DNB Asset Management: Sustainable and
responsible investments - (SRI) process
General information
DNB Asset Management exercises special care with respect to
transactions and acts which represent a risk of involvement in
• unethical conduct,
• infringement of human or labour rights,
• corruption
• harm to the environment.
UN Global Compact is a strategic policy initiative for businesses that
are committed to aligning their operations and strategies with ten
universally accepted principles in the areas of human rights, labour,
environment and anti-corruption.
Our ethical investment guidelines also states that DNB will not
invest in companies that are involved in the production, storing or
trading of anti-personnel landmines, cluster weapons or nuclear
weapons or the production of tobacco or pornography. In addition,
mining companies and power producers which derive 30% or more
of their income from thermal coal (or base 30% or more of their
operations on thermal coal) may be excluded from the investment
universe.
OECD Guidelines for multinational companies are
recommendations to multinational enterprises. They provide
voluntary principles and standards for responsible business conduct
in areas such as employment and industrial relations, human rights,
environment, combating bribery and more.
Resources and processes
A special committee has been established to administer and follow
up approved ethical investment guidelines throughout DNB. Input
and basic data for decision-making comes to the committee from
dedicated analysts (Team Responsible Investments) who
continually gather, process and review information about
companies. We also engage external consultants with expert
knowledge on these issues.
Active owners
Active shareholder engagement is the foundation of the ethical
investment guidelines and involves both informal (constructive
dialogue with firms) and formal (initiating shareholder proposals and
voting) actions. In cases where active ownership does not lead to an
acceptable solution, the company will be excluded from further
investment until it has implemented adequate measures to remedy
the situation.
DNB's ethical investment guidelines are based on the following
international principles and guidelines:
www.unglobalcompact.org
www.oecd.org/daf/investment/guidelines
The Ottawa convention and the Convention on cluster munitions
prohibits the production, storing or trading of anti-personnel
landmines and cluster munitions
DNB supports investor initiatives:
UN PRI, The Principles for Responsible Investment, is an investor
initiative in partnership with UNEP Finance Initiative and the UN
Global Compact which sets forth six principles for how to invest
responsibly. DnB NOR signed up for the Principles already in 2006.
www.unpri.org
UNEP FI is a global partnership between UN and the financial
sector which seeks to improve understanding of the impacts of
environmental and social considerations on financial performance.
www.unepfi.org
SRI funds and segregated accounts
Based on the specific policies of funds or segregated accounts we
also do specific negative screening beyond the scope of the ethical
investment guidelines, perform positive ESG-screening, climate
change analysis and other integration strategies. DNB is
continuously developing the model and the ESG-criteria. We are
also flexible in adapting the model to clients' specific needs.
DNB Asset Management S.A. · 13, rue Goethe, L-1637 Luxembourg · Tel.: +352 45 49 45 1 · funds@dnb.no · www.dnb.no/lu/en
SRI News 2016 Q2 - COMPANY UPDATES:
DAM finalized the new guidelines for climate and coal in its ethical
guidelines in early 2016. This spring, 52 companies have been
excluded from the investment universe of DNB based on the coal
criterion. The reason is a breach of the product criterion in the
ethical guidelines “mining companies and power producers which
themselves or through entities they control derive 30 per cent or
more of their income from thermal coal, or base 30 per cent or more
of their operations on thermal coal, may be excluded from the
investment universe”. These 52 companies are mostly utility
companies that base a large share of their power production on
burning thermal coal. The companies are based all over the world
including China, India, and the US (the three biggest countries in
consuming coal globally).
Companies operating in Western Sahara have to be particularly
careful in not violating major conventions or ethical norms. Chapter
XI of the UN Charter pertains to non-self-governing territories.
Article 73 stipulates that the economic and political developments in
such areas are to take place in accordance with the wishes and
interests of the people in the area. This principle has been
confirmed in a number of UN resolutions when it comes to Western
Sahara. San Leon Energy Plc explores and produces oil and natural
gas. The company is involved in onshore hydrocarbon exploration in
Western Sahara on behalf of Moroccan authorities – but not in
alignment with the wishes and interests of the people in the area.
San Leon Energy has a result been excluded from the investment
universe of DNB Asset Management (DAM) mainly due to breach of
the ethical guidelines “other particularly critical violations of basic
ethical norms”.
DAM is also engaging in other companies operating in Western
Sahara. For example, General Electric Co has assumed operational
responsibility for the construction of an electric line built in Western
Sahara, the lawfulness of this is being investigated. We have joined
engagement activities directed at General Electric.
Corruption continues to be a large topic globally. Petroleo Brasileiro
SA (Petrobras) is a major listed company, their main activity is the
production and refining of oil and gas. The company has been
implicated in a large corruption scandal in Brazil (“Lava Jato”), and
the US authorities have also started to investigate allegations of
corruption. DAM has joined engagement activities with the
company.
Also in Norway, there has been extensive focus on
incidents/allegations of corruption. For example in the telecom
sector, Telenor ASA has been criticized for the handling of their
partial ownership in VimpelCom Ltd. (VimpelCom has been involved
in a corruption scandal in Uzbekistan, but Telenor itself has not
been implicated). Telenor seems to have learned from this incident
and have done extensive work to improve their risk management
and routines for handling corruption.
OTHER NEWS
Morningstar has now introduced ESG-ratings of all the funds it
covers. The key elements are a sustainability score and a
sustainability rating. The sustainability rating is relative to other
funds in a category and leads to a score of one to five “globes”.
DAM’s funds did quite well, and achieved typically three “globes” or
better. However, the sustainability rating has to be used with
caution; perhaps it is best to use it as a starting point for a deeper
analysis of funds.
Our SRI analysts
Janicke Scheele is Head of Responsible
Investments in DNB Asset Management
AS. She is in charge of the RI processes,
ESG analysis and is working closely with
portfolio managers and analysts. Janicke
has long experience both as portfolio
manager and as investment advisor for
institutional clients and holds an MBA
degree from Norwegian School of
Economics in Bergen.
Karl G. Høgtun works as analyst
Responsible investments in DNB Asset
Management. He joined DNB in 1997. He
has long experience, both as financial
analyst and as portfolio manager - including
being Head of the Nordic equity team. As
part of that position, Mr. Høgtun managed
the green Nordic fund (DNB Grønt Norden).
He holds a MBA from the Arizona State
University and a MIM from American
Graduate School of Management
(Thunderbird).
Please contact us for any questions or feedback.
DNB Asset Management S.A. · 13, rue Goethe, L-1637 Luxembourg · Tel.: +352 45 49 45 1 · funds@dnb.no · www.dnb.no/lu/en