Responsible investments

When we invest, we make sure to find the balance between generating the highest possible long-term returns and exhibiting responsibility as an investor. This applies for our internal investments and for investments made by the asset managers we work with.

Realdania is a responsible investor. We have set the general framework for our approach to responsible investments in the Investment Strategy 2016-2019. The strategy contains targets and framework for how we want to include environmental, social and governance-related (ESG) aspects in our investment policies, philosophy and processes.

More specifically, with the strategy as our basis, since January 2017 we have been working on the basis of an updated policy that outlines precise ESG responsibility framework for our non-philanthropic investment activities.

We are aiming at striking the balance between, on the one hand, generating the highest possible long-term returns on our non-philanthropic investment assets based on a calculated risk, and on the other hand exhibiting socially responsible investment behaviour.

"We believe that we achieve the greatest impact through dialogue with the companies in which we invest and the external asset managers with whom we work."

Peter Johansen

CIO

Screening and engagement

We screen our non-philanthropic investment assets continuously in order to make sure they do not conflict with the framework set for our social responsibility. The screenings are performed by an external consultant and includes all listed equities and bonds. Expansion of the screening activities will continue and ultimately it will cover all the main asset classes.

As a responsible investor, we want to contribute actively to change conditions that conflict with our framework for responsible investments. Therefore, together with other investors, we endeavour to influence the way companies work with respect to legislation, employee rights, the environment, controversial weapons and corporate governance. This is also called ‘engagement’.

This approach means that we do not use negative lists or pre-screening in connection with our investment activities. As a result, either directly or via external asset managers, we can potentially invest in companies that we subsequently suspect of conflicting with the framework we have set for responsible investments.

If we get such a suspicion, we will contact the company via our external consultant. If, over time, our engagement fails to work, the ultimate consequence will be that we dispose of our investment. However, our fundamental belief is that it is better to try actively to push the company to find a solution to problems rather than ignoring the issues.

 

Requirements for asset managers

We require our external asset managers to be signatories of Principles for Responsible In-vestments (PRI), to incorporate similar processes for responsible investments, or in some other way to document behaviour in accordance with PRI.
 
We regularly follow up on the activities of all our external asset managers to make sure that they are constantly aware of our ESG framework . We also ensure that we monitor that our asset managers comply with their own internal processes for responsible investments.

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