We aim to identify long-term investment opportunities and reduce our exposure to unacceptable risks. We assess how companies impact on the environment and society and see opportunities in companies that enable more environmentally friendly economic activity. There are also companies we choose not to invest in for sustainability or ethical reasons.
We monitor our investments and assess sustainability issues as part of our risk management and our investment decisions. We encourage companies to move from words to numbers, so that we can evaluate their efforts and better understand financial risks and opportunities. To perform analyses of this kind, we need governance and sustainability data.
We support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) set up by the G20’s Financial Stability Board. We are working with companies to ensure that they are equipped for the transition to a low-carbon economy. We invest specially in climate mandates, adjust the portfolio through divestments, and consider climate issues in our investment decisions. We also analyse green-house gas emissions from companies in our portfolio and various climate scenarios for the fund.
Our goal is to use sustainability data to identify long-term investment opportunities. We see opportunities in investing in companies with solutions that enable more environmentally friendly economic activity. These investments can have positive effects on other companies in the portfolio. These positive externalities can include reduced pollution, lower energy costs and more efficient use of resources. Companies producing such technologies may profit in turn from changes in demand and regulation. We invest in such companies through among others dedicated environment-related mandates.
Divestment of companies
Given our understanding of sustainable economic growth, there are also sectors and companies where the fund should not be invested. By not investing in such companies, we reduce the fund’s exposure to unacceptable risks.
The Ministry of Finance has established ethically motivated guidelines for observation and exclusion of companies from the fund. The fund must not be invested in companies that produce certain types of weapons, base their operations on coal, or produce tobacco. The fund must also not be invested in companies that through their conduct contribute to violations of fundamental ethical norms. The Ministry of Finance has established an independent Council on Ethics to make ethical assessments of companies. Finally, the fund itself may decide to divest from companies that impose substantial costs on other companies and society as a whole, and so are not considered long-term sustainable.
Last saved: 11/06/2019