NORDIC FUND SELECTION JOURNAL
Danish pension funds turn to ESG manager ratings
By Caroline Liinanki
As an asset owner, it’s not accepted anymore to just say that
you rely on the asset manager to live up to the criteria because
how can you be sure?”
– Charlotte Mansson, GES International
As a way of ensuring compliance with internal ESG policies and to push asset managers
to take ESG integration more seriously, several Danish pension funds have begun scoring
their managers on their efforts.
It remains to be seen whether other Danish pension funds will follow suit. Ralf Magnussen, chief investment officer of AP Pension, says that while the pension company hasn’t conducted any ESG rating of its external managers yet, he doesn’t rule out that it will in the future. At PBU, on the other hand, head of ESG Rasmus Juhl Pedersen says that the pension fund is not considering beginning to rate its external managers but will be strengthening its dialogue with managers on ESG integration.
However, Charlotte Mansson, director of client relations at GES International, expects more pension funds to embrace ESG ratings. “We are definitely seeing a trend where pension funds are putting a more structured approach into evaluation and rating of their managers,” she says. “It’s part of the evolution of ESG integration by putting the burden on the next link in the chain. As an asset owner, it’s not accepted anymore to just say that you rely on the asset manager to live up to the criteria because how can you be sure?”
So far, the firm has got six pension fund clients when it comes to ESG rating of managers: one Dutch pension fund, two UK pension fund and three Danish pension funds. Three of the investors have signed up over the last year.
Charlotte Mansson continues: “Many managers have lots of nice glossy report where they talk in very vague terms about ESG integration but when you really scratch the surface, ask questions and dive into the topics, there’s often a lack of a structured process and substance and that’s where we find that managers lose rating points.
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