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Michael Maldener (Nordea Investment Funds S.A.): ESG Legacy

Michael Maldener, Managing Director, says Nordea Investment Funds S.A. has been integrating ESG and sustainability for over 30 years. Interview.

 

Can you present Nordea Asset Management in a few words?

 

Nordea Asset Management is a responsible manager with a global reach. Our management company is situated in the Grand-Duchy, the crossroads of Europe, allowing for effective global distribution. Nordea Asset Management is part of the Nordea Group, one of the largest financial services groups in the Nordic region. As an active owner, we fulfil our mission to deliver returns and responsibility to clients in Europe, the Americas and Asia. We manage asset classes across the full investment spectrum with responsible investing being deeply rooted in our Nordic DNA and also what our investors expect from us.

How has Nordea Asset Management integrated ESG in its activity?

 

We have been integrating ESG and sustainability for over 30 years, from the time we launched our first sector-

screened fund three decades ago. Our team of seasoned professionals has developed a strategy where returns and responsibility go hand-in-hand. We engage with companies to improve ESG risk management, foster positive change and protect the long-term interests of our shareholders. As an active owner, we exercise our formal voting rights as well as proactively engaging with companies and encouraging them to improve their management systems and ESG performance. To stay at the forefront of Responsible Investment, we also play an active role in local and global ESG initiatives and promote best practices in the companies we invest in.

"To stay at the forefront of Responsible Investment, we play an active role in local and global ESG initiatives and promote best practices in the companies we invest in."

What ESG opportunities & challenges do you foresee for the funds industry in the next 5 years?

 

In terms of opportunities, 2020 flows statistics on ESG-related products show that client demand is growing and is expected to grow further, soon outplacing investments in more traditional, non-ESG funds. So the potential for active managers who take the topic seriously is enormous. In terms of challenges, asset managers must be credible over the short and long term. To do this, we have to deliver concrete reliable proof points that demonstrate why clients’ investments matter and how they make a tangible difference. Clients demand tangible, easy to understand proof of the link between their investments and the results they deliver. Quantifying this with analytics and data is a challenge. That’s why Nordea has a dedicated RI Team that interacts closely with ESG analysts who employ our in-house proprietary ESG analytics to thoroughly vet companies. Having access to accurate and relevant data, thorough analysis and integration of ESG aspects in investment decisions-making, a committed organization and value chain from back to front as well as, at the end, meaningful reporting are eventually the main challenges ahead.