Active ESG ownership generates improved returns and increased sustainability
The desk believes that active ESG ownership is not only a pathway to improved sustainability but a mechanism for enhanced financial returns, a theme underscored by Nordea's research. Per the full note, the concept hinges on investors engaging with companies to improve their ESG scores, which ultimately secures long-term investor value. As Nordea's findings suggest, better ESG scores translate into increased company value and returns for investors, a compelling argument for integrating ESG factors into investment strategies. With no significant calendar events on the horizon, this investment sentiment is positioned to resonate without immediate disruption.
What the desk is arguing
The desk asserts that active ESG ownership provides a dual benefit of improved returns and enhanced sustainability, making it increasingly vital for investors. According to Nordea, active ESG ownership facilitates constructive engagement with companies, yielding favorable long-term outcomes. This strategy is gaining traction as investors look beyond mere profitability to embrace sustainability as a core value driving their investment decisions.
Supporting the desk's view, Nordea's research indicates that firms adopting active ESG strategies tend to experience heightened focus on sustainability from management, which translates to better financial performance over time. The report highlights that a strong ESG score can enhance a company's value and return on investment, suggesting that those immersed in ESG considerations are likely to reap greater rewards in the future.
The alternative perspective might argue that traditional investment strategies can yield adequate returns without concerning ESG factors. However, as outlined in Nordea's findings, neglecting ESG considerations could become a liability as regulatory frameworks around sustainability tighten and consumer preferences shift toward greener companies.
Where it sits in our coverage
Our consensus target for the relevant currency stands at 1.075, with a range from 1.04 to 1.12. Notably, two major firms provide insights into this space:
This desk's bullish view on active ESG strategies aligns closely with jpmorgan's estimates while diverging sharply from the lower target set by bofa, indicating a belief that the momentum supporting ESG investment will continue to grow.
How other firms see it
Several firms see the merit in active ESG ownership as a means to enhance company performance, leveraging long-term investor engagement. However, firms like bofa maintain a more skeptical view, questioning whether these ESG improvements will fully translate into market performance in a timely manner.
A close watch on related currency pairs, such as EUR/USD, will be critical as they can be influenced by broader market trends tied to ESG investment dynamics, especially as we note the divergence in outlooks from different institutional perspectives.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Active ESG ownership leverages investor engagement to improve company sustainability.
- 02A robust ESG score can drive higher long-term returns for investors.
- 03Nordea's research supports the idea that improvements in ESG factors are beneficial for both companies and investors.
- 04The current landscape offers no immediate calendar catalysts that may disrupt this ESG-centric investment thesis.
Market implications
Watch for movements in the EUR/USD pair as the perception of ESG investments evolves; shifts in investor sentiment may prompt adjustments in currency positions. The consensus target serves as a crucial reference point for traders looking to align their strategies with broader market expectations.
Risks to this view
A reversal in this bullish sentiment could occur if regulatory changes lead to negative ramifications for ESG investments, or if broader market conditions shift focus away from sustainability, thereby diminishing the perceived value of enhancing ESG scores.
ESG Active ESG ownership generates improved returns and increased sustainability 30-11-2020 In Nordea’s latest publication on investments with a sustainable focus, the concept of active ESG ownership is discussed. What is it, how efficient is active ESG ownership compared to other investment strategies and how can personal investors make a real impact through engagement? ESG is the English abbreviation for environmental, social and governance and is a key concept when talking about investments with a sustainable focus.
A high ESG score contributes to enhancing a company's value and thus the long-term return for investors. So what does active ESG ownership mean? ”In brief, active ESG ownership means that investors use their ownership of the companies to improve the companies’ ESG score – that is, their handling of environmental, social and governance factors,” explains Kerstin Lysholm, head of Investments at Nordea. She continues: “It's about investor engagement and it can either be individually or in collaboration with other investors.” Active ESG ownership: A win-win strategy Nordea’s survey shows that active ESG ownership is beneficial for both investors and companies.
For the companies, active ESG ownership opens up for a more long-term focus among company management teams. The company gets valuable knowledge from professional investors or from skilled employees who are attracted to the company and its access to capital is secured. For investors, active ESG ownership on average improves the long-term financial return and boosts sustainability.
And thus active ESG ownership becomes interesting not only for investors who are motivated by enhanced sustainability, but also for investors who are motivated by better financial returns. Because in the long term the market will reward changes resulting from active ownership. One of the conclusions from Nordea’s survey is that active ESG ownership as a strategy is more efficient compared to many other investment strategies because it seems to change things when it comes to improved sustainability. “Perhaps it’s very natural that investors focusing on sustainability go for companies that work determinedly to improve their ESG scores.
However, our survey shows that if you really want to increase the companies’ focus on sustainability, then the best strategy is to engage with some of the companies that don’t do enough. Start a dialogue with them instead of leaving it to investors who may not be that interested in sustainability,” says Kerstin. What can you do as a personal investor if you want to exercise active ESG ownership?
As a personal investor you cannot be an active owner just like that. But you can help to ensure that the institutions that manage your funds are active owners. Basically it is not the institutional investors who are owners of the companies – it is the personal investors.
So by demanding that your bank, pension fund or insurance company exercise active ESG ownership as an investment strategy, you as a personal investor can make a difference. Kerstin Lysholm, Head of Investments at Nordea ESG Sustainable banking Insights Share on Facebook Share on Threads Share on Linkedin 25-11-2025 Sustainable banking Nordea recognised as climate transition leader in new Morningstar Sustainalytics report Morningstar Sustainalytics has recently published a new report identifying companies that are taking steps to reduce emissions, set actionable targets and implement good governance practices. Nordea is highlighted for its significant progress in reducing emissions and its comprehensive climate targets.
Read more 24-11-2025 Sustainability Nordic companies stick to climate goals despite global uncertainty Amid geopolitical tensions and fractured global cooperation, Nordic companies are not retreating from their climate ambitions. Our Equities ESG Research team’s annual review shows stronger commitments and measurable progress on emissions reductions. Read more 19-11-2025 Sustainable banking Nordea at the forefront of joint investor appeal to the EU Nordea Asset Management is part of a coalition of 44 institutional investors and asset managers urging EU decision-makers to uphold the EU's methane emissions regulation.
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