Danish bank embraces SRINovember 2008
Denmark’s largest banking group, Danske Bank, has adopted an SRI policy in the belief that it will improve the long-term performance of its investments.
The policy, covering about €53.4billion ($71.7bn, £41.4bn) in assets, will prevent the bank from investing in companies that violate international standards on human rights, arms, working conditions, environment and anti-corruption. The policy applies to the asset management operations of Danske Bank, which is also involved in insurance, retail banking, mortgage finance and real-estate brokerage. The policy does not cover bonds.
Niels-Ulrik Mousten, senior executive vice-president, said its investment managers had begun using this approach in the belief that good behaviour ‘is a precondition for long-term value creation in a company’. He believed the policy was likely to make customers ‘feel comfortable in placing their investments with us’.
For the past year the group has been criticized for its holdings in a number of controversial companies, among them cluster bomb makers, businesses involved in the oil and gas sectors, and those operating in Burma.
Analysis of companies will be provided by the Swedish company Ethix SRI Advisors. Its advice will be evaluated by a newly created SRI board at Danske Bank, comprising chief executives of units of the group, including Danske Capital, Danica Pension and Danske Invest, together with representatives from its three-person corporate responsibility team.
One of the board’s main responsibilities will be to decide whether to withdraw equity investments in certain companies, or continue holding with a view to engagement.
The Fortune 500 Group, which controls about a third of the Danish banking market, has already decided to disinvest €23million from 13 companies – including General Dynamics and Lockheed Martin, both over cluster munitions, and Nissan over concerns relating to activities in Burma. A further 17 are on an ‘observation list’.
Danske Bank recently reported ‘modest’ exposure to the collapse of Icelandic banks and Lehman Brothers. It stands to lose $100m in the latter case.
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