Nordea Asset Management (Nordea), the largest bank in Scandinavia, has teamed up with over 200 global investors to address companies on human rights. Nordea hopes that the consortium will put pressure on companies to act responsibly.
According to 2020 rankings published by the Corporate Human Rights Benchmark, 106 companies — nearly half of the 230 assessed — scored zero on all five of the benchmark’s human rights due diligence indicators. Of these 106 companies, 79 had also failed to score above zero in 2019.
The findings have prompted calls for urgent action from a group of 208 international investors, including Nordea. In a letter sent on May 10, 2021, the group called on the worst performing companies to publicly disclose information in five key areas, including how they prevent, mitigate, and remediate adverse human rights impacts across their value chain.
Recipients of the letter include PetroChina, Devon Energy, Costco Wholesale, Starbucks, Yum! Brands, Target, General Motors, and Honda.
The Corporate Human Rights Benchmark is a collaboration of investors and civil society organizations. Each year, it ranks the largest publicly traded companies in the world based on a set of human rights indicators informed by UN principles and guidance issued by the Organization for Economic Co-operation and Development (OECD). Nordea has been a partner of the Benchmark since January 2016.
Together with the other signatories of the letter, Nordea is also a member of the Investor Alliance for Human Rights, a collective action platform for responsible investment. The members collectively represent over US$4.9 trillion in assets under management (AUM) and 18 countries.
Other Efforts
The human rights news comes just a month after Nordea announced a new bond fund targeting ESG assets in emerging markets. Titled the Global Green Bond Fund, the fund has earmarked at least 70% of its assets toward “green bonds” with the rest going toward sustainable businesses.
Nordea has been one of the more aggressive ESG-focused banks and is one of the few large global players looking to integrate sustainable practices and investment options throughout its products and services.
Nordea has medium-term targets for 2021 to 2023 that cover its ESG funds, green mortgages, green bonds, and sector polices. It even incentivizes customers to make choices that could lead to more sustainable banking practices.
Over the long-term, Nordea plans to reduce carbon emissions from its lending and investment portfolio by 40% to 50% and achieve net zero emissions by 2050 at the latest. By 2030, it hopes to reduce carbon emissions from its internal operations by at least 50% and deliver net-positive carbon contribution through offsetting.
The company finished 2020 with total AUM in ESG products of US$89.1 billion, mortgages with green collateral volumes of US$430 million the fourth quarter of 2020, and total 2020 net volumes in sustainable savings of US$1.47 billion. These efforts likely contributed to Nordea winning the “ESG engagement initiative of the year” prize in the 2020 Sustainable Investment Awards.
