Responsible Investment approach
18
Our Engagement Focus Strategies – Widening our horizons We truly believe that engagement can support companies transitioning to more sustainable business models. Three years ago, we have created a new fund family, focusing only on Engagement Strategies, comprising of two different ones: the Nordea Global Climate Transition Engagement Strategy 23 , which supports higher-emitting companies in crucial industries on their sustainable transition, and the Nordea Global Diver- sity Engagement Strategy, which guides diversity laggards to become tomorrow’s diversity leaders. Nordea 1 – Global Diversity Engagement Fund The Nordea 1 – Global Diversity Engagement Fund aims to capitalize on the growing awareness of Diversity and Inclusion (D&I) in society. Research consistently shows that companies with at least 30% women in executive leadership tend to out - perform financially, benefiting from stronger decision-making, innovation, and risk management 24 . This 30% threshold is widely recognized as the tipping point for meaningful impact and is the primary standard we apply to our fund. However, we also consider companies with at least 20% women in leader - ship if they demonstrate positive progress towards greater diversity. To assess companies' D&I status, we evaluate four key pillars: Leadership Diversity, Talent Pipeline, Inclusion, and Diversity Change. This assessment allows us to categorize companies from Leaders to Laggards based on their D&I profiles. Our investment strategy combines data-driven analysis with tradi- tional fundamental bottom-up analysis, focusing on both cur- rent D&I Leaders and promising companies open to improve- ment. Additionally, we actively engage with companies where opportunities arise to enhance their diversity efforts and unlock shareholder value. By maintaining a threshold of 30% minority gender in leadership positions and selecting top-performing companies in each segment, we offer investors an opportunity to participate in D&I-focused investing. This approach aims to capture the dual benefits of enhanced financial performance and positive societal impact
Nordea 1 – Global Climate Transition Engagement Fund 23 In 2022, Nordea launched the Global Climate Transition Engagement strategy, which targets companies in sectors often overlooked by the market due to their less favorable carbon emission profiles. Despite this, we recognize that these companies can play a pivotal role in the energy transition. Our team at NAM, identifies opportunities for real-world decarbon - ization through a structured engagement approach with these businesses. We believe that many of these companies simply need the right guidance and expertise to unlock their ecologi- cal potential, reveal their hidden value potential, and attract investments. As such, engaging on material environmental issues forms the core of our investment process and in 2024, we have conducted over 80 interactions with our portfolio companies. We have also developed a Forward Decarbonization Tool to assess companies' potential future greenhouse gas emissions trajectories, enhancing our systematic consideration of decar- bonization paths. This proprietary tool provides a forward- looking view of direct (scope 1) and indirect (scope 2) emis- sions. Our conviction in decarbonization and climate transition investing has strengthened, as we see growing interest and investments in this area. We are that our climate capabilities will continue to support our dual objective of generating share- holder value while contributing to a greener future. 25
23) With effect as of April 8th the sub-fund is renamed from " Nordea 1 – Global Climate Engagement Fund" to "Nordea 1 – Global Climate Transition Engagement Fund". 24) McKinsey & Company, “Diversity matters even more: The case for holistic impact” (2023), MSCI ESG, “Women on Boards and Beyond: 2024 Progress Report”. 25) There can be no warranty that an investment objective, targeted returns and results of an investment structure is achieved. The value of your investment can go up and down, and you could lose some or all of your invested money.
Made with FlippingBook. PDF to flipbook with ease