As a fund management company, our ambition is for you as a customer to feel confident that we work with the sustainability perspective in a conscious and responsible way in all our funds. What can differ is the direction and focus of our funds - this is based on our commitment to having a broad and high-quality offering that covers many sectors and markets.

Sustainability is a complex area and has grown from covering only certain aspects of the environment and ethics to include many more. Some examples are human rights, climate, biodiversity, equality, energy, health, education - and how management manages and manages a company. As sustainability has grown, so has everyone’s knowledge of the different areas. And even though we as individuals may think that sustainability is important in its entirety, it may be that, on a personal level, we are actually a little extra passionate about one or more areas. This is also something that is included in the advisory regulations (MiFID II) and affects you as a customer:

• In connection with advice, your financial adviser must give you, as a client, an introduction to sustainability.
• The adviser is also obliged to ask you whether you think sustainability is important and, if so, which areas you would like to prioritise for your savings/fund selection.
• The adviser must also ask you what you think is important that the fund management company and the manager have taken into account in their reporting for a product, and then present options that meet your wishes as closely as possible.

The exact questions you will receive from your financial adviser will probably vary depending on the bank or distributor you visit.

Article 9 funds are also known as dark green funds and have extensive requirements regarding both what they must report on and the types of companies in which the fund invests. It is also a term and condition that the fund has sustainable investments as its objective, which may, for example, mean that the fund invests in companies whose products contribute to the UN’s global goals or to reduced carbon emissions.

Article 8 funds are also called light green, have less stringent requirements than Article 9 funds and can therefore vary in sustainability level. For example, an Article 8 fund may only have a strategy to opt out of certain holdings, such as tobacco and nuclear weapons, while another Article 8 fund may have a more comprehensive sustainability strategy that goes beyond simply opting out of certain sectors. Some funds can also work actively to influence a company’s transition to a more sustainable business. Swedish fund management companies are generally far ahead of integrating the sustainability perspective into their investment process. This is also part of the explanation for the fact that the majority of funds on the Swedish market are currently categorised as Article 8.

Article 6 funds are funds without a sustainability profile as required for Article 8 and 9 funds, but which can still take sustainability risks into account in management. Based on its ownership role, the Fund can also engage in an active dialogue with companies and thereby still support and drive the company in a more sustainable direction forward. The reporting requirement for these funds is much less extensive than for Article 8 and 9 funds.

Our funds are not divided into good or bad. Our customers can feel assured that we work with sustainability in a conscious and responsible way in all our products and services.

Our long-established and comprehensive policies, guidelines and strategies for selecting, deselecting and influencing apply both now and in the future. They are and will continue to be a stable platform in our work and provide a clear framework for how we work with sustainability in our operations.

Nor does the EU’s regulatory framework mean that we will start working in a completely new way - however, it means that we need to collect more data, and report and follow up on what we do in a bit new and very comprehensive way. Since the data we need to report on is currently missing from many companies, we as a fund management company purchase data that can be estimated data from suppliers. We also carry out our own qualified assessment, in which our +80 managers, sustainability analysts and corporate governance specialists work closely together.

As a first step, we look at how a company conducts its business and whether it is in line with our Responsible Investment Policy. We also check that the company or the investment as such does not violate international standards.

Here, we assess the potential significant harm an investment may have to people and the environment. A few concrete examples include how much carbon dioxide a company emits and breaches of the UN’s global agreements. This assessment is called DNSH (Do No Significant Harm).

The EU Green Taxonomy Regulation - the Taxonomy - is a classification system for determining whether an activity is environmentally sustainable. It sets clear limits for which economic activities can be considered environmentally sustainable. It is therefore not a classification of an entire company, but only the company’s production in certain categories such as cement, aluminium or cars, which is evaluated and classified based on whether they meet the taxonomy limits or not.

More about the taxonomy

The Taxonomy requires large companies in the EU that are of public interest and have more than 500 employees to report in their annual reports how much of the company’s revenue derives from activities that meet these requirements, and which can therefore be classified as environmentally sustainable. As a fund management company, we also need to state how much of the investments in our funds are environmentally sustainable.

At present, there is a lack of reporting from the companies in many cases. Therefore, we purchase data (both reported and estimated) from suppliers such as Sustainalytics. We also make our own assessment in addition to the purchased data.

Over time, more and more companies will report taxonomy data and we will hopefully also be able to see the companies’ movements and gradual improvements. However, we must be prepared that most companies, and thus also funds, will initially have a relatively low proportion that is environmentally sustainable under the taxonomy.

Today, we see that only a few companies do meet the thresholds, but we hope to see a clear improvement over time. The proportion of companies and funds that are environmentally sustainable under the taxonomy will also increase when the taxonomy is broadened with the four remaining environmental objectives, with more sectors and with targets and thresholds relating to social sustainability. The taxonomy is under development and we are only in the early stages. It will take a few more years before we can see the effects of these regulations.

If it is a bond that is to be assessed, we check whether the bond is classified primarily according to ICMA.

If a company has no or only a minor share aligned with the taxonomy, we look further at a company’s products and services and analyse them against the UN’s global goals. Do the company’s products or services contribute to one or more of them?

If a company’s products and services do not reach our set minimum level, we may carry out an additional analysis in certain cases. Among other things, we look at whether there is actual data that shows that a company’s products or services reach a higher level than the estimated and purchased data shows. In the analysis, we also examine whether a company’s operations can be considered important for achieving one or more of the UN’s global goals.