Nordic Ecolabelling given green light to label first funds

Following two years of development work and a broad consultation period, an agreement has been reached on the criteria for applying the ‘Swan’ label to equity funds in the Nordic region.

The standards were agreed by the Nordic Ecolabelling organisation, and the first labelled funds are expected to be announced by 10 October, in time for the AGM of the Global Ecolabelling Network taking place that month in Stockholm.

The Swan label was founded by the Nordic Council of Ministers in 1989, to assist consumers in making active choices that would benefit the environment. A Swan labelled fund is expected to be a sustainable alternative for both retail and professional fund investors, and means that the fund will include/exclude holdings and work in a transparent way to influence companies to  support sustainability.

Per Sandell project leader at Nordic Ecolabelling, said: “We judge that the requirements affecting analysis, reporting and follow-up will contributed to increased focus on sustainability, both by the fund manager and the companies that are being invested in. Our strategy is that funds should not just include companies that are ‘best in class’. Companies that are on the right path should also be able to be included.”

Nordic Ecolabelling wants to go further than the traditional ethical fund, and steer the industry towards funds that are transparent and act as active owners with the objective of influencing companies. This means, the organisation said, that there may be holdings that are not seen as the most sustainable, but will be for companies that are targeting such an objective.

“We believe that today’s savers and investors are ready to select funds that influence companies towards a more sustainable trajectory. We exclude companies and sectors that are furthest away from being sustainable. But we want to include the companies that are on track to switch over to more sustainable production,” Sandell adds.

The application of the label also reflects what Nordic Ecolabelling sees as growing demand for unbiased judgement of funds’ sustainability profiles – and that at both the retail and institutional level. For example, in Sweden, the application of the Swan label will be conducted by Miljömärkning Sverige AB, which works on behalf of the government, and which does not represent any fund industry interests.

Survey’s suggest that 90% of Nordic consumers recognise the Swan label.

Further details of the criteria by which funds will be labelled are available here: Kriteriedokument_101_Investeringsfonder_1_Engelska (1)

 

ABOUT THE AUTHOR
Jonathan Boyd
Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope. Jonathan has over two decades of media experience in Japan, Australia, Canada and the UK. Over the past 16 years he has been based in London writing about funds and investments . From editing the newsletter of the Swedish Chamber of Commerce in Japan in the 1990s he now focuses on Nordic markets for InvestmentEurope.

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