The Danes: Active ownership is an effective tool
19 April 2023
Industriens Pension believes in the value of being an active investor and seeking influence in the companies invested in. A new Epinion survey shows that the majority of Danes share the view that active ownership can often have a great effect.
It is useful and often creates value when investors come together to exercise active ownership and try to influence the companies invested in in a more sustainable direction. This is the basic attitude of Industriens Pension, and that assessment is shared by a clear majority of Danes.
A new study carried out by Epinion for Industriens Pension shows that 78 percent of the Danes who have taken a position on the issue consider that active ownership by large investors is a “very effective” or “fairly effective” tool to achieve greater sustainability in investments.
Pleased with the attitude of the Danes
Industriens Pension often engages – in collaboration with other investors – in dialogue with companies about, for example, environmental and climate conditions, labor rights, human rights and good corporate governance. Experience shows that it often makes a difference if many large investors put continuous pressure on the companies invested in – for example in matters of green transition, labor rights or other matters.
Therefore, investment director at Industriens Pension, Peter Lindegaard, is pleased that the strategy of active ownership meets the understanding of the clear majority of Danes.
“We spend a lot of energy on entering into a dialogue with companies together with other investors, and we prioritize using our right to vote at the companies’ general meetings worldwide via digital voting. Therefore, I also think it is encouraging that such a large majority of Danes share the view that it is a sensible way to go,” says Peter Lindegaard.
He adds that there are many indications that active ownership – in addition to contributing to sustainable social development – can also contribute to creating more valuable companies in the long run and thus a higher return on investment.
Exclusion as a last resort
If active ownership does not work in companies with ongoing major challenges in terms of, for example, social conditions, environmental and climate issues or other issues, exclusion of the company may come into question. With both Industriens Pension and many other large investors, exclusion will generally only come into question when a desired behavioral change has not been possible to get through via dialogue within a reasonable time horizon.
The new Epinion survey shows that 73 percent of Danes who have taken a stand on the issue perceive exclusion from large investors as a ‘very’ or ‘fairly’ effective tool for achieving greater sustainability in investments.
In other words, both active ownership and exclusions are perceived as effective strategies by a clear majority of Danes. However, most Danes perceive active ownership as effective.
“For us, exclusion is a last resort when we see a need for significant changes, but no longer believe that we can have real influence via dialogue and voting. It is of course important to also have this tool in the toolbox, but the primary and most effective approach is active ownership,” says Peter Lindegaard.
Source: Industriens Pension
