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Active Ownership: Companies increasingly impacted by sustainability

Danske Bank’s new active ownership report shows a spike in the number of ESG topics discussed with companies, which accentuates sustainability’s impact on companies.

Our new report for active ownership illustrates the increasing focus on environmental, social and corporate governance (ESG) topics from an investment perspective. The report for the first half of 2019 shows that the number of ESG topics discussed with companies has increased to 83 compared to 59 in 2018. It illustrates the soar in sustainability issues that could have an impact on company performance and thereby the potential return to Danske Bank’s customers.

Active ownership is an integral part of Danske Bank’s work with sustainable investment and our ambition to deliver attractive returns to customer while influencing companies and contributing positively to society. As an example, healthcare is one of the industries where Danske Banks’s investment teams consider sustainability issues.

Sustainability play an ever more important role for us as investors and our customers, and this has made pharmaceutical companies more responsive to our input and more willing to discuss their sustainability work. ESG topics are important because they can influence companies’ future earnings.

Claus Henrik Johansen

Senior Portfolio Manager specialized in healthcare, Danske Bank

Focus on business ethics
Business ethics is a focal point in Claus Henrik Johansen’s company dialogues, as weakness here can have negative consequences for the company.

“We have seen companies being involved in misleading marketing or bribery, and court cases that have resulted in fines or bans on selling particular products. This can affect our investment negatively and is something we have to include in our assessment of the company. What is important for us is that companies learn from these cases and tighten their internal guidelines so they can prevent similar cases,” says Claus Henrik Johansen.

When Claus Henrik Johansen talks to companies, he tells them that he prefers to see sustainability anchored at the core of the company and strategically placed at the executive management team. This is increasingly the case among European companies, whereas sustainability tends to be less well integrated with top management in US companies.

Read the report

Our approach to active ownership

Danske Bank exerts active ownership as a tool to

  • manage risks
  • unlock opportunities
  • maximise returns
  • contribute to positive developments

It is part our sustainable investment strategy called ‘ESG inside’ and our fiduciary duty. Through dialogue and voting at annual general meetings, investment teams can influence companies to integrate sustainability into their business models, challenge their positions and support their development and growth.

Learn more about active ownership