RI Annual Report 2023

ESG highlights


ESG highlights of the year

In 2023, we remained focused on reinforcing our ESG credentials and capabilities. We ramped up our engagement activities by adhering to new collaborative initiatives and starting new campaigns. We continued to push forward real-world decarbonisation with our Global Climate Engagement Strategy and by developing new tools to support our research.

Playing our part in real world decarbonisation Investors are increasingly recognising that climate change is a global crisis that threatens the environment, and with it the future of our society and economy. In this sense, the last few years have seen important steps towards adopting climate policies that have a positive impact, with a view to achieving net zero emissions targets by 2050. At Nordea Asset Management, we do not believe we can achieve net zero purely by avoidance and exclusion. Climate change has been a strategic focus for us since becoming a sig- natory to the UN-supported Principles for Responsible Invest- ment (PRI) in 2007. 2022 was a landmark year for us, with the launch of the Nordea Global Climate Engagement Strategy, and in 2023, we continued our decarbonisation efforts. Expanding our capabilities The challenges of ESG did not deter our Responsible Invest- ment team, and in 2023, we worked to expand and develop our ESG tools for three asset classes: covered bonds, government bonds and labelled bonds. Our new methodology to assess sustainability among covered bonds allows us to bridge a gap in our clients’ needs, covered bonds being NAM’s largest asset pool, but also in the industry, as the sustainability assessment of these instruments is still at its early stages. Our Responsible Investment Team has also worked on meth- odologies to assess the sustainability of government bonds and labelled bonds.

Beyond this, in 2023, we made extensive progress in develop- ing a Forward Decarbonization tool that provides our invest- ment boutiques with a forward-looking view of the potential decarbonisation trajectory of any company in our investment universe. The aim of the tool is to inform the portfolio man- ager’s decision on whether further engagement or allocation actions need to be taken to meet the decarbonisation objec- tives of the strategy. Maintaining our ESG credentials We have over 35 years of experience in sustainable investing, and our expertise does not go unnoticed. In 2023 we renewed the PRI bi-annual assessment, and we are proud that we received the highest possible score of 5 stars in the Policy, Governance and Strategy (PGS) module. We are also proud to share that Nordea Asset Management is ranked 2nd among European brands in Social Responsibility and Sustainability11 and our Fundamental Equities Team has been awarded the highest possible overall rating of AAA by Scope Analysis. Our Responsible Investment Team and ESG products also received numerous awards, further highlighting our dedication to sus- tainability in our solutions12.

11) Broadridge, Fund Brand 50 2023, March 2023. 12) For more information, please refer ESG Awards.

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