Since 2006, the UN-PRI has published an annual, international report assessing the work, processes and integration of ESG in investments. The annual report shows a general improvement to Danske Bank, and the bank is ranked as A or A+ in seven of twelve areas regarding ESG integration.
For example, Danske Bank has improved in the category 'active ownership':
"We are particularly proud of having improved in this area, as sustainable investment is about taking responsibility. It is more responsible to address material ESG matters as investors, rather than refraining from investing when issues of concern arise, leaving the problem to someone else to solve. We engage with companies through dialogue, we vote at their annual general meetings, and we participate in joint investor initiatives to e.g. encourage companies to take action on climate change." says Atilla Olesen, Head of Danske Bank Asset Management.
Atilla Olesen, Head of Danske Bank Asset Management.
Increased voting at general meetings
Danske Bank’s approach to active ownership has been strengthened by, among other things, developing Voting Guidelines, strengthening of voting scope and increased Active Ownership disclosure. This has made it possible for us to exercise our voting rights with companies in passively managed funds. In this way, we have a better chance of contributing to companies becoming even better at thinking in long-term value creation for the benefit of investors and society.
"ESG Integration is about addressing Environmental, Social and Governance factors alongside financial factors in the investment process. Our approach to ESG integration focuses on materiality and strong processes, which requires a well-developed foundation of data, tools and expertise to capture value. I believe that this is one of the reasons why we are seeing progress in so many areas this year. This is also evident in an internal survey, which shows that 96 percent of our managers integrate ESG factors into their investment processes," he explains.
Stronger manager selection framework
Another area that has been strengthened is the so-called manager selection:
"The processes and frameworks for monitoring our external managers’ ESG Integration, Active Ownership as well as ESG Disclosure & Reporting have been strengthened. This is important for Danske Bank and Danske Invest, but particularly important for Danica, who employ external managers. This work is also important to be able to discuss gaps in our managers’ approaches and promote the development of sustainable investments" says Atilla Olesen.
UNPRI report is based on six principles, which reads as follows:
- Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
- Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
- Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
- Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
- Principle 6: We will each report on our activities and progress towards implementing the Principles.