Our principles
Fondsfinans Kapitalforvaltning is convinced that the financial industry has a crucial role to play in transitioning to a more sustainable economy and society, and we are committed to doing our part.
We are committed to sound corporate governance principles and long-term value creation. We believe that companies with effective management of significant ESG factors (environmental, social, and governance) will reduce their risks, gain a significant competitive advantage, and emerge as tomorrow’s winners.
Our goal is to approach ESG systematically and constructively, creating value for both our management and unit holders.
Melanie Brooks is Head of ESG and Portfolio Manager of Fondsfinans Fornybar Energi
Keeping our own house in order
In addition to being committed to sustainability in our role as investors and owners, we aim to drive good ESG practices in our own operations. We are committed to gender equality and actively seek to increase the proportion of women in various parts of the organization. We invest in our employees by offering opportunities for further education and development through our educational fund. We also aspire for our office operations to be climate-neutral and purchase offsets to compensate for our emissions.
As a company, Fondsfinans Kapitalforvaltning is conscious of its social responsibility, aiming to make positive contributions beyond what we can achieve as an employer and investor alone. We support the Cancer Society and the Church City Mission, and contribute to outdoor enjoyment in the mountains. The mountain lodge, Fondsbu, in Jotunheimen, is owned by Fondsfinans and leased to DNT Oslo and Omegn for a symbolic amount of 1 NOK per year.
Collaboration and participation in external initiatives
Fondsfinans Kapitalforvaltning has signed the UN PRI (United Nations Principles for Responsible Investment). By doing so, we commit to following the six current principles for responsible investment established by the initiative with support from UN, and to reporting on our actions in relation to these principles. Our responses to PRI’s annual survey can be found here.
We also actively participate in relevant ESG forums in our domestic market. Fondsfinans Kapitalforvaltning is a member of NORSIF (Norwegian Forum for Responsible and Sustainable Investment) and is represented in the ESG committee of the Norwegian Fund and Asset Management Association (VFF).
ESG in our investment process
ESG is an integral part of our investment process. Our managers seek to identify companies that we believe have great potential for long-term value creation. We are concerned with long-term trends such as the technological, demographic and green shift and assess how companies are exposed to these trends. We are also interested in companies’ positioning in relation to goals in recognized frameworks such as the Paris Agreement or the UN Sustainable Development Goals.
All our funds integrate sustainability risks (ESG-related risks and opportunities), along with other relevant risk factors, into our investment analyses and decisions. This means we analyze environmental, social, and governance aspects and events that could have a significant negative impact on the investment’s value. We base our analyses on information from sources such as companies’ public reports and presentations, media coverage, and providers of financial and ESG-related information. Based on our analyses, we may adjust, for example, our estimates for future earnings, future asset value impairments, and/or the risk premium we use in our investment calculations.
Additionally, we may engage in dialogue with companies we believe should reduce their sustainability risks, both to help the companies and to reduce the risk in our investments. If the sustainability risk is considered to be too high, or if companies are unwilling to address the risk, we refrain from investing in these companies.
Exclusion criteria across our funds
At a minimum, we follow the recommendations provided by the Council on Ethics for the Norwegian Government Pension Fund Global (GPFG). However, in certain areas, we extend our exclusions beyond these recommendations, both globally and within Norway, to avoid investing in companies or industries that are not socially beneficial. You can find the link to the GPFG guidelines here.
Fondsfinans Kapitalforvaltning refrains from investing in companies that contribute to gross or systematic violations of labor and human rights (including child labor or other exploitation of children), severe environmental damage, gross corruption, or other serious breaches of fundamental ethical norms.
In line with the ethical guidelines for the GPFG, we exclude investments in companies that produce tobacco or tobacco-related products, cannabis, and companies whose business is based on the extraction or power generation of thermal coal. We also exclude companies that manufacture weapons that, in normal use, violate fundamental humanitarian principles. This includes companies that produce key components for nuclear weapons, cluster munitions, and anti-personnel landmines. Additionally, we refrain from investing in companies that sell military equipment to sanctioned regimes.
In addition, we have chosen to exclude companies involved in the production of pornographic material, companies whose core business is gambling, and companies that are producers of alcohol.
Before any investment is made, the manager is obligated to verify whether the business activities of the prospective investment may conflict with our exclusion guidelines. Furthermore, all mutual funds are screened on a monthly basis using data from Morningstar/Sustainalytics to identify any breaches of our exclusion guidelines. If we discover that companies in which the funds hold shares violate these guidelines, the shares will be disposed of in a manner that best safeguards the interests of our unit holders.
For more information on what is excluded from our individual funds, please see the prospectus.
Active ownership
We aim to understand the companies we invest in. This means that we want to engage with management, understand the ownership structure, understanding the core business, value chain, and drivers, including significant ESG factors and strategic choices related to sustainability. We expect the companies we invest in to have a reflected shareholder policy, treat shareholders equally, be transparent, and demonstrate social responsibility.
We will use active ownership to influence where we believe it will create value for the companies and our shareholders. Fondsfinans Kapitalforvaltning will, among other approaches, seek to ensure that principles of sound corporate governance are upheld through dialogue with management, participation in general meetings, and the exercise of voting rights.
Our goal is to vote at 100% of the meetings and use an external data provider to facilitate the voting.
Regulations and reporting
We observe a growing interest for ESG in the market and recognize that this is an area undergoing rapid development in both practice and reporting. There are also increasing demands placed on us as asset managers from regulatory authorities and other stakeholders. As a Norwegian asset manager, we are subject to specific EU regulations that apply to Fondsfinans Kapitalforvaltning.
EUs Platform on Sustainable Finance
The EU has introduced an action plan for sustainable finance with various measures to promote sustainable economic activity. Key elements of the action plan include the EU Taxonomy and the Sustainable Finance Disclosure Regulation (also known as SFDR).
The EU Taxonomy aims to establish a common understanding of which economic activities can be classified as sustainable. In contrast to the Taxonomy, SFDR is not a classification system but rather focuses on disclosure requirements. Asset managers are required to report on ESG and sustainability at both the product and company levels under SFDR.
In Europe, certain parts of the EU’s action plan were implemented as early as 2021. Additional requirements have been enforced since 2022 and 2023. In Norway, a new law on the disclosure of sustainability information in the financial sector and a framework for sustainable investments (covering SFDR and taxonomy) were passed by the parliament in December 2021. SFDR level 2 came into force on December 11, 2023. As a result, we have published new SFDR documents on our website.
Our reporting in accordance with SFDR
We aim to assess relevant ESG information in the management of all our funds, in line with the investment mandates of each fund. This includes conducting ESG risk assessments in our company analyses, as outlined in our ESG integration within our investment process. However, beyond these risk assessments, we have various strategies and objectives related to sustainability and ESG in each fund. How our funds are regulated by the different articles of SFDR will depend on each fund’s approach and any sustainability and ESG objectives they may have.
Regulation of our funds in accordance with the articles of the SFDR:
Click on the fund name for more fund-specific information in accordance with SFDR.
Article 6: Funds that integrate sustainability risks without promoting environmental or social characteristics.
Article 8: Funds that both integrate sustainability risks and promote environmental and social characteristics through selection and active ownership.
- Fondsfinans Global Utbytte
- Fondsfinans Norden
- Fondsfinans Norge
- Fondsfinans Utbytte
- Fondsfinans Global Helse
- Fondsfinans Obligasjon
Article 9: Funds that both integrate sustainability risks and have sustainable investments as their objective.
PAI Statement
At the enterprise level, Fondsfinans Kapitalforvaltning AS has currently chosen not to consider or report the adverse impacts of investment decisions on sustainability factors (defined as Principle Adverse Impact (PAI) indicators by EU). Data availability poses a significant challenge, as many companies within the investment universe of our equity and fixed income funds do not provide sufficient data for us to base PAI assessments across our funds. If we have enough PAI data for the companies within some of our funds, this information may be incorporated into investment decisions, and we will consider reporting PAI indicators at the fund level. We will conduct a new assessment annually (by June 30) to determine whether it is practical to consider and report PAI indicators at the enterprise level.
Remuneration schemes in Fondsfinans Kapitalforvaltning AS
The Board of Directors of Fondsfinans Kapitalforvaltning AS (“Fondsfinans”) has adopted a remuneration scheme for the company’s employees and employee representatives. The remuneration scheme is in accordance with Regulation No. 1467 of 21 December 2011 to the Securities Trading Act and will be reviewed by the Board of Directors at least once a year. The remuneration system is designed to take sustainability risk into account and that risk-taking that is incompatible with the risk profile, articles of association or other memorandum of association for funds under management is not encouraged. Integrating sustainability risk is part of the overall risk assessment for our investment products and is therefore included in all risk references in our remuneration policy.
Our Statement on the Transparency Act
This statement pertains to Fondsfinans Kapitalforvaltning AS (“Fondsfinans”), which is wholly owned by the family-owned company Must AS.
The company is headquartered in Oslo and manages the mutual funds Fondsfinans Norden, Fondsfinans Norge, Fondsfinans Utbytte, Fondsfinans Global Utbytte, Fondsfinans Global Helse, Fondsfinans Fornybar Energi, Fondsfinans Aktiv 60/40, Fondsfinans Obligasjon, Fondsfinans Kreditt, and Fondsfinans High Yield. The majority of our unit holders are Norwegian institutional investors and wealthy private individuals.
Fondsfinans is organizationally divided into Asset Management, Back Office, Mid Office, Sales, Marketing, Accounting/Risk, and Compliance, all of which report to the Managing Director. The Managing Director and Compliance report to the Board of Directors of Fondsfinans. The Board consists of two unit holder-elected representatives and two shareholder-elected representatives, in addition to the Chairman. The company’s highest authority is the General Assembly.
Business ethics, sustainability, and social responsibility are integrated into Fondsfinans’ asset management operations. We are committed to sound corporate governance principles and long-term value creation. In addition to focusing on sustainability in our role as an investor and owner, we aim to be a driving force for good ESG practices in our own operations.
Fondsfinans Kapitalforvaltning avoids investing in companies that contribute to gross or systematic violations of labor and human rights. As a minimum, we follow the recommendations of the Council on Ethics for the Government Pension Fund Global (GPFG), and exclude, among others, the following types of companies:
- Companies that produce weapons which, when used normally, violate fundamental humanitarian principles
- Companies that sell military equipment to sanctioned regimes
- Companies that contribute to gross or systematic violations of labor and human rights (including child labor or other exploitation of children)
Before making an investment, the manager is obliged to check whether the business activities of the potential investment object may be in conflict with our guidelines. Furthermore, a monthly ESG screening of all our equity funds is conducted, where we receive updated information on controversial products as well as any ESG incidents and whether there have been violations of, for example, the UN Global Compact and the OECD Guidelines for Multinational Enterprises.
Fondsfinans has signed the UN PRI (UN Principles for Responsible Investment), thereby committing to follow the six applicable principles for responsible investment and to report our measures with respect to these. We also actively participate in relevant ESG forums in our home market. Fondsfinans is a member of NORSIF (Norwegian Forum for Responsible and Sustainable Investments) and is represented on the ESG committee of the Norwegian Fund and Asset Management Association (VFF).
Based on our due diligence assessments, our asset management operations inherently pose a low risk of negative consequences for fundamental human rights and decent working conditions. We have not identified any actual or potential negative impacts on fundamental human rights and other working conditions that our asset management operations have contributed to, either directly or indirectly.
Anyone can request information on how Fondsfinans handles actual and potential negative impacts on fundamental human rights and decent working conditions. Requests for information should be sent in writing to fondsinvestor@fondsfinans.no. The usual response time is 3 weeks. For particularly demanding information requests, up to 2 months may be required to provide a response. There are certain limitations on the information Fondsfinans can provide, both due to privacy concerns and regarding business relationships of competitive significance.
Approved by the Board of Fondsfinans Kapitalforvaltning AS
Oslo, May 21, 2024
Would you like to know more about how we work with ESG? Send an email to: esg@fondsfinans.no