18 INSIDE NORDEA
Christophe Girondel is convinced that NAM can be a strong partner to distributors and advisers, offering them all the building blocks they need in light of the upcoming regulation.
change and the transition towards a low carbon so- ciety are very complex issues, seeking to reduce the carbon footprint of your investment is a step we all can take today. At NAM, we call it ‘returns with responsibility’. The upcoming changes to MiFID II are likely to increase the already complex requirements for advisers. For those needing help in navigating these challenges, what steps are you taking to support this journey? At NAM, it is important for us to not only talk the talk when it comes to ESG, but to walk the walk. We know how crucial it is going to be for ad- visers to get up to speed with the rapidly evolving ESG and sustainability space. Thus, we want to be there to help them on every step of the way. One initiative we recently rolled out was a free responsi- ble investing online learning tool, which provides a quick and easy introduction to the world of sustain- able investing. The training also utilises engaging videos, animations and case studies to make the learning experience more enjoyable. A personalised certificate is generated upon completion, which is recognised with CPD credits in several markets. In addition to assisting in education, it is also ex- tremely crucial for us at NAM to be open and trans- parent in our disclosures. For example, we recently included ESG metrics in the monthly factsheets across our ESG-aligned fund range. In addition to this, we revamped our monthly ESG Report, which contains all the metrics from the factsheet, and so much more. The report includes disclosures like ex- posure to CO 2 emissions and high-impact fossil fuel reserves, human rights violations and governance controversies. Last but not least, we also document the engagement activities of NAM’s Responsible Investments Team.
through the identification of sustainable corporate leaders. In addition, while our fixed income ESG STARS strategies are a more recent concept, the power of the ESG integrated approach within the bond universe is also being increasingly recognised by our clients. Could you tell us more about the ESG STARS con- cept in relation to fixed income – are there major differences from the equity strategies? As on the equity side, the portfolio managers of our fixed income ESG STARS funds work side-by- side with ESG experts from our award-winning Responsible Investments Team. The only difference is the desired outcome of our research. For our analysis of equities, we are seeking to identify competitive advantages resulting from higher ESG standards – these companies are more likely to be the winners of tomorrow. For fixed income, performing our ESG valuation for corporate and sovereign issuers helps to better assess the credit risk of the underlying investment. All issuers are given an internal ESG score, which represents our view on how well the company or sovereign entity is positioned in relation to ESG risks and opportunities.
What are the benefits of investing in an ESG STARS strategy for a retail client?
As an example, let’s take a look at the recent COP26 summit that has just taken place in Glasgow. Obviously, the most important item on the agenda was decarbonisation of our economy, the ‘net zero’ target. While people often feel they cannot make much of a difference in tackling such wide-ranging issues, by allocating to our ESG STARS strategies, your investments will have a significantly lower carbon footprint than the benchmark. While climate
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