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10 Years with UN Principles for Responsible Investments for a Better World

02.27.2019

The goal is short and good - a better World. The UN is the driving force behind an increasing amount of the World’s funds and capital being invested by responsible principles and businesses following a more ethical, responsible and sustainable pass. BankInvest has for more than 10 years worked with the UN Principles for Responsible Investment.

Af Jesper Børre Mangelsen og Mads Berendt Søndergaard

Denmark and Danish companies as, f.i., Novo Nordisk, Danfoss and LEGO are known for leading the way, when it comes to expressing social responsibility and running a proper business management.

Yet, it is not the case at all places. Looking globally, companies are found, where business ethics are jamming, and also states are found that violate elements of human rights.

However, the World Organization, UN, has over the past 10-15 years been a strong driving force behind a more responsible development in terms of social, environmental and managemental matters in the companies of the World.

In 2005, the UN's so-called 10 Global Compact principles were decided to influence the development of the companies towards greater social responsibility. Global Compact is a set of principles that the participating companies undertake to comply with human rights, labour rights, environment and anti-corruption.

Pri Taske3

The UN Global Compact principles can be supplemented by the guidelines of OECD for multinational corporations, ILO’s labour market conventions and the UN human rights declaration.

In addition, in 2006, the UN published six Principles for Responsible Investment (PRI), which have since become highly important to the way investors - from investment associations, state-funded pension funds to ordinary private investors - today invest funds and capital in the companies. Today, the PRI has 1,904 members, of which 27 are Danish.

Whilst PRI applies broadly to, for instance, investment banks, asset managers and investment associations, which have investments as their main business, the UN Global Compact aims towards the social responsibility of the companies.

Denmark's prominent role in CSR (business ethics) and responsible investment over many years has also been recognized by the UN and the World community.

Thus, in 2015, the UN appointed Dane Lise Kingo as Executive Director of the organization behind the UN’s Global Compact, which comprises more than 8,000 companies and 4,000 other organizations in 170 countries. In Denmark 270 companies have joined the UN's Global Compact. Lise Kingo is the former Executive Vice President of Novo Nordisk with responsibility for CSR.

"The fact that the international community through the UN agreed on principles for responsible investment and the Global Compact principles has had a very significant impact on the development over the past 10 years. Today, funds are being invested for a growing three-digit trillion amount according to responsible principles, and it has put irresponsible companies and states under heavy pressure because investors are demanding accountability," says Lars Bo Bertram, CEO of BankInvest.


BankInvest Joins Since the Beginning

BankInvest has been taking a part in PRI almost since the beginning, when BankInvest signed the UN Principles for Responsible Investment as one of the first Danish asset managers and investment associations in Denmark, over 10 years ago, on 11th of February 2008. Thus, BankInvest committed itself to following the six basic principles of the investment approach. Principles that have ever been applicable to the entire BankInvest investment process.

Pri Signed
The original document containing the six principles constituting the UN PRI was signed by BankInvest in February 2008, and UN PRI registered BankInvest's membership from 11th of February 2008.


The majority of large Danish investment associations have today signed the UN's Principles for Responsible Investment (PRI).

But why has BankInvest and other Danish asset managers committed themselves? - According to Lars Bo Bertram, it is both, a matter of supporting the good initiative of UN and running business professionally:

"When BankInvest incorporates PRI into our investment processes, it contributes to balancing all available information about a company that we are considering to invest in. We look not only at the financial and the economic data, but also, for example, at environmental and social conditions and the way the company is managed. These factors also have a major impact on the value of a company being either created or destroyed. Therefore, it is a common sense to incorporate the so-called ESG issues in the investment processes, says Lars Bo Bertram, who is also Chairman of BankInvest's Responsible Investments Committee.


Increase in Responsible Investments

In general, there is an increasing focus on responsible investments - both, customers and investors, the media and politicians, are increasingly interested in the principles behind investments.

Ole Buhl is a Head of the pension fund’s, ATP's, Corporate Social Responsibility and a Board Member of Dansif, a network forum for professional investors and others who work with responsible investments in Denmark. He believes that responsibility is high on the agenda these years due to the fact many people have realized that, as long-term investors, they will benefit from the companies in question acting responsibly.

"The consideration for both, returns and corporate social responsibility, will often pull in the same direction when investing long-term. If a company does not act responsibly, it can affect its value adversely. Conversely, implementation of corporate social responsibility can limit risks and create business opportunities that can contribute to an increase of the value of the company and, thus, benefit the investment itself", says Ole Buhl.


Responsible Investment Committee

BankInvest's work with responsible investments is rooted in the internal committee for responsible investments. The Committee meets at least four times a year to, among other things, coordinate the implementation of the guidelines of the UN Principles for Responsible Investment and discuss issues relating to responsible investments and active ownership. In addition, the Committee also has a decision-making power to exclude companies in BankInvest's portfolios if a company does not comply with BankInvest's responsible investment policy and is not willing to change its behaviour.

Moede1

The Committee is constituted by the CEO, who is also the Chairman of the Committee, as well as the Investment Director, the Investment Management Director, the Client Director, the Bond Manager, the Stock Manager, the Communications Manager and the SRI Responsible.


You can read more about BankInvest's work on ethics and responsible investments here on our website:

» Responsible Investments
» Socially Responsible Investments (SRI)
» Principles for Responsible Investment

 

Last updated: 02.27.2019

UN Principles for Responsible Investments

The PRI organization is a private network organization that works to disseminate six principles for responsible investments.

The PRI was founded in April 2006 on the initiative of the then Secretary General of the United Nations, Kofi Annan. He invited some of the largest institutional investors and asset managers in the World to jointly develop the United Nations Principles for Responsible Investment.

The principles were launched by a group of international investors in 2006 with the support of the two UN partners: UNEP FI and UN Global Compact.

In 2008 BankInvest was among the very first Danish members who signed up under the standards and among the 350 first members internationally.

Today, there are over 1,900 companies that have signed the principles, which in total manage assets for over $ 68 trillion.


The fundamental idea of PRI is that information on environmental and social issues, as well as good corporate governance, can also affect investors' returns. Here, an English term, ESG, is used that stands for Environment, Social og Governance.


The six Principles for Responsible Investment are:

We will incorporate ESG issues into investment analysis and decision-making processes.

We will be active investors and practice ESG issues into our investment policies.

We will seek appropriate disclosure on ESG issues by the entities in which we invest.

We will promote acceptance and implementation of the Principles within the investment industry.

We will work together, where it is possible, to enhance our effectiveness in implementing the Principles.

We will each report on our activities and progress towards implementing the Principles.