Ownership responsibilities
and sustainability

Sweden has a large and important fund market. Ownership responsibility is far-reaching. Sustainability is an extension of owner’s liability.

The Swedish fund industry agrees on reporting of carbon footprint

In May of 2016 the Swedish fund industry agreed on a method of reporting carbon footprint for the funds' holdings.

Read more here.

New sustainability review will help investors compare fund companies' sustainability work

The Swedish Invesmtent Fund Association has initiated an industry standard in Sweden for reporting the fund management companies' sustainability work. The Sustainability review is aimed at savers and gives an overview of how the the fund management company works with sustainability issues along with concrete follow up how this work has been done in practice during the previous year.

The sustainability review at fund management company level shall be updated annually and shall be easily accessible on the fund management company’s website. The aim of the review is to increase the transparency and comparability of fund management companies’ work with sustainability issues. The goal is also to contribute to increased knowledge about fund management companies' sustainability work in practice.

The sustainability review is a tool that facilitates for all fund management companies to report their sustainability work. For the larger fund management companies, the sustainability review will be a complement, for the smaller it will represent a minimum level of information on the fund management company's sustainability efforts. 

The sustainability review requirement comes into force as of the 2016 operating year, i.e. the first review must be published no later than March 2017. Earlier publication is voluntary.

The requirement has been incorporated into the Association’s guidelines for marketing and information by fund management companies.

Fund managers take ownership responsibility on savers’ behalf

Sweden has a very substantial investment fund market that plays an important role for society, households and companies. Managing savers’ money is a position of trust and ownership responsibility is far-reaching.

An important part of the fund management companies managing responsibility is to represent investors in ownership matters. The ownership role shall be exercised exclusively in unitholders common interest, which means striving for the best possible return with regard to the fund’s investment policy and risk level and, where appropriate, to the specific criteria established for the fund.

Work relating to Nomination Committees, including the appointment of Boards of Directors and Members, is an important element of the fund management companies’ work in acting as shareholders.

Exercising voting rights in companies in which the funds are major shareholders is another way of exerting influence in their role as shareholders. As major owners, the fund management companies can also exert influence through dialogue with the companies, and the investment fund sector thereby helps ensure the long-term healthy development of the companies in which the funds invest and of the financial markets.

Ownership policy a must

All fund management companies must, under the provisions of the Swedish Code of Conduct for fund management companies and the Association’s Guidelines for investment fund managers as shareholders, draw up an ownership policy. Fund management companies shall also work to ensure that the companies in which the fund invests comply with the requirements of the Swedish Corporate Governance Code.

Sustainability an extension of owner’s liability

The investment fund sector, in its role as shareholders, works to encourage the companies in which it invests to take sustainability issues into account, thereby contributing to sustainable development.

 Sustainable and responsible investment means working to ensure that the companies in which the fund invests take sustainability issues into account and that they provide details of their ESG work.

Including a risk management component that takes these factors into account as part of the overall management approach generates the potential for a good, long-term return.

Every fund manager must decide how to conduct its own sustainability work as part of a functioning competitive climate. It is important to make things easy for savers by providing clear details of the sustainability work and how it is conducted.

The role of the Swedish Investment Fund Association is to promote increased know-how and good consumer information, transparency and comparability.

The Association has initiated a sustainability review at fund management company level, with annual follow-ups of the fund management company’s sustainability work. In 2015, the Ethical Fund Marketing Committee (ENF) updated a position paper on the rules governing the marketing of funds with special sustainability considerations. This update has been incorporated into the Association’s guidelines. The Government’s Investment Fund Committee has also been tasked with proposing measures that will improve information and comparability in relation to fund management companies’ work with sustainability issues, while the Nordic Council has raised the possibility of introducing an eco-label for funds in cooperation with the sector.

Widespread support of PRI

The vast majority of the Swedish Investment Fund Association's member companies, have either directly or through group affiliation, signed up to the six principles for responsible investments of the UN initative PRI.

The Association was one of the first bodies to be granted the status of PRI Network Supporter, which meant the Association undertook to work to disseminate the principles of PRI.

The aim of PRI is for the principles to form a foundation for long-term responsible ownership.

The Sustainability Profile from Swesif

The Sustainability Profile, in which the fund management company describes how the fund applies sustainability criteria in its management, is a voluntary complement to the

KIID. The profile can make it easier for savers to compare funds but is not, in and of itself, an eco-label. The Sustainability Profile has been drawn up by Swesif – a forum for sustainable investments in Sweden.

Fund management companies’ Sustainability Profiles can be viewed at the Hallbarhetsprofilen.se website.

Print Share this page