Active Ownership
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Thematic engagement focus areas
Climate NAM works on an ongoing basis to assess climate change risks and the impact of the low-carbon transition on sectors and companies. Climate change presents a challenge to our investments – in terms of its physical impact as well as through the prospect of radical policy measures and changing consumer behavior which aims to reduce GHG emissions globally. A key driver for ensuring the climate resilience of investee companies is the increasing alignment of companies to net zero pathways. which is why our 2025 target is for 80% of our top 200 carbon footprint contributors be on a Paris-aligned trajectory or else subject to engagement. Collectively, the top 200 list is responsible for an estimated 79% of our equity and corporate bond financed emissions.29 To assess the Paris alignment profile of individual companies we follow criteria established by the Institutional Investors Group on Climate Change’s (IIGCC) Net Zero Investment Framework. Each company falls into one of four alignment categories: aligned, aligning, committed to aligning or not aligned, based on six evaluation criteria: GHG emissions disclosure, net-zero ambition, credible GHG reduction targets, progress against targets, a supportive climate strategy and aligned capital expenditures. As of end 2023 81% of top 200 companies where aligned or subjective to active engagement to become aligned. This milestone was met through the following key actions: • Individual dialogues with companies in which we stated and discussed our expectations of Paris alignment • Engagements via collaborative initiatives (CA100+, IIGCC Net Zero Engagement Initiative, CDP non-disclosure campaign) • A letter addressed to select company CEOs outlining the six alignment criteria and highlighting our expectation, as well as the expectation of the growing number of net-zero committed asset managers, of an increase in alignment maturity if the company is to remain investable in the medium to long term
Some of our Climate engagement initiatives
Elin Noring (Active Ownership) and Till Jorde (ESG Product and Research) at the facilities of Swedish-company Hybrit. This was part of a greater mining and steel-themed tour to meet holding-companies in Northern Sweden and Finland.
Reference to companies or other investments mentioned should not be construed as a recommendation to the investor to buy or sell the same but is included for the purpose of illustration.
29) Data as of 31.12.2023.
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