Questions related to inclusion

For the fund to receive approval, it must prioritize companies actively engaged in sustainability. For a Nordic Swan-Ecolabelled fund, this means that: 100% of all direct holdings in the fund have undergone a sustainability analysis, which also includes the EU taxonomy. (O12) At least 70% of the fund's capital is invested in companies with strong sustainability efforts. (O15) Companies aligned with the EU taxonomy and/or companies providing solutions to environmental challenges are rewarded. (O15, P1)

Nordic Swan-Ecolabelled funds can invest in companies within such industries, as they are important for society to function, but the companies must be among the leaders in their sector. Companies in the following sectors: aluminium, aviation, automotive, cement, mining, pulp and paper, shipping, and steel, must meet at least one threshold related to greenhouse gas emissions. (O13)

The Nordic Ecolabel has chosen to exclude the most unsustainable industries (read more about our exclusion criteria). Even though agricultural and forestry companies, for example, are associated with many issues related to biodiversity, we have assessed that they are not as unsustainable as the industries that are excluded. If companies receive a poor rating in the sustainability analysis, which is conducted for all companies in the fund, the fund should: a) try to influence the company to reduce its negative impact, and b) report the situation in its sustainability report (O14, O18).

Conducting sustainability analyses and selecting more sustainable companies and operations is a crucial pillar of a Nordic Swan-Ecolabelled fund. It encourages companies to disclose more information demonstrating strong sustainability efforts to attract investors. This, in turn, implies that companies must act more sustainably to remain relevant in the long run.

The sustainability analysis can be conducted internally by the fund company or by companies specializing in this type of analysis, such as MSCI, Sustainalytics, ISS ESG, among others. Often, it's a combination of internal and external analysis that leads to the final result.

Conducting sustainability analyses and selecting more sustainable companies and operations is a crucial pillar of a Nordic Swan-Ecolabelled fund. Our requirements regarding sustainability analysis incentivize companies to disclose and share more information that demonstrates robust sustainability efforts, so that the fund manager can consider investing in them. 90% of the fund's holdings must have undergone a sustainability analysis, often referred to as an ESG analysis due to its focus on Environmental, Social, and Governance aspects. Based on this information, the fund then selects companies that demonstrate strong sustainability practices. This implies that companies must act more sustainably to remain eligible for investment in the long run.