Norway’s biggest investors go direct to companies for ESG data

Initiative could prompt European investors to follow suit as ESG template becomes publicly available.

Norway’s largest institutional investors are understood to be lobbying the country’s top companies to report to a public set of standards on issues such as the environment, labour and human rights, which could significantly change the way investors receive such information if rolled out in other countries. Market sources who have knowledge of the plans said the Norwegian investors include the €267bn ($418bn) Government Pension Fund, Folketrygfondet, which manages more than €25bn for the country’s social insurance system, and a group of the country’s financial institutions including Nordea, Storebrand, KLP and DNBNor. They said an announcement on the plans was expected shortly. The initiative would be one of the first to come directly from investors. It is believed those involved have drawn up a framework outlining precisely the type of data and information they want companies to provide. The sources said the Norwegian investors were planning to release the information requirements to encourage other European investors to receive the same data from companies in their home markets.
Investors have recently begun to question whether thedata they receive from companies matches their needs for making informed investment decisions based on ESG criteria. Last month, Responsible Investor revealed that the Frankfurt-based European Federation of Financial Analysts Societies (EFFAS), could shortly adopt a set of 30 Key Performance Indicators (KPIs) for environmental, social and governance issues and long-term viability that investors can promote amongst corporations in a bid to get clear and comparable data.
Investment analysts say they cannot currently get enough financially relevant and comparable information on ESG issues from companies, despite projects such as the Global Reporting Initiative, which aims to get firms to report uniformly on sustainability issues.
Norwegian investors, notably the Government Pension Fund, are among the most active in terms of responsible investment and their moves are closely followed internationally. The exclusion list of the fund on issues such as corporate links to nuclear weapon and cluster bomb production is used by many pension funds as an ethical benchmark because of the resources put into its research.