Methodology

Our work with responsible investments primarily revolves around three areas: Negative screening, Best in Class analysis and engagement. These methods are described below.

Negative screening
Storebrand's investment universe consists of almost 4000 companies. These companies are continually monitored to ensure that we do not contribute to unacceptable business practice through our investments.

In order to identify accusations of corruption, environmental damage, breaches of human rights and other unacceptable practices, we use a customized search function on the Internet which searches for company names and thematic search words. The result is more than 20 000 news articles which we review every year. If the news articles contain serious allegations, a case analysis is carried out. The scope of these analyses varies depending on the nature of the allegations.

If the analysis indicates an unacceptable culture within the company, we contact the company in question directly. In particular it is important to determine what measures have been instigated in order to correct the damage and what is being done to reduce the risk of recurrence.

In most cases, we also contact external consultants to obtain further information, fundamental assessments, legal considerations or general statements on the case. Finally, the accusations, analysis, the company's response and expert statements are presented to Storebrand's SRI investment committee.

The committee assesses whether the accusations should result in the company being excluded. The case information is presented anonymously, so that the decision is not coloured by the committee's knowledge of the company. The SRI investment committee meets quarterly and consists of six of the group's senior managers.

The committee also considers questions of principle and cases concerning the inclusion of companies which are able to demonstrate systematic improvement.

The monitoring of unacceptable business practice includes the analysis of companies which manufacture landmines, cluster munitions, nuclear weapons and tobacco. Again, we draw on external expertise, including Norwegian People's Aid, which has a leading global specialist team within landmines and cluster munitions.

Best in Class analysis
Positive screening is the term we apply to the identification of "Best in class" companies. Storebrand analyses global companies with respect to their environmental and social responsibility performance, and they are benchmarked against other companies in their industry sector.

The analysis is carried out for industries where there is a high risk of severe environmental damage, corruption or breaches of human rights or other ethical norms. Examples of such industries are mining, oil production and shipping. The analysis is based on the companies' own reporting.

In the Best in Class analyses, we assess factors such as the companies' environmental management systems, measures to prevent corruption, corporate governance principles, employee welfare and human rights policies. The analysis is based on the Global Reporting Initiative (GRI) guidelines, but the selection of themes is adapted to the individual industry concerned.

Companies that are ranked amongst the best in their industry are awarded the distinction "Best in Class", and qualify for investment in the funds Storebrand Global SRI and Storebrand Pioner. By investing in the best companies, Storebrand is able to reinforce positive contributions, rather than simply avoiding unacceptable business practice.

Engagement

We are in daily contact with companies via e-mail and telephone and sometimes through meetings and company visits. Each year we are in contact with several hundred companies worldwide.

Representing an asset manager is an obvious strength, because the company knows that a breach of our ethical standards could result in us selling our shares and bonds in the company concerned.

An important goal for Storebrand is to exert its influence to contribute to sustainable development. Hence, we are also in dialogue with companies that are excluded from our investments. In both negative screening and best in class analyses, we are seeking evidence of systematic improvement and reduced environmental and social risks.

We also want corporate responsibility goals and performances to be communicated with relevant stakeholder groups.