This report shows public data only. Is this your organisation? If so, login here to view your full report.

Nykredit Realkredit Group

PRI reporting framework 2018

Export Public Responses
Pdf-img

You are in Direct - Listed Equity Active Ownership » Engagement

Engagement

Overview

LEA 01. Description of approach to engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate whether your organisation has a formal engagement policy.

01.2. Attach or provide a URL to your engagement policy.

01.3. Indicate what your engagement policy covers:

01.4. Provide a brief overview of your organization’s approach to engagement

In 2017 Nykredit has decided to integrate the different sub policies into the overarching policy on sustaianable investements. The engagement policy adresses why we engage; how we engage and how we reach conlusions.

The decision to engage is made by the Nykredit Forum on Sustainable Investments. This Forum also decides the goals and evaluations. Progress on engagements are evaluated anually. If no progress is made and this situation is not expected to change the company will be excluded. Exclusions are reevaluated every two years.

Nykredit always engages for change. In 2017 Nykredit evolved its engagement approach, which has focussed on individual companies so far. In December 2017 Nykredit decided to join Climate Action 100+. The iniative is a good supplement tailormade to the green transition issue, as many of the companies need to take action, but are not necessarily breaching any norms.

01.6. Additional information [optional]


LEA 02. Reasoning for interaction on ESG issues

02.1. Indicate the method of engagement, giving reasons for the interaction.

Type of engagement

Reason for interaction

Individual/Internal staff engagements
Collaborative engagements
Service provider engagements

02.2. Additional information. [Optional]

The internal staff are also involved in the active ownership and at times the active ownership takes almost form of an engagement, but without any breach being identified.


Process

Process for engagements run internally

LEA 03. Process for identifying and prioritising engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

03.1. Indicate whether your organisation has a formal process for identifying and prioritising engagement activities carried out by internal staff.

03.2. Describe the criteria used to identify and prioritise engagement activities carried out by internal staff.

03.3. Additional information. [Optional]


LEA 04. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

04.1. Indicate if you define specific objectives for your engagement activities.

04.2. Indicate if you monitor the actions that companies take during and following your engagements activities carried out by internal staff.

04.3. Indicate if you do any of the following to monitor and evaluate the progress of your engagement activities carried out by internal staff.

04.4. Additional information. [Optional]

The milestones are defined together with our service provider as well as the evaluation. Any decision is made by the Nykredit Forum on Sustainable Investments. 


Process for engagements conducted via collaborations

LEA 05. Process for identifying and prioritising collaborative engagement

New selection options have been added to this indicator. Please review your prefilled responses carefully.

05.1. Indicate whether your organisation has a formal process for identifying and prioritising collaborative engagements

05.2. Describe the criteria used to identify and prioritise collaborative engagements.

05.3. Additional information [Optional]

Nykredit has just joined Climate Action 100+, which is a were positive new engagement initiative.


LEA 06. Objectives for engagement activities

New selection options have been added to this indicator. Please review your prefilled responses carefully.

06.1. Indicate if you define specific objectives for your engagement activities carried out collaboratively.

06.2. Indicate if you monitor the actions companies take during and following your collaborative engagements.

06.3. Indicate if you do any of the following to monitor and evaluate the progress of your collaborative engagement activities.

06.4. Additional information. [Optional]

Most collaborative engagements are conducted together with an engagement provider. A few more informal focused more on ESG and less on breaches of norms alone are conducted without a service provider.


Process for engagements conducted with/on your behalf by service providers

LEA 07. Role in engagement process

New selection options have been added to this indicator. Please review your prefilled responses carefully.

07.1. Indicate if you play a role in the engagement process that your service provider conducts on your behalf.

07.2. Indicate the role(s) you play in engagements that your service provider conducts on your behalf.

07.3. Additional information. [Optional]

Nykredit initiates the engagements; specifies the objectives and concludes. More and more we participate directly in meetings with the companies so the contact is not only through our service provider. In our experience this adds to the success rate of the engagements via supporting the credibility of the engagement partner, but it also adds important insights about the company that can beshared internally to improve our investment process.


LEA 08. Monitor / discuss service provider information

08.1. Do you monitor and review the outcomes of the engagement activities undertaken by your service providers on your behalf?

Please select all that apply

08.2. Additional information. [Optional]

The review proces is part of our procedure to evaluate the progress. The mutal funds also reports on the engagements done in the fund in the annual report.


General processes for all three groups of engagers

LEA 09. Share insights from engagements with internal/external managers

09.1. Indicate if insights gained from your engagements are shared with your internal or external investment managers.

Type of engagement

Insights shared

Individual/Internal staff engagements

Collaborative engagements

Service provider engagements

09.2. Additional information. [Optional]

All information on the background for engagements and not least progress are shared with portfolio managers. Portfolio managers have access to information including the documents put forward as part of the committee review.


LEA 10. Tracking number of engagements

10.1. Indicate if you track the number of your engagement activities.

Type of engagement
Tracking engagements

Individual / Internal staff engagements

Collaborative engagements

Service provider engagements

10.2. Additional information. [OPTIONAL]

The Forum on sustainable investments receives information on the engagements each quarter.


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]


Top