Tougher requirements for the 32 billion EUR in Nordic Swan Ecolabelled funds
Today the Nordic Swan Ecolabel’s new criteria generation for funds and savings products are being launched. The first generation criterias were launched in 2017 and the total value today amounts to 33 billion EUR.
– The impact on the fund market is a proof that the Nordic Swan Ecolabel has reached out to both to the financial industry and to savers. In this way, we want to influence companies to become more sustainable and contribute to the sustainable development goals. Now we have new criteria that will continue to drive development, says Per Sandell, Head of Financial services at the Nordic Ecolabelling.
A Nordic Swan Ecolabelled fund is a way for savers to influence companies to change and become more sustainable:
- Excluding the least sustainable industries: production of coal, oil, weapons, and tobacco.
- Including companies with strong sustainability practices and influence companies in a transition phase to increase the pace to become more sustainable.
- Transparency, dialogue and active ownership are also important areas.
All companies in the fund must undergo a sustainability analysis. If any holding breaches the Nordic Swan Ecolabel’s requirements, the saver receives information about what measures will be taken. If the company does not change its behavior, the holding must eventually be sold off. For the requirements to be up-to-date and driving, the Nordic Ecolabelling regularly tightens the requirements for the NordicSwan Ecolabel. Three of the new requirements:
- Stricter climate requirements: companies in industries with large emissions of greenhouse gases, such as the cement and the steel industry, must meet transition requirements and show that they are among the best in their sector.
- Requirements for biological diversity: If the company receives a poor rating in the sustainability analysis, which is required for all companies in a Nordic Swan Ecolabelled fund, the fund shall: 1) attempt to influence the company to reduce its negative impact and 2) report about the situation in its sustainability report.
- EU Taxonomy: The EU Taxonomy should be a part of the analysis and model used by the fund to include the better companies. Funds that invest in companies that are aligned with the taxonomy are rewarded with points.