Skip to main content

The content on this page is marketing communication

3 min read time

Annual ESG Report: Investing for financial gain and sustainability

Anyone could be forgiven for struggling to make sense of the many messages and claims that currently abound relating to sustainability. Indeed, it’s all gone a bit mad with, in the US, several states now legally challenging the securities regulator for imposing a long-anticipated rule on company climate risks, and several US financial behemoths withdrawing from established climate coalitions.

How did it come to this? I suspect the truth is that this is another casualty of beliefs and feelings trumping facts. I am equally unimpressed by the way in which the finance industry has approached sustainability; too many have cloaked themselves in the garb of ESG as a sales strapline, without really reflecting on what they might credibly claim with the knowledge and capacity at their disposal.

A key advantage of being an investment boutique, is that we are close to our clients. In SKAGEN, our clients are us, our family, our friends, and our neighbours. And when you are that close, you better be sure that what you claim is true and rooted in the facts. In their 2023 review of ownership actions by the investment team, the SKAGEN Board noted that the firm has been an active and responsible fiduciary agent for the unit holders in the funds. The portfolio managers abide by a sensible and science-based sustainability policy. Sustainability analysis is an integrated part of the investment process for every investment, and this is documented. Our claim to active engagement is evident in the ESG cases that we have pursued and resolved during the year. And we maintain a near one hundred percent voting record for the companies in which we invest. You can read about our engagement and voting activities in 2023 further on in this report.

I cannot reasonably claim that investing in SKAGEN will slow climate change, or halt the destruction of biological diversity, or redress the parlous inequality in the world. What I can say, is that when we invest and engage with a company, we do so because we see a clear fiduciary benefit to our unit holders, one rooted in financial gain and better sustainability outcomes. We know why we are engaging and what we expect to gain from it. This has nothing to do with some abstract third-party rating by a self-proclaimed sustainability expert; it has everything to do with a deep knowledge of the companies in which we invest, and how we think they might improve and thrive.

Where we might arguably improve, is in convincing you, our clients, of the value of this work, and informing you of the benefit it accrues. This report, with its analysis of sustainability opportunity and our approach to integrating this in our investment process, along with examples, makes some effort towards this. I hope you enjoy it.




SKAGEN Focus: Looking below the radar to find ESG’s future leaders

Why neglected small-caps driving real-world changes can be the big winners of the green transition. Read the article now arrow_right_alt

More about Sustainability

ESG Engagements in 2022

Engaging with companies is a key part of an active manager’s responsibility and ESG topics ...

SFDR: What is it, and how does it affect me as a client?

The Sustainable Financial Disclosure Regulation (SFDR) impacts all financial market participants. ...

EU regulation misses the target on real estate emissions reduction

Real estate punches above its financial weight in terms of CO2 emissions and plays an important ...

Historical returns are no guarantee for future returns. Future returns will depend, inter alia, on market developments, the fund manager’s skills, the fund’s risk profile and management fees. The return may become negative as a result of negative price developments. There is risk associated with investing in funds due to market movements, currency developments, interest rate levels, economic, sector and company-specific conditions. The funds are denominated in NOK. Returns may increase or decrease as a result of currency fluctuations. Prior to making a subscription, we encourage you to read the fund's prospectus and key investor information document which contain further details about the fund's characteristics and costs. The information can be found on Storebrand Asset Management administers the SKAGEN funds which are by agreement managed by SKAGEN's portfolio managers.