GES Newsletter
December 19, 2008

Three Nordic pension funds – Folksam from Sweden, Ilmarinen from Finland and KLP from Norway – have formed the Nordic Engagement Cooperation (NEC), in order to coordinate their engagement activities with companies on environmental, social and governance (ESG) issues. The partners are open to participation of other investors and particularly seek a Danish investor to make the Nordic group more complete.

The NEC collaboration will be based on a systematic screening of approximately 4,500 companies in order to identify and examine possible violations of international conventions and guidelines on ESG issues. This typically leads to the identification of some twenty candidate companies for more in-depth assessment. Every year, the ambition is to conduct an active dialogue with around ten companies. The screening and the analysis are performed by GES Investment Services. In addition, GES will assist NEC on company dialogue, analysis, advice and coordination of NEC’s activities.

Since NEC wants to represent all of the Nordic countries, they are seeking a Danish partner. But also international investors may find it interesting to liaise with a powerful Nordic partner committed to responsible investment.

“I am thrilled at this opportunity for true Nordic cooperation. Through NEC we can pool our resources and therefore achieve significantly more in our joint engagement efforts compared to our individual engagement”, says Anna Hyrske, Senior Advisor CSR at Ilmarinen.

“Investors concerned with responsible business practice all have the same goal. We want sustainable and responsible investment opportunities. In Norway, KLP is actively engaged in a project called ‘Sustainable Value Creation’ and we are hopeful that NEC can be a platform for the project’s expansion to other Nordic countries”, says Jeanett Bergan, Head of Responsible Investments at KLP.

“Folksam and KPA Pension have always taken a keen interest in responsible investment – it is part of our DNA. The NEC initiative confirms that commitment”, says Carina Lundberg Markow, Head of Corporate Governance at Folksam.

“All three participating investors are signatories to the UN Principles for Responsible Investment (PRI). As such they are obligated under UNPRI’s Principle 5 to seek cooperation with other investors in different activities. NEC is an excellent example of how this can be done”, says Magnus Furugård, President and Managing Director of GES Investment Services.

Decisions to exclude companies from the investment portfolio will be made individually by the funds.