Responsible Investment strategies at NAM
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Responsible Investment strategies at NAM
NAM’s Responsible Investment flagship solutions include both our ESG STARS family and our ESG Thematic range. The ESG STARS strategies are about positive selection of quality companies with well managed ESG profiles that generate long-term financial value, while the ESG Thematic strategies offer investors a focus on specific aspects of sustainability.
Integrating ESG issues forms part of our fiduciary duty to cli- ents and as such, all of our funds are subject to baseline ESG criteria via corporate-level overlays, to avoid companies that do not meet Nordea’s sustainability standards. Today we have around 230 funds that have additional ESG fil- ters and policies that go beyond our corporate overlays. These funds are classified as either Article 8 or 9 as per European Sus- tainable Finance Disclosure Regulation (SFDR), and since they all consider PAI elements within their investment processes, all of NAM’s Article 8 and 9 funds will be eligible under MiFID II regulation to be offered to clients with sustainability preferences. Going a step further, we have special ESG flagship strategies in the ESG STARS family and our ESG Thematic range. The ESG STARS funds follow an approach of full ESG integration and positive selection, while the ESG Thematic strategies seek solutions to specific sustainability challenges. Our credentials extend to international ESG-labels such as LuxFLAG ESG label 24 , Label ISR 25 and the Towards Sustainability label 26 . ESG STARS strategies – Tomorrow’s winners Our ESG STARS range is built on the belief that companies and issuers that integrate both ESG and financial metrics into their strategic decisions will be tomorrow’s winners. In these strate- gies, we aim to beat the benchmark through investing in com- panies or bonds that meet NAM’s ESG standards 27 . Every investment in our ESG STARS strategies is examined through an ESG lens as well as on financial grounds. Our ESG analysts work closely with the investment teams to identify material sustainability risks and opportunities relating to the companies’ medium- to long-term operational performance and market positioning, and the results of their analysis feed into proprietary ESG models that are integrated into the invest- ment process.
ment boutiques operate in close collaboration to engage in productive dialogues with many of our ESG STARS holdings. Additionally, the ESG STARS range covers a wide scope of regions and asset classes. In 2021, we’ve extended the ESG STARS range with the North American High Yield Stars Bond and the US Corporate Stars Bond strategies. ESG Thematic strategies – Building a better future In addition to our ESG STARS family, we also offer investors strategies that focus on specific sustainability themes and align with the UN’s Sustainable Development Goals (SDGs). The Global Climate and Environment Strategy has been at the forefront of climate investing since 2008. The strategy seeks companies which use their talent and innovation to identify solutions to climate and environmental challenges, addressing topics such as resource efficiency, environmental protection and alternative energy solutions. NAM’s Global Gender Diversity Strategy builds on our belief that gender diversity is not only key for an equal society but often goes hand in hand with other drivers of business success. Nordea’s Global Social Empowerment Strategy targets the “S” in ESG. The ongoing health crisis and social inequality dem- onstrations are a strong reminder of the opportunities within the social pillar of ESG, which can be supported by investing in businesses that offer social solutions. In 2021, Nordea’s ESG Thematic range was enhanced with two new strategies. Building on the expertise of team behind our successful Global Climate and Environment Strategy, our new Global Climate and Social Impact Strategy aims to provide meaningful solutions to meet pressing social and environ- mental needs. By addressing the interconnection between environmental and social challenges, investors in the strategy can be active players of the transition towards an inclusive green economy. The Global Green Bond Strategy, the first fixed income strategy within our ESG Thematic universe, was
Active ownership and engagement are an important part of the ESG STARS’ investment approach. Our RI team and invest-
24) LuxFLAG is an international and independent non-profit association and labelling agency. To promote sustainable investing in the financial industry, LuxFLAG awards an independent and transparent label to eligible investment vehicles in Microfinance, Environment, ESG (Environment, Social, Governance), Climate Finance and Green Bonds. The objective is to reassure investors that the labelled investment vehicle invests in a responsible manner. The LuxFLAG ESG Label is valid for one year. Investors must not rely on LuxFLAG or the LuxFLAG Label with regard to investor protection issues and LuxFLAG cannot incur any liability related to financial performance or default. 25) Label ISR is created and supported by the French Finance Ministry. The label’s goal is to increase the visibility of SRI products among savers in France and Europe. For more information on the Label ISR, visit https://www.lelabelisr.fr/en/what-sri-label/. 26) We have received recognition from the Belgian Central Labelling Agency in the form of “Towards Sustainability” label. The label was launched in 2019 and it aims to install trust and reas- sure potential investors that the financial product is managed with sustainability in mind and is not exposed to very unsustainable practices, without requiring of investors to do a detailed analysis themselves. For more information on the “Towards Sustainability” label, visit www.towardssustainability.be. 27) The performance represented is historical; past performance is not a reliable indicator of future results and investors may not recover the full amount invested. The value of your investment can go up and down, and you could lose some or all of your invested money.
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