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This policy describes how SKAGEN exercises such influence on behalf of the funds.

SKAGEN aims to invest responsibly because companies that bring sustainability into their business strategy tend to outperform their counterparts over the long-term. Integrating environmental, social and governance (ESG) assessment into our investment process allows us to make better-informed investment decisions and monitoring, and provides a more comprehensive view of risk and opportunities in the individual investment case.

SKAGEN finds that ESG factors are often a signal of management quality, particularly over the long term. A poorly governed company transforming into a good governed company very often result in superior returns.

The policy has been prepared in accordance with recommendation by the Norwegian Fund and Asset Management Association on corporate governance, EFAMA's (European Fund and Asset Management Association) Code of external governance and is in line with the UN-supported Principles for Responsible Investment (PRI). The policy is approved by SKAGEN's Board of directors.

Policy statement 

SKAGEN is convinced that investing responsibly is essential in order to achieve the best possible risk-adjusted returns for the unit holders. Sustainability and sound corporate governance gives companies competitive advantages and supports their value creation contributing to maximising returns.


SKAGEN strives to gain an in-depth understanding of the relevant ESG issues applicable to our investments and to identify these issues before they escalate into events that may potentially decrease the value of the funds' investments.

The objective is to integrate ESG into the investment decision-making as they have the potential to affect the long-term value of the investment.

The ESG integrated approach is relevant across all the asset classes, sectors and markets in which the funds invest.

Equities and corporate bonds

ESG is of importance to the valuation of a company, both because it affects the extent to which the company is able to achieve its goals and because poor sustainability can undermine value creation in the company. Assessment of ESG is contained in SKAGEN's investment process, both before the investment is made and during the ownership period.

When investing in bonds and other debt instruments the funds are a creditor of the company. Creditors may have certain rights related to the company, for example, the right to repayment of the loan, the right to collateral, the right to petition for bankruptcy and the right to object to certain corporate actions. Such rights may derive from the loan agreement or legislation.

The aim of exercising creditor rights is to contribute to the unit holders achieving the best risk-adjusted returns. Creditor rights are exercised for the benefit of the unit holders.


When we invest in funds from other fund providers these are evaluated under this ESG Policy. We will pursue an active dialogue with the fund provider if found to be in breach with our policy. SKAGEN will also actively seek for all fund providers to sign up to the UN-supported Principles for Responsible Investment (PRI).

Guidelines for responsible investing

SKAGEN will not invest in:

  • Companies that deliberately and systematically break basic human rights.
  • Companies that deliberately harm the local population or the elected form of government in their home country or in the countries they operate.
  • Companies that produce or sell weapons of mass destruction, land mines and cluster bombs as part of their business.
  • Companies that have a material part of their business within tobacco, pornography and gambling.

In addition, SKAGEN will seek to avoid:

  • Companies that through a substantial part of their activities may incur significant and uncalculated liabilities related to health related claims or environmental abuse.
  • Companies that may be in breach of international standards through systematic corruption and bribes, and show no signs of improving this behaviour.
  • Sovereign bonds issued in countries characterized by internal or external political turmoil, or where the sovereign operates in an opaque and unsustainable way.

SKAGEN always seeks to draw our own conclusions based on objective, ascertainable facts and not based on sentiments, rumours or interest groups. We believe that each case should be considered on its own merits and that intention and actions count more than history.

SKAGEN's main duty is to safeguard the interests of the unit holders and the funds may therefore choose to sell a position rather than try to influence on specific issue. Any such disposal shall be carried out in a manner that does not unnecessarily forfeit values for our unit holders.


SKAGEN actively selects securities and as an integral part of this process the portfolio managers will consider whether an investment is in line with the guidelines above.

They also consider if ESG factors are material for an investment in the same manner as they consider other research material pertaining to an investment. The considered elements are:

  • Understanding the financial implications of the risks
  • Pricing the risk premium associated with the matter

Though ESG factors may ultimately influence an investment decision, the specifics of the integration and weight put on various factors may differ between investments.

Examples may include: safety standards, shareholder engagement, environmental impact, labour issues, governance and alignment between management and shareholders.

Corporate governance

SKAGEN follows the recommendations for corporate governance contained in the Norwegian Code of Practice for Corporate Governance (NUES) and the EFAMA Code for External Governance (Principles for the exercise of ownership rights in investee companies).

Monitoring the companies

SKAGEN's portfolio managers continuously monitor the funds' current investments. As part of this, ESG matters are monitored. This is done by analysing company information, screening media and in direct dialogue with representatives from the companies.

In addition, SKAGEN has implemented an online tool for monitoring the company's activities in relation to ESG matters. The tool allows the portfolio managers to analyse a company's significant ESG impacts and its ability to manage those impacts. As such, the portfolio managers are able to determine how well companies adhere to international norms and principles, and to assess company strategies, disclosure and performance with respect to these norms and principles. In addition to initial assessment and alerts on notable research changes, the portfolios are systematically screened, evaluated and documented on a quarterly basis.

SKAGEN does not operate with exclusion lists and negative filtration. In applying our policy, SKAGEN draws on and works with various industry standards, organizations, initiatives and clients to promote active ownership and responsible investment.


SKAGEN believes in the importance of being active and responsible owners. SKAGEN may engage on sustainability matters through direct communication with a company. The decision to engage is made based on our assessment of the significance of a particular matter, the risks it imposes the fund, size of holding, scope to effect change and opportunities to collaborate. Dialogue with companies can be exercised by expressing SKAGEN's view, written or orally, to the company's management, advisers, and Board of directors.

SKAGEN prefers to engage in private, but may use the public voice. Further, SKAGEN prefers to carry out its engagement activities in confidence, to enable honest and open discussions to take place with companies. SKAGEN believes that continuous dialogue ensures the best possible development of the fund's investments, and thereby the best risk-adjusted returns to unit holders.

SKAGEN will consider engagement with companies in the following cases:

  • The company breaks basic human rights
  • The company's strategy or results differ from those previously communicated
  • Poor governance
  • The proposed replacement of directors, equity issues, dividend policy or remuneration of key personnel
  • Transaction between related parties
  • Certain aspects of the company's business are no longer in line with SKAGEN's guidelines for responsible investing
  • There are aspects of the company's corporate governance that are contrary to the best risk-adjusted returns objective
  • The company has the potential for reducing its carbon footprint and operating more efficiently, such as for utilities and industrial companies

If the outcome of the engagement does not meet SKAGEN's expectations, SKAGEN may consider implementing other actions, for example:

  • Express its views publicly
  • Propose resolutions to the general meeting
  • Suggest an extraordinary general meeting

SKAGEN may exercise its engagements in partnership with other investors where this is believed to be in the interests of the unit holders. When working with other investors to influence companies, SKAGEN will be extra aware of conflicts of interests and of being put in an insider position. Consideration that the corporate governance is exercised for the benefit of the fund will govern in any relationship.

SKAGEN is a member of Norsif and Swesif, both independent associations of asset owners and asset managers, service providers and industry associations with interest in, and activities related to, responsible and sustainable investments in Norway and Sweden.

Use of voting rights

The framework for the use of voting rights is set out in Norwegian Regulations on Securities Funds Section 2-24 and in the industry recommendations from the Norwegian Fund and Asset Management Association.

The responsibility for execution of corporate governance in SKAGEN's funds lies with the Board of directors. The daily execution is delegated to the portfolio managers of each fund and the activities are reported on every Board meeting. The Board annually evaluates the execution of corporate governance. It may be appropriate to engage corporate governance in several areas, such as:

  • General corporate governance, i.e. Board composition, elections, compensation, dividend policy
  • Execution of the company's strategy and results Corporate social responsibility and ESG issues
  • The company's risk management

SKAGEN will as a fiduciary vote to secure the unit holder's interests at company annual general meetings and special meetings.

Guidelines for voting

Voting rights must be exercised to the benefit of the fund in question, with the objective of securing the best possible risk-adjusted returns for unit holders. Normally, the portfolio manager assesses how the voting rights are to be used. SKAGEN's goal is to vote in all general meetings of all companies in our portfolios. The portfolio manager familiarises him or herself with the matters to be discussed at the general meeting and decides how to vote. Voting rights are exercised either directly by SKAGEN or by SKAGEN giving a proxy, often to a custodian bank.

Whenever SKAGEN needs to assess whether to vote for or against a resolution, or to abstain, it must be considered whether the proposal is likely to increase the return on the shares issued by the company.

SKAGEN's voting guidelines are as follows:


  • We can support an item only if the accompanying information describing the proposal is deemed sufficient and timely.
  • All proposals should be presented in separate agenda items. Shareholders should be able to propose binding resolutions and call a general meeting and we will vote against proposals limiting such rights.

Board of directors

  • SKAGEN expects a majority of the Board members to be independent from management and business partners, fully independent Board key committees (i.e. compensation, nominating and audit); different persons as CEO and Chairman; number of directorships; and annual election of Board members. The Board should be competent and able to support the management in their daily operations.

Anti- takeover mechanisms

  • Poison pills, unlimited capital authorizations, staggered boards, super voting shares, super majority vote requirements and golden shares all serve to enhance the power of management at the expense of shareholders. We vote against unless they are structured to give shareholders the ultimate decision in any take-over offer.

Capital structure

  • Shareholders should have the right to approve the issuance of shares for corporate purposes in order to ensure that such actions serve a valid purpose. We will support the board's proposals on capitalization provided the measure balances corporate needs for flexibility against reasonable shareholder control and equitable treatment of shareholders.
  • SKAGEN holds "one share – one vote" as a general principle, and will vote against other capital structures unless they are well-founded.

Executive compensation

  • We assess the performance objectives established by compensation committees, and support well-designed compensation plans that can be effective in aligning management with shareholder interest.

SKAGEN encourages the Board and the management to buy shares at their own expense.

Specific situations may call for unique responses and we will always take market and company conditions into consideration. To the extent that voting rights have been exercised in controversial cases or where SKAGEN has voted against the board's or management's recommended course of action, SKAGEN will disclose the voting rationale.

A vote disclosure is sent to the Board and the unit holders are informed via SKAGEN's website. If SKAGEN has voted against the companies' proposal, the information will refer to the guidelines above. Unique responses will be explained.

Voting process

SKAGEN has access to an online service for voting, which also provides notices of general meetings and comprehensive information about the companies, the voting items on the agenda and recommendations.

Each fund has a custodian approved by the Financial Supervisory Authority of Norway. The custodian bank also provides information related to general meetings.

Securities lending

SKAGEN will normally recall shares on loan so that the funds can vote for at least 50 % of share ownership at the general meeting. Securities lending shall not compromise the funds ability to focus on sustainability significantly.

Conflict of interests

SKAGEN's portfolio managers are subject to strict rules when it comes to investing in financial instruments. However, with prior approval, they may invest in companies which are part of the funds' portfolios. In cases where portfolio managers have invested on their own account in companies in which they are to exercise voting rights on behalf of the unit holders, the portfolio managers must contact the Managing Director for advice on whether they may also exercise a voting right on behalf of the funds. In case of conflicting interests, the Managing Director must request new authorisation from the Board.

Employees of SKAGEN may not sit on the Board of companies quoted on a regulated market. In exercising corporate governance on behalf of the funds, SKAGEN may be represented in a company's corporate assembly and election committee. The decision of whether or not to seek such representation must be based on the specific assessment that this is in the unit holders' interests. SKAGEN may be represented by employees or by persons nominated by SKAGEN.

Inside information

SKAGEN is dependent on access to information about the company in order to assess any challenges companies have with their corporate governance. It is also important to retain flexibility with respect to funds' investments so that one can act in the best interests of the unit holders. SKAGEN should have a clear understanding of the information received in relation to the rules on inside information, also in relation to the exercise of corporate governance. It is expected that companies and their advisors also have an awareness of this legislation and do not put SKAGEN in an insider position without consent. If in doubt it should, as far as possible, be clarified by the declarant whether the relevant information is inside information before it is received.


Responsible investing

Responsible investment means acknowledging the relevance of ESG factors for the long-term health and stability of companies and the market as a whole.


Sustainability means paying attention to wider contextual factors, including ESG and the evolving values and expectations of societies. This is done because these issues are key drivers of industrial and economic change, and the more successful companies in the long run are those that adapt and respond most effectively to challenges and opportunities.


ESG refers to the three main areas, namely environmental, social and governance – the key factors in measuring the sustainability of companies. ESG is a generic term used in capital markets and by investors to evaluate corporate behaviour.


UN-supported Principles for Responsible Investment (PRI) is a network of international investors working together to put the six Principles for Responsible Investment into practice. The UN PRI signatories are committed to incorporating the principles of the investment process in the management of companies' environmental, social and governance issues (ESG).

Corporate governance

Corporate governance concerns relations between the shareholders, the board of directors and the management of a company and relates to how the company is organized and run.

Voting rights

Voting rights refers to the ability to vote at general meetings of a company. In corporations, shareholders generally hold one vote per share at general meetings, which take important decisions on behalf of the company.

Securities lending

Securities lending refers to the lending of securities by one party to another. The terms of the loan will be governed by a "Securities Lending Agreement", which requires that the borrower provides the lender with collateral, in the form of cash or non-cash securities, of value equal to or greater than the loaned securities plus agreed upon margin. Securities lending is an established practice in global financial markets that provides liquidity to markets while also generating additional returns to investors who lend securities.

More about responsible investing.



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