ESG Focus Areas
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Policy Support PCAF – Partnership for Carbon Accounting Financials We have been actively involved with the Partnership for Car- bon Accounting Financials (PCAF) since 2020, contributing to advancements in sustainable finance. In 2024, our ESG Method- ology Lead, Kenn Urhøj, joined PCAF’s working group on securi- tized and structured products, supporting the harmonization of GHG emissions measurement approaches. A significant devel- opment in 2025 was the adoption of the PCAF methodology for financed emissions from structured products and covered bonds. Having contributed to the development of this method- ology, we have now incorporated related disclosures into our engagement efforts. In parallel, our Responsible Investment team has developed a methodology for covered bonds aligned with the Net Zero Asset Managers initiative, which is being implemented from 2025. We also continue to engage with the Covered Bond Council on industry disclosures in Europe and participate in their annual congress. Covered Bond Engagement Campaign Since 2022, we have engaged with issuers of covered bonds to incentivize improved disclosure of environmental metrics, including energy performance certificates (EPC), energy use (kWh/m 2 ), and greenhouse gas emissions (tCO 2 e/m 2 ). By the end of 2025, we had engaged with a total of 70 issuers, includ- ing 17 new engagements during the year. While only limited progress has been observed in terms of increased ESG disclo- sures, this largely reflects the insufficient availability of underly- ing data among issuers. We remain committed to continuing these engagements to reinforce the importance of data avail- ability and ESG integration in covered bonds. The information collected supports our measurement of sustainability levels in funds containing covered bonds and is also used in ESG assess- ments of issuers for security selection.
Outlook As we look ahead to the coming year, we recognize that we manage client assets against a backdrop of unprec- edented geopolitical uncertainty and shifting market dynamics. In times of uncertainty, both clients and busi- nesses naturally adjust their short-term priorities. Despite these adjustments, climate change remains a physical reality, and the transition to a low-carbon economy contin- ues to represent a significant structural shift in the global economy. This transition is driven by technological innova- tion, changing consumer preferences, resource efficiency imperatives, and energy security considerations – funda- mental drivers that will continue to propel the low-carbon transition forward, even during periods of policy uncer- tainty. We continue to view unmitigated climate change as a significant investment risk and remain dedicated to supporting global efforts to limit warming in line with the Paris Agreement.
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