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Nordic pension funds team up on ESG

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  • Nordic pension funds team up on ESG

SCANDINAVIA - Three pension companies from Finland, Norway and Sweden have joined together as the Nordic Engagement Cooperation (NEC) to coordinate engagement activities with companies on environmental, social and governance (ESG) issues.

Ilmarinen from Finland, Folksam from Sweden and Kommunal Landspensjonskasse (KLP) from Norway, have formed the group, which will be based on a systematic screening of around 4,500 companies.

The screening and analysis will be performed by GES Investment Services, where it will identify and examine possible violations of international conventions and guidelines on ESG issues, which in turn will lead to around 20 companies being selected for further analysis.

The process will then aim to screen out between 10-12 companies which the NEC can enter into active dialogue with, although GES will assist the NEC on the company dialogue, analysis, advice and co-ordination of the organisation's activities.

Any decision to exclude a particular company from the investment portfolio will then be made by each individual pension fund, rather than as a group.

The NEC now has representatives from Norway, Sweden and Finland and is actively seeking a Danish partner to help complete the Nordic group, although the body is also open to offers from international investors which might want to liaise with the group on responsible investment issues.

Anna Hyrske, senior adviser on corporate social responsibility at Ilmarinen, said: "I am thrilled at this opportunity for true Nordic cooperation. Through NEC we can pool our resources and therefore achieve significantly more in our joint engagement efforts compared to our individual engagement."

Jeanett Bergan, head of responsible investments at KLP, added: "Investors concerned with responsible business practice all have the same goal. We want sustainable and responsible investment opportunities. In Norway KLP s actively engaged in a project called 'sustainable value creation' and we are hopeful that NEC can be a platform for the project's expansion to other Nordic countries."

Pressure applied earlier this month by the Ethical Council of the Swedish AP pension funds and other Nordic institutional investors, such as KLP, resulted in the pension funds reinstating Sodexo to their investment portfolios.  (See earlier IPE article: Pension pressure improves human rights at Sodexo)

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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