17 Nov 2020 14:46

New Sustainability Report Highlights Fund Company’s Progress

Stricter exclusion criteria for all funds, the launch of the eighth microfinance fund, as well as index-linked funds that exclude the extraction of fossil fuels and fossil energy production. That is some of the progress that SEB’s fund company SEB Investment Management highlights in its latest report on sustainability and active ownership. 

Last year, SEB Investment Management published a report that puts the spotlight on the fund company’s sustainability work, and an updated version has now been published.

”More and more of SEB’s customers are looking for sustainable savings- and investment alternatives, and this report highlights how the fund company works with sustainable investments,” says Elisabet Jamal Bergström, Head of Sustainability at SEB Investment Management. It can well be used by advisors in their meetings with customer, but it can of course also be read by anyone interested in the fund company’s sustainability work.”

Every year, SEB’s customers are asked which of the United Nations’ sustainability goals they want SEB Investment Management to prioritize, and just like last year the fight against climate change was this year seen as the most important goal. The result of this survey provides guidance for SEB Investment Management in its sustainability work.

Elisabet Jamal Bergström

”In order to meet customer demand, we have made the exclusion criteria for companies that extract thermal coal stricter and it is now maximum five percent of the turnover for all our funds. During the summer and the autumn of 2020 we also made four of our index funds, with total assets under management of more than 75 billion kronor, index-linked. That change means that they now exclude the extraction of fossil fuels as well as energy companies that generate energy based on fossil fuels,” says Elisabet Jamal Bergström.

An important part of SEB Investment Management’s sustainability work is ownership engagement. It is an active owner in the companies its funds have invested in, which for example means voting at annual general meetings, participate in nomination committees, and holding an active dialogue with management teams and boards.

SEB Investment Management has, during 2020, for example initiated a dialog with the Brazilian Government and Central Bank regarding the development in the Amazon, where deforestation, fires and the loss of biodiversity is an increasing problem. According to Elisabet Jamal Bergström, it is a good example of when the fund company’s investments — and ability to influence — can make a difference.

By integrating sustainability in the investment process, SEB:s fund managers have a crucial role to play in the work to future-proof the bank’s funds. SEB Investment Management’s Swedish and Nordic equity investments are managed by a team that uses a fundamental, quality-oriented investment process. Sustainability is, just like with all funds that SEB Investment Management manage, an integrated part of their investment process.

Caroline Forsberg

“Our ambition is to invest in companies that have integrated their sustainability work in their business models,” says Caroline Forsberg, who manages funds including the SEB Sustainability Fund Sweden Lux, which received the Svanen ecolabel in 2017.

Stricter reporting requirements, such as the EU Taxonomy, are also on the agenda. They will be introduced during 2021 in order to create uniformity in the reporting done by financial companies.

The EU’s so-called green deal is an ambitious agenda for sustainable development, where one of the core goals is to steer investments to environmentally sustainable activities, says Elisabet Jamal Bergström. “Requirements in this area will increase, both for us as an asset manager and for the companies that we invest in. Even if those requirements will put pressure on us, the need for sustainable investments is enormous and we are well positioned to meet these new requirements.”