Sustainability in Xact
Xact works with sustainability in three main ways: We exclude, we include and we influence companies through dialogue and active ownership.
A vital part of our sustainability work is to also actively work to encourage the creation of a wider range of indexes with sustainability criteria. Read more about our work with sustainability below.
All of our asset management is founded on a common value base, which is summarised in our policies for responsible investments. This means that all of our funds exclude a number of controversial business operations such as banned weapons and nuclear weapons as well as hold a restrictive position to coal mining and coal power generation. The funds also take into consideration international norms and conventions that include such areas as the environment, human rights, work conditions and corruption. Xact is a part of Handelsbanken and through the Bank we are committed to following a number of voluntary frameworks such as the UN initiative, Global Compact, and the UN’s Principles for Responsible Investments (PRI). These initiatives and guidelines provide guidance for our work.
Read more about Xact Kapitalförvaltning’s Policy for shareholder engagement and Responsible Investments here
Mutual funds with enhanced sustainability criteria
We offer mutual funds with enhanced sustainability criteria that, from the outset, exclude companies in which the primary business operations are within controversial sectors such as alcohol, tobacco, commercial gaming, war materials, pornography and fossil fuels. The funds also avoid investing in companies that are regarded as contravening international norms and conventions. As a result, the funds do not invest in companies considered as violating international norms within human rights, the environment, corruption or work conditions.
Historical yields are not a guarantee of future returns. The money you invest in a fund can both increase and decrease in value and it is not guaranteed that you will recover the entire invested amount. The complete information brochure, fund rules and fact sheets is available under each fund.
Dialogues are an important method for contributing to sustainable development. This applies to both proactive dialogues aimed at influencing companies to improve their sustainability efforts, as well as to dialogues with companies which we feel have not complied with the international norms and conventions that we respect.
We execute the engagement efforts primarily together with other asset owners and through sector-wide initiatives. Collaboration is a strength and sends clear signals to companies that we expect the issues to be taken seriously. The starting point for these dialogues is often suspected or confirmed violations of international norms and conventions. We focus primarily on the UN initiative Global Compact’s principle areas of human rights, labour law, work conditions, the environment and anti-corruption. Dialogues can also target special themes such as palm oils, antibiotics or the climate and are conducted within the scope of our international collaborations, e.g., PRI.
Read more about our dialogues here
An active and responsible corporate governance in those companies we invest is an essential part of our assignment as asset manager. The starting point for our work is our Corporate Governance Policy.
We expect those Swedish companies in which we invest to follow the Swedish Code of Corporate Governance, a code that complements regulations and other rules by stating a norm for corporate governance that has a higher level of ambition, while providing the opportunity for justifiable deviations. In the same way, foreign companies should follow relevant statutes and also follow or provide an explanation for any deviations from the corporate codes applicable on the markets in which the companies are listed.
These guidelines are complemented by other areas within the framework of our corporate governance policies.
Read more in our Corporate Governance Policy here
Nordic Swan Ecolabelled Funds
The Nordic Swan is the official ecolabel in the Nordics and was established by the Nordic Council of Ministers to assist consumers in making good environmental choices. The intent of Nordic Swan Ecolabelled funds is that the fund management company shall influence the companies in which the fund invests to develop a more sustainable direction. The fund shall fulfil 25 obligatory requirements relating to exclusion, inclusion, transparency and engagement.
A Nordic Swan Ecolabelled fund provides that:
the fund and its index must fulfil requirements to refrain from investing in certain branches and companies that are particularly problematic.
the fund and its index must fulfil the requirements of the sustainability analysis for conceivable investments and thereby prioritise the better companies.
the Management Company shall state which holdings are included in the fund and annually report what sustainability work has been conducted.
the Management Company is encouraged to work for active ownership and drive the engagement activities on behalf of the fund for the companies included in the portfolio.
The Nordic Swan Ecolabel on a fund does not mean that all of the companies in the fund are sustainable, are problem-free or lack challenges. The requirements of Nordic Swan is designed to influence, through your investments in the fund, the markets, sectors and companies in a more sustainable direction.
Read more at svanen.se/spararen
Our Nordic Swan Ecolabelled Funds
Our Nordic Swan Ecolabelled funds track indexes in which all of the obligatory requirements with regard to exclusion and inclusion of companies in accordance with Nordic Swan’s criteria are established in the index methodology.
The funds/index exclude companies involved in:
Controversial weapons (0%)
Conventional weapons and war materials (5%)
Fossil fuels and uranium (5%)
Tar sands (0%)
Tobacco production (0%), distribution (5%)
Commercial gambling (5%)
Pornography production (0%), distribution (5%)
Violation of international norms, e.g., UN Global Compact
The fund/index includes:
The companies within the investment universe with the highest sustainability ratings related to the environment, social and corporate governance issues.
A minimum of 50% of the index companies, measured in the total market value of the index, should be deemed as leaders within sustainability.
XACT Sverige (UCITS ETF)
During 2018, XACT Sverige (UCITS ETF) became the world’s first Nordic Swan Ecolabelled index fund. The fund is an exchange-traded index fund and its objective is to track the performance of SIX Sweden ESG Selection Index GI as closely as possible. The index consists of large and mid-sized Swedish companies that comply with the sustainability criteria in the index. The sustainability requirements of the index comprise both the inclusion of companies with high sustainability ratings as well as the exclusion of companies in controversial business operations.
Read more about XACT Sverige here
XACT Norden (UCITS ETF)
XACT Norden (UCITS ETF) is an exchange-traded index fund that meets the sustainability requirements of the Nordic Swan Ecolabel. Its objective is to follow the performance of the Handelsbanken Nordic ESG Index as closely as possible. The index consists of a selection of about 30 of the most-traded companies on the Nordic stock exchanges that meet the sustainability requirements of the index. The sustainability requirements of the index comprise both the inclusion of companies with high sustainability ratings as well as the exclusion of companies in controversial business operations.
Read more about XACT Norden here
The Sustainable Development Goals
In September 2015, the UN’s General Assembly adopted Agenda 2030. This initiative includes 17 Sustainable Development Goals, with 169 sub-goals, with the aim of achieving a long-term, sustainable economic, social and environmental development that eradicates extreme poverty, reduces inequality and injustices in the world, and combats climate change. Consequently, Handelsbanken’s Sustainability Committee has analysed the 17 goals with the accompanying 169 sub-goals to determine which goals we will be focusing on in our business operations and how we can integrate these into our asset management operations within the framework of the previously described sub-areas over the Bank’s key issues. The analysis was conducted based on the degree of impact, both indirect and direct, identified risks and opportunities, as well as on the Bank’s most vital sustainability issues. As a result of the analysis, we will be focusing on the following six goals:
Decent work and economic growth
Sustainable industry, innovation and infrastructure
Sustainable cities and communities
Peace, justice and strong institutions
Read more about Handelsbanken and the Sustainable Development Goals here
Initiatives and collaborations
PRI (Principles for Responsible Investment) was launched in 2006. It is a network of investors and service providers that work together with the UN, UNEP Finance Initiative and Global Compact to implement principles for responsible investment. Its aim is to promote responsible actions among institutional investors and to work for increased transparency and awareness of environmental, social and corporate governance issues in the companies in which these players invest. Handelsbanken became a signatory to the principles in 2009. PRI has more than 1,750 signatory members, from more than 50 countries, with total assets under management of roughly USD 70 trillion.
Read more about PRI here
In 2009, Handelsbanken signed the UN Global Compact, an initiative aimed at companies which advocates 10 principles based on international conventions. These principles, established in 2000, include human rights, labour laws, the environment and anti-corruption.
Read more about Global Compact here
Other initiatives and collaborations
Read more about other initiatives and collaborations here
Policies and documents
The sustainability profile provides transparent and easy-to-understand information about how the fund applies sustainability criteria in fund management.
Read more about XACT Sverige in the Sustainability profile here
Read more about XACT Norden in the Sustainability profile here