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Investment Funds 101

The Nordic Swan Ecolabel gives consumers guidance to funds that have taken on the role of influencing companies to act more sustainably. All the Nordic Swan Ecolabelled fund has to do is

  • opt out the worst companies and industries
  • opt for more sustainable businesses, and 
  • act transparently. 

In  doing this the Nordic Swan Ecolabelled fund will influence companies to act more sustainably on a long term.

Learn more about funds on our Investment Fund site

Regardeless if you are an investor that wants to invest your money in sustainable funds or of you are a fund provider who wants to Nordic Swan Ecolabel your fund, you will find lots of information on our fund site.

  • Fees from June 15th, 2017 until further notice

    Application fee:

    Application fee including one on-site inspection within the Nordic countries

    3 000 EUR (per fund) excl. VAT.

    Index funds:
    2 000 EUR (per fond) excl. VAT. Index funds shall base their application on an index that has been evaluated och approved by Nordic Ecolabelling.

    Index providers:
    125 EUR per hour excl. VAT.

    Renewal fee 1 500 EUR (per fund) excl. VAT.

    Annual licence fee:

    Annual Nordic licence fee The annual licence fee is based on the size (AUM*) and the ongoing charges of the fund.

    The licence fee is determined by calculating the average AUM held by Nordic unitholders (during the period of the year when the fund has had a valid Nordic Swan Ecolabel license). VAT is added.

    Ongoing charges of fund | Licence fee
    ≥ 1.00%   0.0015% of AUM
    <1.00 %   0.0014% of AUM
    <0.80%    0.0013% of AUM
    <0.60%    0.0012% of AUM

    * Assets Under Management

    Annual fee, index providers 1 500 EUR (one-day inspection) + travel costs. Please refer to "Fees for on-site inspections". If more than a working day is required for the inspection, an extra fee of 125 EUR per hour is charged.
    Minimum fee for a Nordic license 1 500 EUR per year excl. VAT
    Maximum fee for a Nordic licence 10 000 EUR per year excl. VAT and 100 000 EUR per group, at a minimum 2 000 EUR per fund.

    NB! Funds can also be marketed with the Nordic Swan Ecolabel outside the Nordic countries. The licence fee is based on the AUM that Nordic unitholders hold in the Nordic Swan Ecolabelled fund.

    Fees for extensions/alternation of the licence:

    Extension/alteration of existing licence Fees will be charged according to how long it takes to deal with the matter:
    - Less than 4 hours: 375 EUR excl. VAT
    - Between 4 and 8 hours: 750 EUR excl. VAT
    - More than 8 hours: 1 500 EUR excl. VAT

    Fees for on-site inspections:

    Extra fee for additional on-site inspection within the Nordic countries 500 EUR excl. VAT per visit
    On-site inspection outside the Nordic region, but within Europe *) 1 500 EUR excl. VAT per visit
    On-site inspection outside Europe *) 2 500 EUR excl. VAT per visit

    *) There is an extra fee of 1 000 EUR per day, if the inspection takes more than one day.

  • Information on the latest version of the criteria for investment funds

    1.0 ⇛ 1.1: Alteration of criteria

    The Nordic Ecolabelling Board decided on 14 March 2018 that qualified non corporate green bonds can be included when the applicant shows that the fund can apply for a license. The new version is called 1.1.

    1.0: Adoption of criteria

    The Nordic Ecolabelling Board decided on 14 June 2017 to adopt criteria for investment funds. Version 1.0 is valid until 30 June 2020.

     

  • We are so happy you decided to send in an application for the Nordic Swan Ecolabel!

    This is a general description of how the application process looks - from thought to approved licence.

    It is possible to Nordic Swan Ecolabel most types of funds. But unfortunately, not all. So, before you start applying, it will be wise to check that your fund really can be Nordic Swan Ecolabelled.

    Note that brand-new funds, which have not yet entered the market, can be approved and Nordic Swan Ecolabelled from the first day they are on sale. If you want your fund to be Nordic Swan Ecolabelled right from the start, it is very important that you contact us as early as possible in the development of the new fund.

    To be able to start an application, the following three things must be fulfilled:

    • The fund must work according to UCITS.
    • The fund must be registered for distribution in at least one Nordic country.
    • The fund may hold max, as an average over one year, 50% bonds that are not issued by companies.

    If the fund meets the above, the application process is as follows:

    1. Download the criteria document, read through and form an idea of ​​the conditions that you believe your fund has. Pay special attention to how the respective requirements should be documented. If questions and concerns arise - contact us and we will talk about it all.
    2. Now you should have a feeling for whether the fund can meet the requirements or not. Fill in and submit the application form, if you have not already done so, to ansokan@svanen.se
    3. Get started and collect the documents we need to be able to check to be sure the requirements are met. The more evident and detailed documents we get, the smoother our management will be and the fund can be approved faster. Therefore, consider the following:
      • Always use this checklist for each fund. The checklist must be attached to the application.
      • Be sure to name the documents clearly. Keep in mind that one and the same document can often be designed to meet several requirements.
    1. Keep in mind that you will probably need to involve your subcontractors in one way or the other, so contact them at an early stage to make the process as smooth as possible. This is especially important for index funds.
    2. Submit the documentation. You do not have to wait until you have collected all the documentation, it is possible to collect documentation for some requirements and submit them. Your advisor will give you feedback as soon as possible. Note that you will not be approved until all requirements are met. When everything seems to be in order, your advisor will make a visit to your company.
    3. Done! Your fund is now approved and you can market it with the Nordic Swan Ecolabel.

    How long does it take to get a Nordic Swan Ecolabel licence?

    Be well in advance with your application, preferably at least 6 months before you wish to receive your licence from us. If you have never had a Nordic Swan Ecolabel licence before, it is advisory to plan for an even longer application process, and we recommend that you contact us for a joint planning of the process.

    Application valid for one year

    If the applicant company does not actively work with its application, Ecolabelling Sweden, after one year, has the right to decline it.

    We wish you luck with your application and, most importantly, your work towards a more sustainable world!

    For more information: "Application step by step"


Q&A on Nordic Swan Ecolabelled funds

There are lots of questions about Nordic Swan Ecolabelled funds. Why has Nordic Ecolabelling chosen to ecolabel investment funds in the first place? What requirements must be fulfilled? How are the funds evaluated? What companies are allowed in a Nordic Swan Ecolabelled fund? What companies are NOT allowed? Below you can find a comprehensive Q&A about Nordic Swan 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.

  • 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).

  • In conjunction with the application, Nordic Ecolabelling inspects the fund manager on-site. The manager must document clear processes for how companies are disregarded and selected in accordance with the Nordic Ecolabelling requirements. They must also document and show that the requirements concerning transparency and active ownership are fulfilled. During the evaluation process, data used for calculations, as well as environmental, social and governance (ESG) analysis reports and other relevant documentation confirming compliance with the requirements, must be presented for examination. Nordic Ecolabelling performs an on-site inspection as a part of the licensing process and make regular controls during the licence period.

  • No. A Nordic Swan Ecolabelled fund must exclude companies and industries that are furthest from sustainable and the fund must invest a majority of its assets in companies with a strong performance on sustainability. This does not mean, however, that all holdings of a Nordic Swan Ecolabelled fund will be perceived as “sustainable”.

    Nordic Ecolabelling does not review and assess every company in a fund. Instead, we set up rules for how the fund manager should think, analyze and assess. In this way, the most problematic companies are avoided, and many of the “best” ones are selected. We are also convinced that we can achieve an effect by applying our requirements of analysis, transparency and active ownership. Moreover, it is possible to collect points by investing in companies operating in “green” industries such as renewable energy, energy efficiency, waste management, and organic agriculture.

  • In that case, the fund manager must either sell the holding or notify how they intend to handle the situation to influence the company. Information must be published on the fund's website within three months, with details of how the fund management company assesses the situation, what they will do to influence the company, which results it is possible to achieve, and when the situation can be expected to be resolved. If the fund manager does not manage to influence the company to rectify the situation, the holding must be sold off within 24 months.

    A strategy of selling dubious holdings directly can sometimes have adverse effects. Retaining and engaging with the company instead may even yield more constructive results.

  • 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 sets a requirement that the fund must be transparent with all holdings. On its website, the fund manager must report which shares and bonds are held in the fund and update the information once a quarter. At least once a year, the fund management company must present a report describing the sustainability activities of the fund. For example, how the fund has excluded, included, voted, and conducted dialogue with companies in which the fund holds shares.

  • 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.

Contact us for more information