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Nykredit Realkredit Group

PRI reporting framework 2018

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Outputs and outcomes

LEI 12. How ESG incorporation has influenced portfolio composition

12.1. Indicate how your ESG incorporation strategies have influenced the composition of your portfolio(s) or investment universe.

Describe any reduction in your starting investment universe or other effects.

The two negatively screened listed SRI-funds exclude producers and distributors of alcohol, tobacco, weapons, pornography and gambling as well as companies that breach international norms. One also excludes producers, distrubtors and servicing companies og fossil fuels. Utilities with more than 50% of energy input deriving from coal is also excluded. These exclude up to 20%.

Specify the percentage reduction (+/- 5%)

5 %

Select which of these effects followed your ESG integration:

Describe the influence on composition or other effects

The portfolio has a distinct overweight in higher ranked companies and a lower carbon footprint than both the ESG benchmark and the traditional benchmarks.

12.2. Additional information.[Optional]


LEI 13. Measurement of financial and ESG outcomes of ESG incorporation

13.1. Indicate whether your organisation measures how your approach to responsible investment in Listed Equity has affected your portfolio’s financial and/or ESG performance.

a) Funds’ reputation

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' reputation

Which strategies were analysed?

b) Funds’ financial performance: return

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' financial performance: return

c) Funds’ financial performance: risk

Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' financial performance: risk
Describe the impact on:
Describe the impact
Which strategies were analysed?
Funds' ESG performance

13.2. Describe how you are able to determine these outcomes.

Nykredit tracks the performance relative to benchmarks. If Nykredit decides to screen out a company or sector we track the development of these. We also try to deconstruct the different companies contribution to return in the portfolio. The causality behind this needs to be questioned every time.

One example of risk reduction is the Equifax scandal, which we had no active exposure to beceause of our ESG-approach.


LEI 14. Examples of ESG issues that affected your investment view / performance

14.1. Provide examples of ESG issues that affected your investment view and/or performance during the reporting year.

ESG issue and explanation

Privacy and data security

Impact on investment decision or performance

Equifax was not in any actively managed funds, when the breach occured. This effected the performance positively.

ESG issue and explanation

Breaches of human rights by Phillips 66, Dakota Access Pipeline

Impact on investment decision or performance

Because of the controversy and eventual exclusion Nykredit had no exposure to the company in our actively managed funds all of 2017 and from March 2017 in no funds at all. The has had a neutral effect on the portfolios. Because of the increase in the US-oilproduction the company has done well, but the equity market in general has done equally well.

ESG issue and explanation

Tobacco producers

Our actively managed funds has no exposure to tobacco production. Some have a negative screening and some have decided not to invest from an ESG approach.

Impact on investment decision or performance

Eventhough tobacco producers have done extrodinarily well historically the performance has changed. The past 5 years the performance has been neutral and last year performance was helped by not investing in tobacco producers.

 

14.2. Additional information.[Optional]


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