Socially responsible investing

Five questions to DNB Asset Management

DNB – A pioneer in the field of sustainable investing?

Sustainable investing plays an important role across the entire DNB organisation. During the late 80s, for instance, we initiated projects - sometimes in cooperation with universities - that soon enabled us to manage our funds actively and sustainably, that is in line with social, ethical and environmental criteria. The company already implemented corresponding minimum criteria in its investment process in 1988. DNB is considered a pioneer of socially responsible investing not only in Norway but also on an international level. These social, ethical and environmental criteria apply to the entire 60 billion EUR assets under management and, as such, also to each individual investment fund.

What does sustainability and active ownership really mean?

It is important to define sustainability. What can investors effectively expect from DNB Asset Management? DNB has defined social, ethical and environmental criteria for all investments. We monitor the capital market daily and take action if our investments risk involving us in

• unethical conduct,

• corruption,

• the infringement of human or labour rights or

• environmental damage.

Our pre-defined minimum criteria also ensure that DNB Asset Management will not invest in companies that make money for instance by producing, storing or trading with weapons manufactured for military purposes. By the same token, we have also excluded the tobacco industry and pornography. [Since investors have their very personal views on what constitutes sustainable investing, each and every firm across the entire sustainability industry needs to clearly define how sustainability is taken into account in its specific investment process.] In our mutual funds, transparency is a top priority. Investors can view all our holdings on the Internet. Only then can investors decide whether the respective investment approach meets his/her individual objectives. Naturally, we also cater to the requirements of institutional investors by implementing additional criteria.

Does the exclusion of companies go far enough?
No. Importantly, our approach is based on a second pillar, the execution of owner rights. We do this via formal and informal channels, i.e. by entering into constructive dialogue with the individual companies and by submitting shareholder proposals and exercising our voting rights. Many of these processes are successfully completed. We have many success stories to tell. Only in cases where active ownership does not lead to an acceptable solution will the company be excluded from further investment until it has implemented adequate measures to rectify the situation. We report on a quarterly basis on the dialogue we have entered in as part of our active engagement and on exclusions we have implemented as a last resort. At the same time, active investing at DNB also translates into the active generation of alpha - our investors obviously want us to deliver strong performance, too.

Can an investor rely on DNB’s SRI approach?

Yes, we address the issue across various stages of the investment process. A special committee is responsible for implementing and monitoring the ethical investment guidelines throughout DNB. Input and basic data for decision-making comes to this committee from our dedicated SRI-analysts in Stockholm and Oslo who continually gather, process and review information about companies. In addition, we also utilise the research capacities of external consultants such as brokers or rating agencies with corresponding specialist expertise. Our portfolio managers focus on the traditional securities analysis and do not need to worry overmuch about sustainability issues. They are already presented a pre-filtered, narrowed-down universe.  Generating performance is their key priority. An independent pre-security selection is guaranteed by the SRI-analysts. (Furthermore, the ethical investment guidelines of DNB are based on globally applicable principles and guidelines such as the UN Global Compact Principles, the OECD guidelines or the Ottawa Convention that prohibits the storage and distribution of land mines and cluster ammunition. Or the UN PRI that have defined six guidelines for responsible investing.)

For what type of investor are the funds suitable?

Our entire fund range is managed actively and responsibly. As such, the funds are well suited both for institutional and private investors. Accordingly, we also provide transparent and intuitive, partly in-depth investor information on our website for all types of investors, and – on top of that - we are always more than happy to personally answer investor questions. We look forward to the dialogue and to answering all of your questions.

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