TY - CHAP
T1 - The Integration of ESG Ratings in Danish Pension Funds
T2 - Interviews with Pension Fund Managers
AU - Andersen, Jahan Fredskilde Gholamian
AU - Dreyer, Johannes Kabderian
PY - 2023
Y1 - 2023
N2 - Environmental, social, and governance factors (ESG) are increasingly
considered in portfolio decisions, and a vast number of ESG rating
agencies offer different methodologies to support investors. However,
the methodologies vary and are often inconsistent, which poses a
challenge for portfolio managers. How should this be tackled? This
chapter discusses how three of the largest Danish pension funds use ESG
ratings in shaping their portfolios. We find that pension funds
integrate ESG ratings in investment decisions in different ways. For
example, they use negative and positive screening as well as what they
call a holistic approach leaving the final portfolio decision to the
portfolio manager. Given the challenges of ESG ratings, it is essential
to substantiate ESG analysis through an engagement in a dialogic
relation with the companies in question – a key factor to integrate ESG
into practice. Moreover, this dialogue can also be seen as an instrument
to influence companies to move their businesses towards a more
sustainable direction (active ownership).
AB - Environmental, social, and governance factors (ESG) are increasingly
considered in portfolio decisions, and a vast number of ESG rating
agencies offer different methodologies to support investors. However,
the methodologies vary and are often inconsistent, which poses a
challenge for portfolio managers. How should this be tackled? This
chapter discusses how three of the largest Danish pension funds use ESG
ratings in shaping their portfolios. We find that pension funds
integrate ESG ratings in investment decisions in different ways. For
example, they use negative and positive screening as well as what they
call a holistic approach leaving the final portfolio decision to the
portfolio manager. Given the challenges of ESG ratings, it is essential
to substantiate ESG analysis through an engagement in a dialogic
relation with the companies in question – a key factor to integrate ESG
into practice. Moreover, this dialogue can also be seen as an instrument
to influence companies to move their businesses towards a more
sustainable direction (active ownership).
UR - https://link.springer.com/book/10.1007/978-3-031-26959-2
U2 - 10.1007/978-3-031-26959-2_20
DO - 10.1007/978-3-031-26959-2_20
M3 - Book chapter
AN - SCOPUS:85151953863
SN - 9783031269585
T3 - Ethical Economy
SP - 209
EP - 221
BT - Measuring Sustainability and CSR
A2 - Kacanski, Slobodan
A2 - Kabderian Dreyer, Johannes
A2 - Sund, Kristian J.
PB - Springer Science+Business Media
CY - Cham
ER -