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Active ownership: Energy at the top of the agenda in 2018

Danske Bank has just launched the 2018 report about our active ownership. It shows that energy related matters were the most frequently discussed with the companies, in which we invest.

When customers entrust Danske Bank with their savings and assets, they expect us to invest sustainably and incorporate environmental and social matters, and corporate governance (ESG) into the investment process.

Our commitment to sustainable investment is an integral part of our duty to customers, and when we incorporate ESG alongside financial factors, we can understand companies better – their risks and opportunities – and make better-informed investment decisions. Simply put, ESG is rooted in our investment processes and we call our approach for ‘ESG Inside’.

Taking responsibility
Our approach to active ownership is based on the belief that it is more sustainable to stay invested in companies and address challenging issues through dialogue and voting. Rather than divesting and thereby refraining from the opportunity to influence companies, we engage with companies as our first option in order to make a positive impact and act as a responsible investor.

Active ownership through direct dialogue and voting
Dialogue with our portfolio companies is an important part of the investment process, as it provides our investment teams with a better understanding of their business models, strategies and positions. Voting at annual general meetings and dialogue makes it possible for our investment teams to influence companies to integrate sustainability into their business models, challenge their positions and support their development and growth.

Energy: The most frequent topic
Danske Bank’s investment teams discuss a wide range of material ESG issues with portfolio companies such as labour standards, product safety, anti-corruption and sustainability integration.

Danske Bank’s active ownership report for 2018 shows that energy efficiency and energy transformation were among the most frequent ESG topics. This is due to the transformation that the energy and utilities sectors are undergoing, which is mainly driven by political regulations and new energy efficient technologies.

Most frequent ESG topics discussed

“The ongoing shift towards lower carbon energy production provide interesting opportunities in both energy companies and utilities. Through close dialogue with portfolio companies’ management, we can identify the best positioned companies to generate long-term value. 

For instance, we zoom in on development of infrastructure for electric vehicles, replacement of coal fired power generation and also oil companies focusing on lowering their carbon emissions with cleaner energy sources,” says Kasper From Larsen, Senior Portfolio Manager and sector specialist for energy and utilities at Danske Bank. 

Mitigating risks and unlocking opportunities
Kasper From Larsen believes that energy topics will continue to be key issues for years to come, as companies are increasingly impacted by new technologies, regulations and changes in consumer behaviour on a global scale.

Clean energy production is increasingly becoming a focus point for society and customers around the world and those companies that embrace the transition are more likely to outperform from an investment perspective. In addition to identifying investment opportunities, we are also in dialogue with portfolio companies to improve their ESG performance thereby influencing portfolio companies to not only mitigate ESG risks, but perhaps more importantly, to unlock opportunities that might otherwise be foregone.

Kasper From Larsen

Senior Portfolio Manager and sector specialist for energy and utilities, Danske Bank.

More on active ownership

What is active ownership?
Active ownership is the use of rights and position of ownership to influence the activities or behaviour of portfolio companies. Active ownership is regarded as one of the most effective mechanisms to manage risks, maximise returns and contribute to a positive impact on society. Active ownership is part of our fiduciary duty to customers to achieve the highest and most stable investment returns.

2018 report on active ownership
Dive into other insights in our full 2018 report on active ownership. 

Download report

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