Sustainability
at Nordic Solar

The continued focus on the green agenda is resulting in new legislation on the subject. The EU has ambitious green goals and has, among other things, set some bounds for the financial sector.

The purpose is to harmonize the rules and make it clear to the investors, how investments affect the sustainability. You can read more here.

Sustainable investments

Sustainable investments are the investments of the future. A sustainable investment is as such an investment in an economic activity, contributing to an environmental (E) and/or a social goal (S), provided that the investment is not materially detrimental to any of the goals. In addition, a sustainable investment requires that the companies invested in, follows good management practices (G) taking into account sound management structures, working conditions, remuneration of staff and compliance with tax rules.

Our work to integrate responsibility and sustainability in our business and in our products, includes our entire value chain and product life cycle. We actively work to reduce negative impacts on the environment and social aspects, as well as promoting sustainable investments and the circular economy. We want to create a high degree of transparency for our investors in relation to sustainability, thereby promoting activities and investments that create positive effects in relation to the climate, sustainability, the environment, biodiversity and social rights.

At Nordic Solar, we are in the process of implementing our sustainability strategy, which will be operationalized through policies and goals. This allows us to manage and optimize our sustainability efforts and create transparency in the decision-making process for our investment products.

Our overall approach to ESG is based on responsible business ethics and is based on the principles set out in recognized conventions and guidelines in the field of sustainability. These include the OECD guidelines for multinational companies, the fundamental international human rights, the International Labor Organization’s (ILO) declaration on fundamental principles and workers’ rights, and the eight fundamental conventions of the ILO. In addition, we work with the UN’s 17 world goals for sustainable development.

The final description of how we handle and comply with our business ethics principles can be found in our sustainability report. The report is being prepared.

Development of procedure for securing compliance with minimum guarantees in our financial activities, to ensure compliance with the OECD guidelines for multinational enterprises, international human rights and ILO principles and labor rights. In the future, we will conduct an annual norm-based screening to ensure and document compliance with the minimum guarantees.

Nordic Solar has launched a project to secure that it is taken into account and sought to avoid a negative effect on sustainability factors, through active ownership throughout our entire value chain and product life cycle. Including by incorporating sustainability risk management for both our financial products and in the investment decision-making process. The documentation of this will in the future be found in our “Principal adverse sustainability impacts statement”. This statement is being prepared in connection with the implementation of our sustainability report.

(from Final Report on draft Regulatory Technical Standards, 2. Feb. 2021, Annex I, tabel 1)

To create a complete overview of our overall negative and positive impact and key areas of focus, Nordic Solar has planned to map our financial products based on a life cycle assessment from the production, of operation and for disposal and recycling. Based on the analysis, a CO2e inventory* will be prepared for the individual products. Our life cycle work is planned to be initiated in 2022.
[*CO2e – CO2-equivalent represents the overall greenhouse gas effect for all climate gasses].

Sustainability risk policy and investment decision process

Nordic Solar wishes to reflect environmental, social aspects or managment events that may have an actual or potential, significantly positive or negative impact on the value of the investment. We call this type of risk “sustainability risk”. That type of risk is closely associated with sustainable investments.

At Nordic Solar, we will integrate the sustainability risk assessment into the investment process. This is done to ensure that investors are fully informed in relation to actual and transitional sustainability risks in relation to our financial products and their returns. We have therefore drawn up a policy on how to integrate sustainability risk in the investment decision-making process. The actual implementation of the policy has been initiated and expected to be completed on the 1st of October 2021.

Overall we are working with the below mentioned focus points in connection with our policy for integration, integration of sustainability risks in the investment decision-making process and our financial products:

  • Effective management process and systematic follow up:

Systematic identification, prioritization and management of the most significant areas of influence, where we respectively contribute and damages sustainability in connection with the development and operation of our products. This is done, among other things, through a formalized value chain and materiality analysis, which is carried out annually in connection with the preparation of the sustainability report, which is also part of our overall risk assessment process for our financial products.

  • Creating full transparency and harmonization:

By complying with EU regulations and technical standards as well as using standards and framework tools for sustainable and responsible business management and investment, we create transparency in our financial products and decision-making processes, hereby taking into account our investors and other stakeholders.

  • Responsible value creation and active ownership:

To ensure long-term value creation and sustainable development, we work with active ownership in dialogue with our partners and suppliers, to promote that they also integrate environmental, social and managerial relationships into their business models, reporting and stakeholder involvement.

  • Follows the EU’s official screening principles for environmental goals:

Nordic Solar works actively in relation to screening of our financial activities in relation to the environmental objectives identified in the EU Taxonomy. Screening results are published in our sustainability report.

In connection to our work with risk management of climate changes and environmental impact, we use ‘Task Force on Climate related Financial Disclosures’ (TCFD). This standard focuses on both the possibilities and risks our financial products create. This includes both the physical and the transitional risks that exist in connection with climate change and environmental impacts. The method indicated in TCFD is generally used in connection with Nordic Solar’s sustainability risk management and in our sustainability report.

In our remuneration policy we have integrated a consideration for sustainability risk. So that it in our policy for remuneration it appears that robust and effective risk management is also encouraged in relation to sustainability risks. Furthermore that we have a remuneration structure that ensures that no increased investment risk is taken to promote sustainable investments.

The EU Taxonomy

The EU Taxonomy is a common classification system for sustainable economic activities. Nordic Solar will from now on work actively in relation to the screening of our economic activities in according with the EU Taxonomy’s identified environmental goals. Here our economic activities are qualified as environmentally sustainable, if they contribute significantly to one or more of the six environmental goals and does not significantly damage the other environmental goals. Moreover we must ensure fulfillment of social minimum guarantees and carry out screening according to the EU stipulated technical screening criteria.

The six environmental goals:
a) Counteracting climate change
b) Adaptation to climate change
c) Sustainable use and protection of water and marine resources
d) Transformation into a circular economy
e) Prevention and control of pollution
f) Protection and restoration of biodiversity and ecosystems.

After the 1st of December 2022, it will be disclosed, for each of our financial products, to which of the six environmental goals it makes a significant contribution, by investing in the products. Including disclosure of how our investment projects contribute directly or indirectly to environmental objectives and to what extent. For the goals that are contributed to indirectly, it must also be ensured how no significant damage is done. This information will, after the date above, be available in the information about the individual products on our website, as well as in our sales material.

Nordic Solar is in the process of incorporating the process for screening in relation to the EU Commission’s technical the screening criteria. For the use of screening and risk estimation of our financial products, we use e.g. EU’s new benchmark standards: EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks.

They are incorporated into our screening process and the overall screening process is published in our sustainability report for 2021.

More on the sustainability regulation

In September 2015, the UN General Assembly adopted the ‘2030 Agenda’, which set the global frame for Sustainable Development. The starting point for the agenda is the UN’s 17 world goals and is called Sustainable Development Goals (SDG). The global goals are based on the three aspects of sustainability: social, economic and environmental. On the basis of this, the EU Commission developed the EU Green Pact, which was published on December 11th 2019.

The EU Green Pact aims to ensure sustainability, increase resource efficiency, promote the circular economy and create climate neutrality and resilience. Here, the EU commits, among other things, to three ambitious climate and energy goals by 2030.

To achieve the goals, the financial sector is involved to promote sustainable financing and green investments. This is initiated through the EU Commission Action Plan. Among other things, the plan includes the EU regulation on sustainable financing, the so-called ESG Regulation (ESG: Environmental, Social and Governance).

The Regulation applies to companies in the financial sector in relation to their publication of their sustainability (ESG) information related to their financial products.

The purpose of the Regulation is to harmonize financial investment information about sustainability aspects. This is so that investors can assess the environmental and social sustainability of investments, and make qualified investment decisions.

Here you can read more about the ESG-regulation itself.