Jyske Capital's target is to be a distinguished and established Danish asset manager with excellent results in the areas of generating returns and managing risk. We always incorporate responsibility into our investment decisions. This also includes the environmental, social and governance (ESG) aspects of investment.
Integrity and common sense are among our core values and are respected in all our actions - also in our approach to the companies and countries that we invest in. ESG considerations are increasingly an important parameter in our investment decisions, and we are aware that this is also the case for many of our clients and other stakeholders.
At Jyske Capital, we have a systematic approach to ESG aspects of investment. Our approach to responsible investment is structured at two levels: compliance with legislation and corporate social responsibility - including adoption of the principles for responsible investment, mainly under UN PRI, cf. below.
We find that responsible investment contributes to generating a good risk-adjusted return for our clients. Partly because our approach contributes to effective management of the risk, partly because it potentially contributes to releasing value potential in the companies in which we are active owners.
Jyske Capital complies with the legislation in the investment area. That Denmark has acceded to the Ottawa Treaty and The Convention on Cluster Munitions (CCM) regulate, e.g., our investment in production and/or sale of weapon. The conventions do not comprise a general ban on investment in weapon-producing companies, but exclude investment in specific weapon types, including anti-personnel mines and cluster bombs. This means that Jyske Capital does not invest in companies that manufacture these weapon types.
Similarly, the legislation is applicable at country level, as we never invest in government bonds issued by countries sanctioned by the EU and the UN. A similar approach is used for sanctioned companies and individuals.
Corporate social responsibility
As part of Jyske Capital exercising corporate social responsibility, Jyske Bank has signed the UN PRI and is thereby among 1,378 international investors, which have signed on to the United Nations-supported Principles for Responsible Investment (PRI). The statement is not to be equated with legislation and does not entail any lodging of the signatory's power to make decisions.
The PRI is based on six general principles directing good practice for corporate social responsibility of institutional investors.
UN PRI principles of responsible investment
- We will incorporate environmental, social and corporate governance (ESG) issues into investment analyses and decision-making processes.
- We will be active owners and incorporate ESG issues into ownership policies and practices.
- We will seek appropriate disclosure on ESG issues from the entities in which we invest.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will report on our activities and progress towards implementing the Principles.
The PRI sets down guidelines for the fundamental principles for responsible investment, but does not comprise specific instructions regarding implementation, screening procedures, etc. Reporting is made once a year, and extracts of the reports are available at www.jyskecapital.com and www.unpri.org.
Cooperation and dialogue with external partners
Our corporate social responsibility is not restricted to respecting the principles of the UN PRI.
As part of the implementation of our approach to responsible investment, we work together with an external adviser about handling corporate social responsibility. Our portfolios are screened every six months to identify companies and countries that are in contravention of international standards for environmental issues, human rights and corporate governance. The reporting is followed by active ownership in the form of dialogue with companies, which have identified ESG challenges.
The active ownership is an important component in our responsible investment policy and a direct opportunity to exert influence and show corporate social responsibility. Together with other investors, we are regularly involved in cases regarding violation of international conventions and norms. In a majority of these cases, we see a positive effect via progression and will to enter into a dialogue with the companies involved.
Active ownership is mainly practised via forums with other institutional investors. We are similarly a member of Dansif, which is an impartial forum for financial actors with activities in Denmark and substantial interest in responsible investment. The membership facilitates experience sharing and debate about relevant subjects within ESG.
In our cooperation with external managers, we focus - on behalf of our clients - on responsible investment. In the selection process and the regular follow-up, we assess the external managers' policy for responsible investment and the implementation of this in specific investment processes just as we demand reporting in the area and challenge via dialogue.
Investment in government bonds
Investment in government bonds is an important independent topic in relation to ESG, and there are charters and guidelines for best practice, including UNGP, OECD’s ”Guidelines for Multinational Enterprises”, UN Global Compact and Rådet for Samfundsansvar's (the Danish Council for Corporate Responsibility) ”Guidelines for responsible investment in government bonds”. In addition, there are standards for responsible investment determined by interest groups, the media, political institutions, lobbyists, investors, etc.
Jyske Capital is continuously aware of guidelines and instructions for responsible investment. But we do not wish to be bound by certain conventions that are not part of applicable legislation. In accordance with statutory provisions, we want to be at liberty to assess which companies, industries and countries we will invest in on the basis of corporate social responsibility. For clients with specific or extensive criteria in relation to responsible investment, we offer tailored investment solutions.
Determination of the contribution to external cooperation on active ownership, assessment of reports from our adviser, the approach to the external managers, coordination of the individual elements of our policy for responsible investment and decisions in respect of ESG challenges are made by an internal committee at Jyske Capital. The committee convenes periodically and if necessary at short notice in cases of special ESG challenges.