We integrate ESG matters into the investment process as factors alongside financial factors. Based on external ESG data and information, and internal expertise and advice, we assess portfolio companies’ ESG performance, identify risks and opportunities, and engage through dialogue on material matters to support business growth and good governance and standards of conduct.
We believe that fund-manager-driven dialogue with portfolio companies is the most effective as the investment teams are the experts of their respective strategies and portfolios, and tasked with the buy/sell decision. Our investment teams engage on a regular basis with portfolio companies on material ESG matters to understand their risks and opportunities, and to support their growth and development. We log and monitor company dialogue and progress to ensure a structured engagement process.
The annual general meeting is an opportunity to voice our opinion, vote on issues of key importance to the running of a company, and contribute to the good governance of the company. We exercise our right to vote at annual general meetings of Nordic and European companies where we represent relevant holdings. Unless required by special circumstances, holdings in passively managed funds are not subject to voting activities. We vote either by ourselves or through a service provider. We log and publish our voting records.
When appropriate, we collaborate with peers, like-minded investors and other relevant parties to exercise active ownership, engage through joint dialogue, and contribute to a positive impact. We also participate in investor initiatives to encourage increased transparency and sustainability standards in companies and financial markets, such as e.g. the Carbon Disclosure Project, Institutional Investors Group on Climate Change, Paris Pledge for Action, The Task Force on Climate-Change Financial Disclosure, and the UNsupported Principles for Responsible Investment.
We screen our investment universe to identify ESG risks related to portfolio companies with reference to industry best practice, international norms and voluntary frameworks for corporate responsibility. Based on our assessment and company dialogue, we may from time to time decide to divest or restrict investments in a company, in a specific investment strategy or across multiple strategies.
We screen portfolios and funds that are set up with restrictive criteria or thresholds relating to certain sectors, products, or companies in order to meet customer needs.
We apply overall investment restrictions across the investment universe based on Danske Bank Group sustainability positions on Climate Change and Arms & Defence. This covers certain companies according to their involvement in thermal coal and tar sands, and weapons prohibited by international law or deemed controversial due to its indiscriminate effects or disproportionate harm they cause.
The investment restrictions of the SII policy do not apply to structured products, derivatives, Danske Bank’s capital market activities (including but not limited to market making, securities trading etc.) or externally managed funds.