SEB is one of the largest institutional investors in the Nordic region with more than SEK 1,780 billion in assets under management for private, corporate and institutional clients. We invest in businesses that actively manage the environmental, social and governance aspects of their business as we believe they will be more successful over time and that this will add value for our customers, the companies we invest in and for society.
Our investment philosophy is based on continuously influencing the market, inclusion through positive selection and exclusion based on negative screening.
A key aspect of responsible investments is about engaging with companies in order to influence them to change. Our investment teams hold dialogues directly with Nordic companies. We are active in nomination committees and co-operate internationally with other investors. Read more about Responsible and active ownership, what we exclude, how we influence and how we collaborate here.
Ethical and sustainable funds
All SEB funds exclude companies involved in production or marketing of controversial weapons and the development or production of nuclear weapons programmes. In addition to that, our sustainable and ethical funds do not invest in companies that violate international conventions and guidelines, such as UN Global Compact and the OECD Guidelines for Multinational Enterprises on environmental responsibility, labour rights, human rights, controversial weapons and corruption. Other sectors that are excluded are alcohol, weapons, tobacco and/or pornography. The funds also avoid companies with main revenues from commercial gambling.
In 2016, the number of companies that are excluded from one or more of our funds tripled. This is due to our coal policy and the exclusion of fossil fuel extraction companies in several funds (see below).
SEB offers more than 15 funds with a clear sustainability profile, among them SEB Hållbarhetsfond Global (Sustainability Fund Global). The focus on positive selection in portfolio management, seeking companies with effective waste management, low carbon emissions and good water usage, has contributed significantly to our portfolios’ returns. It is now the base for integration of sustainability in the majority of our equity and fixed income portfolios and funds.
Reduced coal exposure
From 1 July 2016, SEB excludes from all funds companies involved in thermal coal extraction, ie mining activities, where coal accounts for more than 20 per cent of the company's or group's turnover. SEB also increases the active management through dialogues with energy-related companies, where coal as an energy source exceeds 10 per cent. The decision is implemented for SEB's actively managed equity and fixed income funds, while index funds will implement this during the autumn 2016.
External funds in our fund offering
Funds from suppliers other than SEB, external funds, are evaluated by a special fund analyst team. We require all new external fund management companies to have signed the UN Principles for Responsible Investment (UN PRI) or to follow an equivalent sustainability framework internally, and to exclude controversial weapons.
The companies we have had long-time relationships with, and that might not have signed PRI, we work actively to make them sign the principles and thereby commit to achieving certain internationally recognized standards in sustainability. In July 2016, 90 percent of these fund companies had signed the PRI. We also pursue an active dialogue with the fund companies whose funds invest in companies that SEB has on the exclusion list.
Top ratings from PRI
SEB signed the UN supported Principles for Responsible Investments (PRI) in 2008 and they serve as guidance for the fund company’s sustainability work. Our work with sustainable investments is performed in a number of different ways, from influencing companies in the right direction to actively selecting companies based on various sustainability themes and to excluding certain companies. In PRI’s annual grading of sustainable investments, SEB received top ratings for both its equity and fixed income management for 2016. SEB scored A and A+ in eight out of nine asset classes.
Signatory as asset owner
In November 2016, SEB Life & Pension signed the PRI as an asset owner. Adding the asset-owner perspective gives SEB access to new collaboration forums and the possibility to pursue sustainability issues with other capital owners and make demands on external investment managers.
In 2016, SEB launched its fourth microfinance fund for institutional investors and is today one of the largest manager of microfinance funds in Europe. Through investing in microfinance institutions, SEB’s microfinance funds provide financing for entrepreneurs and low and middle income households in emerging and frontier markets. Over 4 billion SEK has been invested through microfinance institutions reaching more than 17 million micro-entrepreneurs in 33 developing countries.
SEB is the only bank in the Nordic market that can offer institutional clients this type of investment. SEB's traditional life insurance companies invest in microfinance funds, which are thus made available to private pension customers.