Climate efforts intensify as DNB AM engages in a domestic network on mitigation risks and opportunities

BANK-OWNED ASSET MANAGERS' ESG ASPIRATIONS: DNB Asset Management has increased its efforts against climate change in the past 12 months. Both by being a part of the Task Force on Climate-related Financial Disclosures (TCFD) investor pilot project, and through active ownership engagements focusing especially on Norwegian companies that are highly exposed to climate-related risks and opportunities.

Photo: Nasa/REUTERS / X00653

As the EU Action Plan for Sustainable Finance makes its way through EU legislative processes and implementation phase, DNB Asset Management (DNB AM) Head of Responsible Investments Janicke Scheele expects climate change risks and opportunities and environmental issues to remain high on the responsible investment agenda.

Over the past 12 months, efforts around climate change have intensified at DNB AM.

Last year, the Norwegian EUR 61bn asset manager published an expectations document on climate change that is used when engaging with companies on the issue.

"We have met, or will meet, with companies in which we have large holdings, or companies that score low on climate change mitigation," Scheele says to AMWatch. "The expectation document is based on TCFD recommendations but also take a just transition into account."

"The expectation document is an important part of our standard-setting work. We communicate our expectations to companies around best-practice and use it as a starting point for dialogues with companies on these topics both proactively and reactively,” she continues.

Along with a group of twenty of the world’s leading investors, DNB AM joined the UNEP FI TCFD Investor Pilot Project in April 2018.

The investors developed a methodology for scenario analysis to measure the different climate scenarios’ financial impact on companies and portfolios. In May 2019, the pilot project presented its report ‘Changing Course’ - a guide to assess the impact of climate change and climate action on global investment portfolios. 

"We contributed to the methodology development and presented a case study in the report demonstrating how the results of the scenario analysis can be used to give signals about climate change impacts and as a useful engagement tool,” says Scheele.

A Norwegian standard for TCFD reporting

As a specific focus area, DNB Asset Management - along with other Norwegian investors – has joined a TCFD working group targeting listed Norwegian companies, especially companies in sectors that are highly exposed to climate-related risks and opportunities.

The purpose is to set standards for disclosure of climate-related risks and opportunities in the Norwegian market.

"We discuss the expectations that we have for the companies," says Scheele, adding that most companies have welcomed the initiative.

Moreover, the company is part of the investor collaboration Climate Action 100+.

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