure that best RI practice is applied to managing your assets

Measures

          We analyze and evaluate the portfolios on a quarterly basis and this form the fundation of the dialogue with the managers.
        

Measures

          If the manager does not perform according to our expectations the coorperation is terminated.
        

08.2. Additional information. [Optional]

The Nykredit policy and the obligations apply to all external managers. We expect the managers to have a strategy of their own but that this is within the boudaries of the Nykredit policy. Nykredit tries to innovate our own practices and expect our managers to improve as well.


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Breaches of human rights: Phillips 66 involvement in the Dakota Access Pipeline
        
Conducted by
Asset class
Scope and process

Cease the Phillips 66 involvement in the Dakota Access Pipeline.

External manager should engage with Phillips 66 to get the company's own view of the issue and engagement for a withdrawal from the project.

Nykredit would continue its own engagement with the company.

Outcomes

The manager showed good engagement efforts. Within a very short timeframe Phillips 66 responded in a very thorough way. It recognized the issues.

However Phillips 66 stayed on the project as part of the joint venture and helped the finishing stage, which breached the human rights of the Standing Rock Sioux and Cheyenne River Sioux tribes.

This happened even though the company recognized the issues. Thus Nykredit decided to exclude Phillips 66.

Because they were willing to disclose their views, Nykredit has continued to engage with Phillips 66 thorough our external service provider GES.

Topic or issue
          Infrastructure manager invested in fossil fuels
        
Conducted by
Asset class
Scope and process

Infrastructure managers was screened and analyzed as part of selection proces. The past investments was screened and the process was analyzed.

Outcomes

The manager was not chosen because of two vital elements:

1. The manager had the highest proportion of energy assets, mainly in oil and gas pipelines. Investing in the fund would increase the green transition risks and not be in line with the goals of the Nykredit policy.

2. The managers ESG-approach to these projects showed an inherent lack of understanding and thus valuation of ESG-issues, and was evaluated as not a good fit with the Nykredit approach. 

Topic or issue
          Venezuela
        
Conducted by
Asset class
Scope and process

Is investing in Venezuela corporate bonds in line with Nykredit policy on sovereign debt?

The manager and Nykredit would review their analysis of the country to asses the development and what could be expected in the short and medium term.

Outcomes

The manager decided to divest and the situation deteriorated. Nykredit decided in the fall to exclude Venezuela soveregin debt from our investments. By then the manager was no longer invested.

09.2. Additional information.


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