Active Ownership
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Biodiversity As the largest asset manager in the Nordics, we acknowledge our role in preventing biodiversity loss and channeling capital flows towards nature-positive solutions. We have been actively working with our portfolio companies to address biodiversity risks and seizing opportunities ever since signing the UN Principles for Responsible Investment in 2007. 2023 marked a milestone in our activities related to biodiversity preservation. We published our Biodiversity Report, which acts as a position statement on the matter and allows us to highlight biodiversity-related activities. During 2023, 13% of our total engagements were on biodiversity related topics. To strengthen our voice as an active owner, we take part in numerous investor initiatives related to biodiversity. The Investors Policy Dialogue on Deforestation (IPDD) is a good example: We are a founding and management committee member of this collaborative investor initiative, backed by the Tropical Forest Alliance and 78 investors, and set up in July 2020 to engage with government officials, public agencies and industry associations in selected countries with critically important forests and native vegetation, on the issue of deforestation. The objective of the IPDD initiative is to ensure long-term financial sustainability of investments by promoting sustainable land use and forest management and respect for human rights. Currently, we are members of both the Brazil and Indonesia working streams. During 2023, we took part in a field trip to Brazil together with an IPDD members delegation to meet with companies and policymakers to discuss Brazil’s anti-deforestation agenda. In November 2023 Brazil issued its first sustainable sovereign bond under Brazil’s Sovereign Sustainable Bond Framework, including actions and projects associated with environmental or social issues. Other collectives include the Finance for Biodiversity Pledge, the Tropical Forest Alliance and Nature Action 100.
Some of our Biodiversity engagement Initiatives: Some of our Biodiversity engagement initiatives
Good Governance In our good governance focused active ownership activities, we aim to safeguard shareholder value and sound management of ESG risks and other risk types in portfolio companies, in order to protect shareholder value and with the aim to enhance long-term returns. We believe a sound corporate governance structure is essential for creating long-term shareholder value. As stated in our RI Policy, we expect companies affected by these governance-related risks to ensure that they report on how they manage the risks and impacts adequately: • Corruption: We expect companies to take a proactive approach towards corruption and responsible payments and ensure that adequate measures are implemented, and transparency is being elevated • Diversity: We expect a board to include a strong presence of independent and diverse non-executive members • Tax: We expect our portfolio companies to have a tax policy that outlines the company’s approach to taxation and how it aligns with the overall business strategy. We also expect companies to have a robust tax governance and management framework in place, to pay taxes where economic value is created and to provide country-by-country reporting NAM has been taking action towards encouraging our investee companies to commit to responsible tax practices for several years and in 2023 has shown good progress on the topic. Corporate tax avoidance activities may suggest underlying legal, operational, reputational, financial and/or governance risks. In 2023, we were part of a collaborative engagement coordinated by Danish engagement firm Engagement International targeting 15 global companies in IT/Tech, Extractives and BioTech with high exposure to tax risk. The objective is to encourage these companies to manage their corporate tax issues in a responsible way, aligned with international guidelines and best practices. In 2022 we co-filed a shareholder proposal at Microsoft’s 2022 AGM, asking for improved transparency and country-by- country reporting on tax. In 2023 we co-filed again at Microsoft and did the same for better tax transparency and country- by-country reporting at the AGMs of ExxonMobil and Chevron.
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