Nordea Secures €800M Decarbonization Mandate From Ircantec

Nordea Asset Management, a top Northern European asset manager, has been appointed to handle an €800 million (USD $867 million) global equity decarbonization investment mandate by French complementary pension scheme Ircantec. The mandate, which was gained in association with Paris-based ODDO BHF AM asset management company, is a huge leap towards achieving Ircantec's move to align the investment strategy in line with lofty climate objectives.

Ircantec, which has over €17 billion (USD $18.4 billion) in assets under management, has been actively engaging in sustainability-driven investment strategies. In 2021, the pension fund established a series of commitments aimed at ensuring that the emissions reductions achieved by its portfolio are consistent with a 1.5°C global warming pathway. Among these commitments is a full exit from fossil fuel investments by 2030 and a target to reduce portfolio emissions at an average rate of 7% annually until 2050. The recently announced mandate will be instrumental in assisting Ircantec in meeting such decarbonization objectives.

Underlying this investment strategy is Nordea's proprietary BetaPlus Responsible Enhanced Equities Strategies. The strategy combines state-of-the-art decarbonization tools to measure the climate development of portfolio firms and keep investments on a straightforward trajectory towards net-zero emissions. By continuously measuring corporate carbon intensities and making responsible investment, the strategy looks to maximize financial returns while promoting climate action.

Nordea's Multi Assets Team, which focuses on multi-asset investment strategies and sustainable finance solutions, will be responsible for the management of the €800 million mandate. The collaboration with ODDO BHF AM will also enhance the execution of the mandate by integrating skills for global equity investments with high attention to sustainability.

In a statement regarding the announcement, Christophe Girondel, Nordea Asset Management's Global Head of Institutional and Wholesale Distribution, appreciated the confidence Ircantec showed in their investment strengths. "We appreciate Ircantec's confidence in our long-standing BetaPlus strength, and we look forward to assisting them on their journey toward a low-carbon future. The ability to assist Ircantec in achieving their decarbonization goal emphasizes our dedication to linking climate goals and investment performance," he said.

The partnership between Nordea Asset Management and Ircantec represents a wider pattern among institutional investors looking to position their portfolios alongside international climate targets. With pressures from regulation and investor expectations surrounding sustainability building, pension schemes and asset managers are increasingly turning towards strategies minimizing exposure to high-emission sectors and finding opportunities in climate-friendly assets.

For Ircantec, the mandate is part of a broad commitment to make sure its reserve resources help create a sustainable future. The pension fund has been making a concerted effort to bring environmental, social, and governance (ESG) factors into its investment choices, in response to the long-term threats of climate change and the promise of financial returns from green investment. By pledging an annual 7% decrease in portfolio emissions, Ircantec not only becomes an active participant in the battle against climate change but also an inspiration for other institutional investors.

Nordea Asset Management, a responsible investment leader, has been increasing its range of sustainable investment products. The BetaPlus Responsible Enhanced Equities Strategies, which will form the foundation of the new mandate, have been created to maximize returns while bringing portfolios in line with climate goals. These strategies use a blend of fundamental research, ESG analysis, and proprietary decarbonization tools to select companies that are driving the shift towards a low-carbon economy.

The collaboration with ODDO BHF AM gives more depth to the initiative as it utilizes the firm's knowledge in asset management and sustainable investing. ODDO BHF AM has led the way in incorporating ESG considerations into its investment processes and has created pioneering methods of sustainable equity portfolio management. The partnership between ODDO BHF AM and Nordea will strengthen the impact of the decarbonization-centered strategy, and Ircantec will gain a solid foundation to meet its sustainability objectives.

As the financial industry evolves to meet the challenges of climate change, efforts such as this underscore the increasing significance of sustainable investing. Institutional investors and pension funds are increasingly seeing their role in facilitating the shift to a sustainable economy. By investing in companies that lead the way on decarbonization, they can shape corporate actions, speed the deployment of clean technologies, and help achieve the overall objective of capping global warming.

For Nordea Asset Management, winning this mandate further establishes the company as a leader in sustainable investing. Dedicated to the implementation of ESG principles within its investment solutions, the company has been proactively building solutions enabling investors to embark on the transition to a low-carbon economy. The cooperation with Ircantec is not only an important business proposition but also an important contribution to international climate action.

In the coming years, whether this mandate achieves success will be closely monitored by investors, policy makers, and sustainability activists alike. As Ircantec moves towards meeting its ambitious climate decarbonization goals, strategies adopted by Nordea and ODDO BHF AM have the potential to be a best practice for pension funds seeking to align their portfolios with climate aspirations. As the financial sector takes center stage in determining the future of sustainable development, such efforts as this one underscore the potential of sustainable investing to effect positive change.