In addition to setting up a new team to work with sustainability in the investments, in September 2019, we initiated a corporate sustainability project with members from across the organisation. The group is working to identify areas of development and improvement with regard to all aspects of sustainability in the company. You can find out more about this in our annual sustainability report for 2019.
We are now starting to report on our sustainability efforts on a quarterly basis. This is an important step in make communicating all our progress – be it large or small – in sustainability matters.
"We see that the important role played by the finance industry in the sustainable development of society is generating a lot of attention. Many of our clients are interested in knowing our stance on sustainability themes," says SKAGEN's sustainability specialist, Sondre Myge Haugland.
SKAGEN owns just a fraction of the world's 600,000 listed companies through its funds' investments. Nonetheless, we feel it is important to contribute, amongst other things by avoiding investing in certain products or branches, in accordance with our sustainability policy.
One of SKAGEN's strengths lies in active ownership, and we have a long tradition of engaging with companies and influencing them to make improvements. We can thus create financial value for our clients, at the same time as contributing to improve environmental, societal and governance conditions.
SKAGEN has great ambitions and engages with each of the companies the funds invest in. We are currently in active dialogue on eleven ESG-related topics with our portfolio companies. During the quarter, we met with Samsung, which has had a positive start to the year with the formation of an outside compliance monitoring group. We also continued our dialogue with an automobile company on their human rights’ due diligence framework, both in terms of their clients and suppliers. We also engaged with companies to promote shareholder democracy and minority shareholder interests.
The latter part of the quarter was dominated by the unprecedented disruption caused by the Covid-19 outbreak. With companies’ attention understandably focused on responding to the economic and social implications of the pandemic, they had less capacity than usual to discuss longer-term ESG improvements. Since physical meetings have been out of the question, we have continued to engage with several of our holdings via video, email and phone.
Another way of exerting our influence is by using our voting rights actively at general meetings. So far this year, the funds have voted at over 90% of the items at general meetings. Combined with dialogue with companies, voting is often an effective way of achieving sustainable change over time.
The post-pandemic world
"The big question these days is how our development towards a sustainable future will be influenced by the Covid-19 pandemic. I think that the importance of social issues will likely be elevated and addressed. Previously, sustainability has largely focused on climate issues, but employee conditions and wage gaps will now be lifted higher on the agenda," says Sondre.