Nordea Asset Management, which oversees about $320 billion, is creating a new fund to target ethical assets globally as appetite for sustainable investments rises.
Nordea has two teams working on its new Global Stars fund, which will include 50 to 100 companies, Sasja Beslik, head of responsible investments, said in an interview in Stockholm on Wednesday. The teams are led by Beslik and Mathias Leijon, Nordea Asset Management’s chief investment officer.
The fund, set to start in 2016, will use a “fundamental and active approach, bottom up,” Beslik said. Nordea already runs similar Stars-branded funds targeting sustainable assets in emerging markets and the Nordic region. This will be the first time it chases such investments across global markets.
Nordea Asset Management, one of the biggest investors in the Nordic region, is by no means alone in carving out ethical return goals. Norway’s $840 billion sovereign wealth fund, the world’s largest, has long shunned firms identified by an ethics council as employing dubious practices. This month, the wealth fund targeted palm oil producers, and excluded Daewoo International Corp. and Posco from its investments.
Nordea probably won’t add more companies to its exclusion list but will try to influence firms to ensure their practices don’t have an adverse impact on issues including climate change, water protection, carbon dioxide emissions or child labor, Beslik said.
The asset manager travels 140 days a year and has investigated shale gas production in the U.S., Hennes & Mauritz AB textile suppliers in Ethiopia and gold mines in South Africa.
Beslik recently went to India, where he filmed suppliers to the pharmaceutical industry amid concerns about water pollution. Following that trip, Beslik sent letters to 28 pharmaceutical companies with questions on how they monitor and limit water pollution. He has received answers from eight ahead of an Aug. 31 deadline.
Nordea last year stopped investing in companies that contribute to the production or development of nuclear programs, including Areva SA, BAE Systems Plc and Boeing Co. It has also excluded firms involved in cluster munitions and anti-personnel mines, as well as more than 25 companies involved in coal.
Beslik says climate change will dominate the sustainability agenda in coming years and shape Nordea’s investment strategy.
“The business needs to step up and particularly the financial industry,” Beslik said. “There is a big question mark on how we’re going to finance the transition that’s needed so one of the biggest challenges is not to find the new money but to reshuffle and reallocate or reshape the investment strategies.”