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SKAGEN AS (SKAGEN) is autohrised to provide portfolio management services pursuant to Section 2-1 (1) no. 4 of the Securities Trading Act. In executing its portfolio management responsibilities, as described in the portfolio agreement SKAGEN has entered into with Storebrand Asset Management (SAM), SKAGEN shall seek to provide best risk-adjusted return for units holders in the funds managed by SKAGEN.

SKAGEN AS is part of the Storebrand Group. Storebrand Asset Management AS is the largest private asset owner in Norway and owns 100% of SKAGEN AS.

2. About the Policy

The purpose of this document is to establish the SKAGEN's policy for the disclosure of integration of sustainability risks in our investment process as well as our approach to remuneration in line with the respective requirements in the Sustainable Finance Disclosure Regulation[1]. For product specific information, please consult the respective fund prospectuses, which are available on the webpages.

SKAGEN's sustainability framework is embedded under the Storebrand Asset Management framework for sustainable investments. Storebrand Asset Management is a global leader in sustainable investments. As the first Norwegian company to establish a sustainable investment department in 1995, it has a track record of developing and offering a variety of leading and innovative sustainable funds. SKAGEN's sustainability framework benefits from being integrated within the Storebrand Asset Management framework in key areas. The most important of which is adherence to joint exclusion criteria and normative expectations of the companies the group invest in. This framework is referred to as the 'Storebrand Standard' and consists of a comprehensive set of exclusion criteria and principles that SKAGEN adheres to in its investment process. As part of the Storebrand Group, we adhere to overarching group principles on sustainable investments, combined with internal processes that operationalise our commitment to integrating sustainability risks. For further information about the integration of sustainability risks at group level, please consult the Storebrand website:

3. Governance and overview of sustainability

The formal responsibility for SKAGEN's sustainability commitments sits with our Board of Directors. The Board of Directors approves and reviews our ESG Policy and issues Power of Attorney to the portfolio team to exercise active ownership on behalf of the funds. Execution of our sustainability framework is delegated to the Investment Director and portfolio department, which also contains a dedicated ESG team.

The SKAGEN Board of Directors receives frequent updates on the exercise of active ownership by management.

There are formalised processes in place at Group level to assess exclusion and inclusion cases. The decision to exclude a company, and thus mitigate and prevent adverse impact, is based on the assessment of the issue by Storebrand’s Investment Committee. The committee comprises several representatives of the Storebrand Group senior management team and other executives, who meet on a quarterly basis. Companies will be excluded if the adverse impact and the breaches of our standards are considered severe and the risk of recurrence is assessed as high after engaging with the company on measures to prevent recurrence and mitigate the adverse impact.

4. Integration of Sustainability Risks in the Investment Process

Our approach to integrating sustainability risks in our investment process is built on four pillars: Exclusion, Enhanced due diligence of climate risks, ESG factsheets and Active Ownership. Each method is applied in different circumstances and leads to different investment outcomes. The full potential of a sustainable investment strategy is only realised when all four pillars are applied together. Exclusion sits at the start and end of the investment process. Each potential investment must be screened in advance to ensure that it complies with our minimum criteria. Further information about sustainability risks is provided for companies that pass the initial negative screening to be used in the construction of the investment case. Companies in high emitting industries are subject to an enhanced due diligence of climate risks. ESG factsheets ensure that material and company specific double-materiality (sustainability risks and adverse impacts) are considered in the investment case. When a company has entered our equity funds, it is routinely monitored through a quarterly ESG screening control process.

4a. Exclusions

Our exclusion criteria apply across all asset classes. It is of fundamental importance that companies we invest in follow international laws, norms and conventions. SKAGEN will not invest in:

Norm-based exclusions:

Conduct-based norm-breaches:

  • Companies that contribute to serious and systematic breaches of international law and human rights
  • Companies involved in serious environmental degradation, including the climate
  • Companies involved in systematic corruption and financial crime


Companies that produce or sell controversial weapons, including nuclear, land mines, cluster munitions, biological and chemical weapons

Mining operations that conduct marine or riverine tailings disposal.

Companies will be excluded if the breaches are considered serious and the risk of recurrence is assessed as high. 

Companies that derive more than 5% of their revenues from arctic drilling will be put on our observation list and closely monitored and engaged with based on our existing ownership

Companies involved in deep-sea mining until we have more scientific knowledge of the impacts of these activities

Companies will be excluded if breaches are considered serious and the risk of occurrence is assessed as high.

We also exclude investments in companies within certain single product categories or industries that are unsustainable. These products or industries are associated with significant risks and liabilities from a societal, environmental or health-related perspective. In these product categories there is also limited scope to influence companies to operate in a more sustainable way.

These product-based exclusions include:

  • Companies with more than 5% of revenue from tobacco
  • Companies with more than 5% of revenue from recreational cannabis
  • Companies with more than 5% of revenue from gambling
  • Companies with more than 5% of revenue from adult entertainment
  • Companies with more than 5% of revenue from coal related activities as well as companies mining more than 20 million tonnes of coal annually or that have over 10,000MW coal power capacity
  • Companies with more than 5% of their revenue from production and/or distribution of oil sands
  • Owners of palm oil plantations with unsustainable business practices
  • Companies that actively lobby against the goals of the Paris Agreement
  • Exclusion is to be used as a last resort and should only be applied where companies clearly fail to demonstrate change or improvements. If an excluded company demonstrates positive change that reduces the risk of recurrence, the company may be re-included in the list of companies we invest in.

The companies excluded because of the above-mentioned rules are listed on the Storebrand web page.

For sovereign bond funds, we exclude:

  • Sovereign bonds issued by countries that are systematically corrupt, severely neglect basic social and political rights, or that are subject to UN Security Council sanctions.

Observation list

An alternative escalation strategy against a company is to place it on a group-wide observation list. SKAGEN is dedicated to using its position to influence companies in a direction we believe is sustainable. In some cases, where we suspect violation of our policies, it may be beneficial to follow a company over time in order to gather more information. Likewise, there may also be cases where we see a company is working on corrective action, but such measures have yet to be fully implemented or are not yet verifiable. In such cases, we will place the company on an observation list, associated with specific restrictions, to allow for more time to gather the necessary information and influence the company in a more sustainable direction.

Companies that are under observation will be closely monitored and engaged with based on our existing ownership, and we will maintain a close dialogue with the company where we inform them of our expectations of measures and results. We expect the company to show improvement within a pre-determined time. Depending on the outcome, the company will either be excluded from our investment universe or it will be removed from the observation list.

While companies are present on the observation list, portfolios without prior holdings will be restricted from investing in the said companies. Portfolios with prior positions will be allowed to maintain these positions. However, the maximum portfolio weight will be limited to 1.2 times the original position as defined by portfolio weight from the date of observation status.

The companies on the observation list are listed on Storebrand web page.

4b. Enhanced due diligence of companies in high emitting industries

As sustainability is an essential factor in companies’ long-term financial performance, it is vital to provide our fund managers with the necessary tools to assess company-specific risks and opportunities. Whilst relevant across our selection of investment styles, the degree of relevance and integration may differ between funds. An assessment of material ESG risks is made for all equity investments as well as an indicative ESG risk rating for relative comparability with other companies and sectors. For companies that are in high emitting industries (see Sustainability Related Disclosures document for further information), an enhanced due diligence is made to assess company specific climate risks.

4c. ESG Factsheet

ESG factsheets summarises key material and company specific ESG factors in terms of potential risks, opportunities and engagement opportunities. The degree of relevance and saliency of these ESG parameters will vary from company to company, but are nonetheless identified to ensure that they are considered when we are invested in a company and exercises active ownership.

4d. Active ownership

SKAGEN believes in exercising our rights as shareholders. We employ two main ways of doing this. Either through voting at shareholder meetings or engaging – through direct dialogue – with the management and board members of our various holdings.

Both tools can be very effective in addressing concerns regarding environmental, social and corporate governance matters. Combined they can strengthen one another and be an effective signal to companies on where we stand on various important issues. We will therefore use both methods to influence companies’ behaviour over time.

The decision to engage with select companies is made based on our assessment of the significance of a particular matter, the size of the holdings, scope to effect change and the opportunity to collaborate with other investors. Dialogue with companies can be exercised by expressing views, in writing or orally, to the company's management on all levels, advisers, and Board of directors.

Active ownership is a key pillar for our equity products. We do not exercise active ownership for our fixed income products as they do not have voting rights nor do the products engage with their constituent holdings. Whilst our fund-of-funds products do not have voting rights, they nonetheless engage with external products on ESG topics.

Policy for Assessing Good Corporate Governance Practices in Investee Companies

SAM is a signatory to the UN PRI, which commit our funds to invest according to its principles. Assessing the corporate governance of an investee company is a company-specific process. We stay clear of investing into companies where we might be concerned that the corporate governance of the company might jeopardize the financial interests of our unit holders.

Cases for engagement

We will consider engaging with companies in the following cases:

  • Serious or systematic breaches of human rights
  • Corruption and bribery
  • Serious environmental and climate damage
  • Companies with a low sustainability rating in high risk industries
  • The company's strategy or results differ substantially from those previously communicated
  • Governance issues such as:
    • Replacement of directors
    • Equity issues and dividend policies
    • Remuneration of key personnel
    • Transactions between related parties
    • Diversity issues

In addition, we will also seek to engage with companies on climate change. For some of our funds – and given the nature of the investment style - the carbon footprint may vary substantially over time. Still, we are committed to working with our holdings to reduce their carbon footprint and operate more efficiently over time. Climate change is one aspect considered when monitoring companies and those companies lagging in their efforts to reduce their carbon footprint may be subject to engagement. We will engage with and encourage those companies that are in a position to improve to reduce their carbon footprint.

Engagement alternatives

If the outcome of the company engagement does not meet our expectations, we may consider other actions. If a company is on the observation list, we will make an exclusion assessment. For other companies, our actions may include:

  • Expressing our views publicly
  • Proposing resolutions at the annual general meeting
  • Suggesting an extraordinary general meeting

We may engage with companies in collaboration with other investors where this is believed to be in the interests of the unit holders.

When working with other investors to influence companies, we will be acutely aware of conflicts of interests and of being put in an insider position.


The framework for the use of voting rights for funds managed by SKAGEN is set out in Norwegian Regulations on Securities Funds Section 2-24 and in the industry recommendations from the Norwegian Fund and Asset Management Association.

The ultimate responsibility for execution of corporate governance in SKAGEN lies with the Board of directors. The daily execution is delegated to the portfolio managers of each fund and activities are reported back to the Board. The Board annually evaluates the execution of corporate governance. 

Guidelines for Voting

Voting rights must be exercised to the benefit of the fund in question, with the objective of securing the best possible risk-adjusted returns for unit holders. Normally, the portfolio manager assesses how the voting rights are to be used. In all cases where we vote, the respective portfolio manager familiarises him or herself with the matters to be discussed at the general meeting and decides how to vote. Voting rights are exercised directly by the fund management company or by using a proxy voting platform. For details see the Voting Policy (link).

SKAGEN typically votes against management in the following situations:

  • Inadequate information ahead of meeting
  • Quality of board and its members
  • Anti-takeover mechanisms
  • Needless or unfair changes in capital structure
  • Excessive executive compensation
  • Disclosure proposals related to climate change

Specific situations may call for a unique response and we will always take market and company conditions into consideration. To the extent that voting rights have been exercised in controversial cases or where we have voted against the board’s or management’s recommended course of action, we will disclose the voting rationale.

Voting Process

We have selected Institutional Shareholder Services (“ISS”), an independent service provider, as the platform for our proxy voting activities. ISS provides notices of general meetings and comprehensive information about the companies, the voting items on the agenda and recommendations. Funds managed by SKAGEN will vote according to our own voting policy, and always in what we deem to be the best interests of our unit holders. When we do not have a policy in place for a specific ballot item, we will typically follow the ISS recommendation. We will review the relationship with ISS on an annual basis, including the quality and effectiveness of the services provided. Each fund has a custodian approved by the Financial Supervisory Authority of Norway. The custodian bank also provides information related to general meetings. Our voting record is publicly available on our website and is disclosed in quarterly and annual sustainability reports.

5. Impact on returns

SKAGEN believes that companies that understand and utilise sustainability in their business strategy, will outperform their counterparts over the longer term. Integrating sustainability information is thus essential in order to achieve the best possible risk-adjusted returns for unit holders. It is only through investing sustainably that companies are fully able to identify risks and opportunities arising from environmental, social and governance factors. A sustainable approach to investing is also important if we are to be good long-term stewards of our clients’ capital. Integrating sustainability factors into our investment process allows us to make better informed investment decisions and provides a more comprehensive view of each individual investment case.

Each of the four pillars that make up our framework for integrating sustainability risks into the investment process, contribute to managing sustainability risks and therefore also preventing potentially negative impacts on returns. Negative impacts on returns can be caused by business factors, but also by company controversies negatively impacting the share price of the company in question.

The impacts of sustainability risk may be numerous and vary depending on the specific risk, asset class and region. The assessment of the likely impact of sustainability risks on the return of the funds will therefore depend on the type of securities held in the portfolio. With regard to equity securities, sustainability risks may affect the price of a stock, result in the need to raise capital or impact the issuer's ability to pay dividends. The funds may be able to avoid or mitigate the sustainability risks mentioned above to some extent through the application of the ESG Policy.

6. Adverse Sustainability Impacts

SKAGEN relies our ESG Policy, affixed to the broader Group Investment Policy, in the negative screening of potential investments to manage potential adverse impacts that can result from the fund's investment activities.

7. Conflict of interest and inside information

We are dependent on access to information about companies in order to assess any corporate governance challenges that they may have. It is also important to retain flexibility with respect to the funds' investments so that we can act in the best interests of the unit holders. We have a clear understanding of the information received in relation to the rules on inside information, also in relation to the exercise of corporate governance.

It is expected that companies and their advisors are also familiar with this legislation and do not put SKAGEN in an insider position without consent.

If in doubt it should, insofar as possible, be clarified by the declarant whether the relevant information is inside information before it is received.

8. Remuneration Scheme

The SKAGEN remuneration scheme is determined by the company's Board of Directors and is reviewed and checked by the company's internal auditor on an annual basis. The company's remuneration scheme is designed to promote good and efficient risk management and ensure that management acts in accordance with the investment mandates of the mutual funds managed and prevent risk taking that is incompatible with the funds' investment strategy. Sustainability risks is a specific risk metric and it informs the remuneration of employees directly exposed to managing sustainability risks – at entity and/or product level. Furthermore, the scheme must ensure accountability and a long-term perspective.

All SKAGEN employees have a fixed remuneration and the possibility of variable remuneration. Variable remuneration for compliance and risk managers is not based on the company's operating profit, but on the basis of individual assessment.

9. Reporting

To ensure open and honest communication, and in order to allow stakeholders monitor the implementation of our ESG Policy, we will:

  • Fulfil PRI's reporting requirements, and publish results accordingly
  • Report on excluded companies on a quarterly basis
  • Report on companies on our observation list on a biannual basis
  • Publish relevant key performance indicators, targets and results for investments annually
  • Update stakeholders on key initiatives via our website and annual reports

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager’s skills, the fund’s risk profile and management fees. The return may become negative as a result of negative price developments. There is risk associated with investing in funds due to market movements, currency developments, interest rate levels, economic, sector and company-specific conditions. The funds are denominated in NOK. Returns may increase or decrease as a result of currency fluctuations. Prior to making a subscription, we encourage you to read the fund's prospectus and key investor information document which contain further details about the fund's characteristics and costs. The information can be found on Storebrand Asset Management administers the SKAGEN funds which are by agreement managed by SKAGEN's portfolio managers.