· Climate: Additional activities such as exploration and drilling, linked to fossil fuel extraction, are excluded (O4).

· Climate: Companies operating within industries that emit a lot of greenhouse gases must meet set thresholds and show that they are among the best in their sector (O13). Read more in the section on inclusion.

· Biodiversity: If companies in relevant industries receive a poor rating in the sustainability analysis, which is required for all holdings, the fund shall: (a) seek to influence the company to reduce its negative impact and (b) disclose a summary of the situation in its sustainability report (O14, O18).

· EU Taxonomy: The taxonomy must be part of the sustainability analysis (O12) and the model used by the Fund to include the better companies (O15). Funds that invest in companies that are aligned with the taxonomy are rewarded with points (P1).

When many savers, professional investors, and fund managers join forces to exert influence, Nordic Ecolabelling is convinced that this will have an effect. Nordic Swan Ecolabelled funds have potential to make an impact by complying with the following: The requirements are divided into four areas.

1) Exclusion: The fund must refrain from investments in certain industries and activities that are particularly problematic (O4-O11). Read more about our exclusion requirements here.

2) Inclusion: The fund must perform a sustainability analysis of all holdings and prioritise the better companies from a sustainability perspective. The EU Taxonomy shall be taken into account in the context of the sustainability analysis. Read more about our inclusion requirements here. (O12-O15)

3) Transparency: The fund must regularly disclose which shares and bonds, etc. are held by the fund (O17) and issue an annual report on the sustainability activities of the fund (O18).

4) Active ownership: The fund engages with its holdings (P3). This is a points-score requirement, as it might not always be relevant to conduct engagement, but company dialogue is mandatory when holdings are suspected of violating international norms and conventions (O16). The fund shall meet 23 obligatory requirements. In addition to the obligatory requirements, the fund must collect a minimum of 6

(5 for bond funds) out of 14 points from a group of points-score requirements.

We have gathered questions and answers about which companies are excluded from Nordic Swan Ecolabelled funds here.

We have gathered questions and answers about how a Nordic Swan Ecolabelled fund should select / include holdings here.

In connection with the application, Nordic Ecolabelling audits the fund manager's systems and processes. The fund manager shall:

· document clear processes for how companies are excluded and included in line with the Nordic Swan Ecolabel criteria.

· demonstrate that the requirements for transparency and active ownership are met.

· demonstrate supporting documentation for calculations, sustainability analyses, and the taxonomy alignment of companies. Ecolabelling Sweden performs an on-site inspection as a part of the licensing process and conducts regular checks during the licence period.

No, there may be companies that are not perceived as sustainable. For example, companies that are in a process to become more sustainable, regulated by given transition criteria.

A Nordic Swan Ecolabelled fund must exclude companies and industries that are furthest from sustainable. Most of the fund’s assets, 70%, shall be invested in companies with strong sustainability practices. Stricter requirements are set on companies operating in industries that are strategically important for reducing carbon dioxide emissions and preserving biodiversity.

The Nordic Swan Ecolabel does not assess individual companies. However, the Nordic Swan Ecolabel criteria govern how the fund manager shall analyse and assess companies. This means that the least sustainable companies are avoided, and the more sustainable companies are selected.

Within one month, the fund manager must describe the situation in general terms on its website. Within three months, the fund manager must initiate an engagement process with the company. Also, the fund manager must disclose on its website:

· more information on how the fund assesses the situation;

· what measures the fund manager will take to resolve the situation;

· what results the fund manager aims to achieve;

· when the fund manager expects that the situation will be resolved.

If the fund manager fails to change and resolve the situation, the holding shall be sold off within 24 months. The strategy of selling questionable holdings immediately can sometimes have adverse effects. Nordic Ecolabelling thinks that trying to engage with such holdings can lead to better outcomes in the long run. (O16).

All long-term indirect holdings (e.g. other funds and the like) must meet all exclusion and inclusion requirements. Short-term indirect holdings needed to manage the daily operations of the fund are allowed up to 5% of the without meeting all requirements.

The Nordic Swan Ecolabel has no requirements linked to the financial return or risk associated with fund investments. The Nordic Swan Ecolabel only sets sustainability-related requirements.

The Nordic Swan Ecolabel has no requirements linked to the management fee charged by the fund company. In 2020, Nordic Ecolabelling examined the fees of Nordic Swan Ecolabelled funds. The survey showed that, on average, Nordic Swan Ecolabelled funds do not have a higher fee than non-ecolabelled funds.

The current production and consumption patterns in our world are not sustainable. Nordic Swan Ecolabelling is convinced that funds have an important role to play in influencing companies to work more sustainably, as funds control significant capital assets.

There is a strong demand for an independent and reliable evaluation of funds, both among consumers and investors. A Nordic Swan Ecolabelled fund represents a sustainability-labelled alternative for savers and professional investors, and an instrument for fund management companies to show that their funds fulfill stringent requirements.

The fund manager shall:

· openly report all holdings on its website: shares, bonds, etc. The list of holdings must be updated at least once a quarter. (O17)

· present the fund's activities in a sustainability report: e.g. exclusion and inclusion of holdings, engagement and voting activity. The sustainability report must be updated at least once a year. (O18)

When many savers, professional investors, and fund managers join forces to exert influence, we are convinced it will have an effect. Nordic Swan Ecolabelled funds have good opportunities to exert influence by:

• providing markets with a clear stance on which sectors and companies that are not sufficiently sustainable.
• requiring sustainability data for analysis and for investing a majority of assets in companies with strong sustainability activities
• openly reporting the fund's holdings every third month.
• openly reporting annually on the fund's sustainability work.
• practicing active ownership by voting and being in direct dialogue with companies.

The Nordic Swan Ecolabel for investment funds builds on four ways in which funds can influence companies:

Exclusion: The fund must refrain from investments in selected industries and companies that are furthest from sustainable. Read more about our exclusion requirements here.

Inclusion: The fund must conduct a thorough ESG analysis of possible investments and select better companies from a sustainability perspective. Read more about our inclusion requirements here.

Transparency: The fund must regularly report on its actual holdings and publish an annual report on the sustainability activities of the fund.

Active ownership: Nordic Ecolabelling encourages funds to be active owners, which include voting at annual general meetings and engaging with portfolio companies. This is a points-score requirement, as it is not always relevant to exercise active ownership.

The fund must fulfill 25 obligatory requirements. In addition to these, the fund needs to collect a minimum of 6 out of 16 points from various points-score requirements (5 out of 16 for bond funds).

The Nordic Swan Ecolabel can be awarded to funds that, in a credible and well-documented manner, can present a robust methodology meeting all requirements set by Nordic Ecolabelling. An index fund is designed to track the performance of a market index as closely and cost-efficiently as possible. Index funds can meet the requirements of Nordic Ecolabelling by investing in an index that selects companies in line with the criteria.

Yes, but the maximum share of indirect holdings that lack a sustainability analysis is restricted to 5 % of the fund, as an important purpose of Nordic Swan Ecolabelled funds is to influence companies in a more sustainable direction. A larger ratio of indirect holdings is permitted if it is ensured that these holdings also fulfil all other requirements.

Nordic Ecolabelling has no requirements related to the fund's return or risk profile. But in the long run, we are convinced that investments with a sustainability profile will be worthwhile.

We have gathered some questions and answers about the new EU regulations here.