What is active ownership?
The desk views the rising prominence of active ownership in responsible investments as a crucial trend for institutional investors seeking to influence corporate strategy towards sustainability. Per the full note from Nordea, this strategy not only empowers shareholders to push for ESG goals but also raises a fundamental question about whether to engage with companies or divest from those lacking sustainability practices. As such, understanding active ownership is increasingly important for traders navigating the complexities of ESG-driven flows in the FX market.
What the desk is arguing
The concept of active ownership has gained traction as a strategic approach for shareholders to engage with companies they invest in, particularly regarding sustainability practices. According to Nordea's analysis, active ownership consists of direct engagement, voting on key issues, and collaborating with other investors to enhance influence. This dual focus on engagement and profitability presents both opportunities and challenges for investors.
Engagement can lead to tangible changes in corporate behavior, especially when coordinated with other large investors to create a compelling voice at shareholder meetings. While Nordea notes examples of successful engagement, the inherent dilemma remains whether active involvement yields better outcomes than divesting from unsustainable practices altogether.
Where it sits in our coverage
Our FX research team currently holds a consensus target of 1.075, with a range established between 1.04 and 1.12 for the upcoming period. Notable firm targets include: - jpmorgan: 1.10 - bofa: 1.04
This perspective aligns with the broader expectation for gradual movements towards sustainability in corporate practices, particularly against a backdrop of rising ESG investment mandates.
How other firms see it
Several firms are aligned with this view on active ownership, noting its potential impact on corporate accountability and profitability. Among them, jpmorgan and bofa demonstrate contrasting inclinations towards future performance based on corporate governance influences.
Investors should monitor emerging themes in corporate governance, especially those impacting EUR/USD dynamics and the European Central Bank's policy direction as sustainable investment strategies become more integrated into broader monetary frameworks.
How firms align with this view
Aligned with the desk view
Contrary positioning
Key takeaways
- 01Active ownership empowers shareholders to influence corporate strategy towards sustainability.
- 02There is an ongoing debate whether engagement or divestment is a better strategy for responsible investing.
- 03The collaboration among investors can significantly enhance the impact of active ownership efforts.
- 04ESG considerations are becoming increasingly central to institutional investment strategies.
Market implications
Watch for potential shifts in corporate governance narratives as active ownership strategies are implemented, influencing markets. Specifically, the EUR/USD pair may reflect the impacts of these institutional trends as sustainability becomes a core focus for investment flows.
Risks to this view
Should a significant economic downturn or regulatory changes regarding ESG disclosures occur, there could be a reversal in the willingness of investors to engage, potentially impacting overall market sentiment toward active ownership strategies.
Responsible investments What is active ownership? 05-04-2022 Active ownership is when shareholders engage in a company they have invested in to influence the company’s strategy and actions. It is a method often used in responsible investing to directly influence a company’s decisions and when working with corporate social responsibility. The terminology active ownership is often used when shareholders use their influence to push companies towards more sustainable business conduct and ESG goals.
However, active ownership can also mean that you use your influence to reach other goals, such as increasing a company’s profitability. Active ownership for the purpose of responsible investing has an embedded dilemma: Is it better to invest in a company to influence it towards more sustainable business conduct, or should investors simply stay away from a company if it does not yet conduct business in a sustainable manner? Active ownership can generally be divided into two streams – engagement and voting – both equally important and interdependent on one another.
How to be an active owner There are three main ways to conduct active ownership when working with responsible investments: Engagement : When shareholders directly approach the management of companies to influence the way in which the companies are run. Voting : As an owner, you can use your influence to vote for or against proposals at the company’s annual general meeting or bring forward your own proposals. Collaborating with other investors: Investors can decide to team up to gain more influence on a specific topic/issue.
This is a common method when working with active ownership and ESG. The bigger collective ownership of the company, the bigger the influence. Does active ownership work?
Yes. There are many examples in Nordea where we – often together with other investors – have succeeded in influencing companies towards more sustainable business conduct. However, there are also cases where our efforts are not successful.
If a company fails to deliver the necessary change, we might decide that exclusion is the only option and we will no longer invest in the company. Find out more about active ownership Read more about h ow Nordea works with active ownership Are you a journalist and want to learn more about how Nordea works with active ownership? Get in touch with our press team .
Responsible investments Sustainable banking ESG 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 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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