Jyske Bank joins Net Zero Asset Managers Initiative

20.10.2021

Jyske Bank joins Net Zero Asset Managers Initiative

By 2050, Jyske Bank’s investment portfolios must be net CO2-neutral

Jyske Bank has joined an international association of asset managers that is committed to making clients’ investment portfolios net CO2-neutral by 2050.

''We all have a great and common climate challenge. Governments and companies must shoulder their share of the responsibility for meeting the climate goals, but private capital also plays a key role. Here, Jyske Bank is part of the solution together with other managers of private assets'', says Kenneth Styrbæk, who is Vice President and ESG Manager in Jyske Bank’s asset management company, Jyske Capital.

''Investments are an important driving force in companies’ sustainable transformation, which is why we have a responsibility. Through our wealth and investment advice, we can channel investments towards companies that make an effort and have a realistic plan to reduce CO2 emissions'', he explains.

As examples of such channeling, he mentions investments in electricity companies, which are adapting to using renewable energy sources, or cement factories that are developing new and less CO2-heavy production methods. 

''We see this as the right way to go in terms of both return and sustainability'', states Kenneth Styrbæk.

Concrete plans and goals

The Net Zero Asset Managers Initiative is a binding collaboration, founded in December 2020 by six international investor networks. Today, the collaboration consists of 128 signatories, who together handle the responsibility for customer assets worth approximately USD 43 trillion.

''We have joined the collaboration because it is a large and powerful association that works seriously with all the necessary pieces in the big puzzle. The core itself is to reduce the CO2 footprint from our investment portfolios'', says Kenneth Styrbæk.

As a participant in the Net Zero Asset Managers Initiative, Jyske Bank has committed itself to setting specific plans and objectives. They must be continuously adjusted and approved until 2050, where everyone in the collaboration must meet the goal of net zero CO2 emissions from their investment portfolios.

The term ’net zero’ or ’neutral’ covers the fact that an investment portfolio may well contain companies that emit CO2. It must be compensated with investments that reduce CO2, so that the total CO2 calculation for the portfolio equals zero.  

Dialog is an important tool

As part of the agreement, Jyske Capital will identify the largest CO2 emissions in the investment portfolios and enter into a dialogue with the companies about how they can better themselves – including a talk about the bank’s expectations for their climate plans, anchoring responsibilities in management and reporting on progress.  

''Based on international cooperation, we will be stronger in the dialogue with companies and politicians'', says Kenneth Styrbæk and continues:

''We believe in dialogue, however, we will simultaneously to a greater extent enter and take active ownership in the companies and influence the development by using our shares to vote at their general meetings''.

A gradual process

Kenneth Styrbæk emphasizes that it is a gradual process in which the bank must over time deliver both competitive and sustainable returns in the investment departments. You do not make a company independent of fossil fuels overnight, and an investment portfolio becomes neither sustainable nor CO2-neutral with a quick fix.

''We do not solve the basic challenge by simply getting rid of all the companies with the greatest CO2 emissions. Many of these companies provide necessary goods and services, so we need to put maximum pressure on them to develop and initiate real change, but we also need to understand that it takes time. Otherwise, we just send them into the arms of other investors who may not have the same climate agenda'', he elaborates.

Transparency and information for customers

For Jyske Bank, it is also important that the customers have a good understanding of what happens through the entire process. An understanding of what it means for their investments.

''We must have the customers with us on the journey. Already today, our customers receive a range of information about the sustainability and climate impact of their investments, and it is an openness and information that we continue to work with. That is why we promise that our customers can always keep up with the CO2 targets we set for their portfolios, and for the bank’s overall asset management'', says Kenneth Styrbæk.

He also points out that the work and CO2 commitments in the Net Zero Asset Managers Initiative are only one piece in Jyske Bank’s overall work towards more sustainable shares and investments.  

''We have several new and concrete initiatives on the way, but we must also be honest in saying that we do not know all the steps on the road yet, but we know the direction'', says Kenneth Styrbæk.

FACTS:
In its annual ’Report on Sustainability’, Jyske Bank has identified climate as the most significant impact area.

In 2020, customers’ investments accounted for 34% of the bank’s financed CO2 emissions of DKK 2.7 million ton. By living up to the obligations in the Net Zero Asset Managers Initiative, Jyske Bank will make a significant contribution to reducing the total financed emissions.