PFA aims to be an active owner, monitoring and being in contact with a large number of the companies we invest in on an ongoing basis. We want to influence companies towards responsible value creation and thus ensuring the highest possible long-term investment returns. Therefore, PFA also has a formalised active ownership dialogue with the companies that do not comply with our policy for responsible investments.

The process for dialogue with companies

The process for dialogue with companies

PFA does not want to be part of any illegal activities or activities that violate international conventions. As a responsible investor, PFA prioritises having a dialogue with companies in order to influence their behaviour. During the dialogues with companies, PFA’s Responsible Investment Board continually assesses whether the company can still be trusted or if the company should be divested and excluded. Below, you can see an overview of the companies that PFA has entered into dialogues with.

Current dialogues

Overview of companies that PFA has entered into dialogues with

Current dialogues
   

Hangzhou Hikvision Digital Technology PFA entered into a dialogue in February 2020
Status: Ongoing

         
Reason for initiating dialogue
PFA, together with our external advisor, Sustainalytics, has entered into a dialogue with Hangzhou Hikvision Digital Technology on the basis of accusations of violating human rights when selling surveillance equipment.

Substance of the dialogue
The dialogue is aimed at ensuring that Hikvision can guarantee that their surveillance tools are not used for purposes that violate human rights. We want the company to implement a robust due diligence programme that brings the company’s policies and procedures in line with international human rights standards. The company must also focus on being able to deliver insightful and transparent reporting on how the management deals with human rights issues related to the company’s products and services.

History of the dialogue and PFA’s assessments
- February 2020: Our external advisor contacts the company to initiate a dialogue on how Hikvision manages human rights and the associated risks. The company recognises the challenges that have been brought up and provides more detail on the issues. 
- May 2020: PFA joins the dialogue. 
- August 2020: PFA has a status meeting with Sustainalytics concerning Hikvision and how the dialogue is progressing and how it is assessed. Hikvision has hired an external law firm to prepare a report about Hikvision’s role in projects in the Xinjiang region, and Hikvision must assess the possible implementation of the report’s recommendations. Hikvision reports that they have gained greater understanding of the risk of their products and services being used in a manner that violates human rights. Hikvision accepts that they must have better due diligence practices and more transparency. Hikvision has not submitted bids for projects in Xinjiang since 2018. 
- November 2020: PFA has a status meeting with Sustainalytics about Hikvision.
- The dialogue is still in progress.

Macquarie PFA entered into a dialogue in November 2018
Status: Ongoing

         
Reason for initiating dialogue
In October and November 2018, it was found that Macquarie has participated in dividend tax fraud.

Substance of the dialogue
PFA is a co-owner of TDC together with Macquarie, and we have therefore ever since we became aware of the issues had a critical dialogue with Macquarie’s management team and have also demanded a full report on their involvement and clarification on which structural, process-related, cultural and managerial changes the bank has undertaken to ensure that such actions will not repeat themselves.
Concerning the investment in TDC, as an owner we have an obligation to all of PFA’s customers, the TDC employees and Danish society at large to protect our investment. When signing the acquisition agreement, the consortium behind the acquisition also signed a binding agreement declaring that all tax payments must be made in accordance with Danish tax rules. From the beginning, it has been a critical factor for PFA to ensure that none of the investors in TDC can pull out tax-free dividends without the approval of the Danish authorities.

History of the dialogue and PFA’s assessments
- Since 2018, PFA has been in dialogue with Macquarie after their participation in dividend tax fraud was made public.
- PFA continues its critical dialogue with Macquarie on the dividend tax issue and has decided not to enter into new partnerships with Macquarie before we have gotten to the bottom of the precise facts of the case. How this investigation turns out will be a critical factor in deciding whether we want to do business with them in the future.
  

Danske Bank PFA entered into a dialogue in March 2017
Status: Ongoing

         
Reason for initiating dialogue
From 2007-2015, Danske Bank processed illegal transactions in its East European branches.

Substance of the dialogue
As the case has developed, PFA has continually asked for more information about Danske Bank’s work with reviewing earlier high-risk transactions and how resources are allocated to its anti-money laundering processes. PFA is clear about its expectations about the bank continuing to be transparent about its initiatives. PFA recognises that the bank has gone through a transformative process, and we would like to continue to influence Danske Bank to move in the right direction. Therefore, PFA has also supported ‘cleaning up’ Danske Bank’s boards of directors so that the bank can have a new team on the board that can focus on the business and the important relationships with investors, customers and society at large.

History of the dialogue and PFA’s assessments
- PFA has been in dialogue with Danske Bank since March 2017.
- When several top employees were terminated, PFA was in dialogue with a member of the executive board.
- PFA is still in dialogue with Danske Bank and we expect that the bank will become more transparent and restore the trust it has lost.
- Most recently in September 2020, PFA asked Danske Bank about the status of its ‘clean up’ and efforts to create a new management team, implement anti-money laundering measures and also asked about the case regarding errors in collecting debts from the bank’s Danish debt collection customers.
- The dialogue is not yet completed. 
  

Mærsk PFA entered into a dialogue in October 2016
Status: Ongoing

         
Reason for initiating dialogue
The scrapping of ships and working with the Shree Ram shipyard

Substance of the dialogue
PFA has been in dialogue with Mærsk about their policy for scrapping ships and their work with the Shree Ram shipyard in India. The dialogue has been focused on the work with upgrading the facilities in India in order to ensure that the ships are scrapped in an environmentally friendly manner and, among other things, how it is ensured that the components from the ships do not come into contact with the intertidal zone. The dialogue has also been about the standard used when Mærsk scraps its ships outside of the EU. We will continue our dialogue with Mærsk focused on ensuring that they comply with existing environmental legislation, use external verification and comply with the Hong Kong convention and the EU’s list of approved shipyards for scrapping ships.

Phillips 66 PFA entered into a dialogue in 2016
Status: Ongoing

         
Reason for initiating dialogue
A wish for better policies

Substance of the dialogue
Together with other investors, PFA has contacted Philips 66 in connection with the company’s investment in the Dakota Access Pipeline Project (DAPL). Philips 66 has agreed to enter into a dialogue, and PFA’s focus is on determining how the company will improve its policies and its behaviour, with a particular focus on the UN special rapporteur’s assessment of negative impacts on aboriginal people’s rights.

PFA was focused on the dialogue with Philips 66 in 2018.

Samsung Electronics PFA entered into a dialogue in December 2016
Status: Ongoing

         
Reason for initiating dialogue
Accusations of corruption

Substance of the dialogue
PFA’s external asset manager which has invested in this company has been in dialogue with Samsung Electronics’ management team to address the lack of transparency and accusations of corruption. Samsung Electronics has launched initiatives to improve their governance, and PFA will monitor the case together with its external asset manager.

Johnson & Johnson PFA entered into a dialogue in December 2016
Status: Ongoing

         
Reason for initiating dialogue
Together with our external advisor, Sustainalytics, PFA has been in dialogue with Johnson & Johnson (J&J) concerning cases related to product safety.

Substance of the dialogue
We want the company to reduce the risk of similar cases occurring by incorporating its experience in safety protocols and control procedures. This will allow the company to be better able to ensure that consumers will not be harmed or get sick and, as a result, reduce the risk of future lawsuits.

At the same time, the company is being encouraged to develop guidelines for increased transparency concerning product data in order to communicate potential observations about their products to consumers as early as possible.

History of the dialogue and PFA’s assessments
- The dialogue began in December 2016, when J&J - after being contacted by PFA’s external asset manager - reported that they are implementing a uniform quality assurance and compliance programme across the company world wide. In addition, it is ensured that all production facilities operate in accordance with health and safety legislation and the company’s own quality standards.
- In July 2018, PFA participated in a webinar held by J&J where the company’s compliance and quality assurance processes were elaborated upon. In addition, a new common safety standard was presented which would be applied across the Group.
- In November 2019, PFA had a phone meeting with J&J where PFA obtained insight into the company’s views regarding current lawsuits concerning talcum powder, opioids and Risperdal.
- In April and May 2020, there was a dialogue concerning COVID-19 in which PFA, among other things, asked how J&J is enforcing its stringent R&D protocols despite the rush to create a potential COVID-19 vaccine.
- The dialogue with the company is still ongoing.

Enbridge Inc. PFA entered into a dialogue in December 2016
Status: Ongoing

         
Reason for initiating dialogue
A wish for better policies

Substance of the dialogue
Together with other investors, PFA has been in dialogue with Enbridge on how the company can use its influence in connection with its investment in the Dakota Access Pipeline Project (DAPL). The dialogue with Enbridge has been focused on how the company will improve its policies and guidelines and particularly how it will focus on the UN special rapporteur’s assessment of DAPL’s negative impact on the rights of aboriginal people. Enbridge has stated that the company is working on using its influence and updating its policies so that they are in line with international standards for this area.

PFA was in dialogue with Enbridge throughout 2018 as Enbridge is the primary stakeholder of DAPL, and PFA monitored Enbridge’s efforts to promote dialogue with the DAPL consortium.

Energi Transfer Equity og datterselskabet Energy Transfer Partners PFA entered into a dialogue in December 2016
Status: Ongoing

         
Reason for initiating dialogue
Negative impact on the rights of aboriginal people

Substance of the dialogue
PFA has attempted to establish a dialogue with Energy Transfer Equity, the parent company of Energy Transfer Partners, which is building and operating the Dakota Access Pipeline. This was for the purpose of putting the spotlight on the Dakota Access Pipeline’s negative impacts on the rights of aboriginal people in the area where the oil pipeline is being constructed. Neither PFA nor PFA’s screening and engagement company have succeeded in establishing a dialogue with Energy Transfer Equity.

PFA supports the UN special rapporteur’s assessment of the case involving the Dakota Access Pipeline, and the activities are in violation of PFA’s policy for responsible investments. As the company does not want to enter into a dialogue, PFA has divested its equity holdings and excluded Energy Transfer Equity and its subsidiary, Energy Transfer Partners.

JBS SA PFA entered into a dialogue in November 2015
Status: Ongoing

         
Reason for initiating dialogue
Issues with bribery, labour rights, policies that need improvement and transparency

Substance of the dialogue
Together with 30 international investors, PFA is encouraging the Brazilian company JBS SA to implement a number of changes. The group of investors is encouraging the company to: Address issues with bribery in Brazil, ensure labour rights are respected in the supply chain and that remuneration is structured in such a way as to include ESG assessments of executive salaries. PFA had a meeting with the company where they presented their new compliance process. The new compliance process includes the implementation of a whistleblower scheme, and external consultants are used to ensure it is implemented.

PFA will continue to focus on the company and its implementation of the compliance processes.

Volkswagen PFA entered into a dialogue in September 2015
Status: Ongoing

         
Reason for initiating dialogue
In September 2015, the public learned that Volkswagen had cheated on emission tests for their diesel engines for a long period of time. The case was later dubbed “diesel gate”, and PFA has monitored the company’s subsequent development.

Substance of the dialogue
PFA is monitoring developments in the company, including the initiatives it is launching to change practices and ensure that Volkswagen’s products comply with both international and local environmental standards. PFA is part of a class action lawsuit against the company which has resulted in the company refusing to hold investor-related meetings with PFA. PFA is working on establishing a direct dialogue with Volkswagen. Together with ten other investors, PFA has contacted the company to encourage it to enter into a dialogue. The aim is to address the lack of transparency. If this does not happen, PFA’s RI board will re-assess the situation.

History of the dialogue and PFA’s assessments
- Since 23 September 2015, PFA has been in dialogue with Volkswagen about the cheating on the emission tests for certain diesel cars.

Completed dialogues

Completed dialogues
   

Rio Tinto PFA entered into a dialogue in 2017
Status: Completed

         
Reason for initiating dialogue
Rio Tinto has used “riverine tailings disposal”, which is harmful to the environment.

Substance of the dialogue
Since 2017, PFA has been in dialogue with the company in order to determine how its mining activities in Indonesia impact the environment. The company has confirmed that they are actively working on monitoring their impact on the local environment and that it has established areas to stimulate a regeneration of nature. PFA confirms that data from Indonesia show that the company’s practices are ‘best practice’ and that alternative methods for the disposal of wastewater would not be better.

For that reason, PFA has concluded its dialogue with the company about its environmental impact in Indonesia.

History of the dialogue and PFA’s assessments
- PFA has been in dialogue with Rio Tinto since 2017
- In that connection, PFA has concluded that the company’s restoration activities are ‘best practice’.
- The dialogue has been concluded.

Chevron PFA entered into a dialogue in September 2017
Status: Completed

         
Reason for initiating dialogue
A desire for more transparency about Chevron’s lobbying.

Substance of the dialogue
PFA has chosen to support a proposal that the company should publish a report on their lobbying activities, that the chairman of the board of directors should be independent and that it should be possible for shareholders holding more than a 10 per cent of the shares to convene an extraordinary general meeting. PFA has chosen to not support a proposal that the company should prepare a report on their transition towards a “low-CO2 economy” - the reason for this is that the company has already taken steps in that direction by publishing their ‘Managing Climate Change Risk’ report which already deals with this topic and which indicates that there has been a change in attitude since the annual general meeting in 2016.
  

Freeport-McMoRan PFA entered into a dialogue in 2016
Status: Completed

         
Substance of the dialogue
Since 2016, PFA has been in dialogue with the company in order to determine how its mining activities in Indonesia impact the environment. The reason for initiating the dialogue was the company’s use of “riverine tailings disposal”. The company has confirmed that they are actively working on monitoring their impact on the local environment and that it has established areas to stimulate a regeneration of nature. PFA’s advisor has confirmed that data from Indonesia indicate that the company’s practices are ‘best practice’ and that alternative methods for the disposal of wastewater would not be better. For that reason, PFA has concluded its dialogue with the company about its environmental impact in Indonesia.
  

Walmart de Mexico PFA entered into a dialogue in October 2015
Status: Completed

         
Substance of the dialogue
PFA has excluded Wal-Mart Stores Inc, but not Wal-mart de Mexico (Walmex) which, among other things, operate Walmart stores in Mexico and Central America. PFA has been in dialogue with its advisor in this area, and the dialogue confirmed that Walmex does permit its employees to be members of a labour union. Thus, Walmex is not in violation of PFA’s guidelines - unlike Wal-Mart Stores Inc, which has been excluded.
  

Sun Hung Kai Properties PFA entered into a dialogue in May 2015
Status: Completed

         
Substance of the dialogue
PFA’s external asset manager, who has invested in this company, has contacted the company to address potential human rights violations associated with their security contracts in Nauru and Papua New Guinea. The company has stated that they do not plan to extend their contracts. Together with the external asset manager, PFA will continue to monitor the case and how it develops.
  

GlencoreXstrata PFA entered into a dialogue in October 2014
Status: Completed

         
Reason for initiating dialogue
- Environmental impacts from their mine in Mount Isa, Australia
- Activities in Western Sahara

Substance of the dialogue
PFA has been in dialogue with the company about the environmental impact of its mine in Mount Isa, Australia. PFA and the company have discussed the progress made in reducing air pollution and how the company works towards minimising the impact on water quality near the mine. PFA has also been in dialogue with the company about its human rights due diligence in Western Sahara. At the end of 2017, the company confirmed that they were no longer active in West Sahara and that the company’s human rights policy now also covers activities in conflict zones. In 2018, PFA sold off the majority of its investment in Glencore.

After the sale, PFA will no longer prioritise the direct dialogue with the company but will instead have the active ownership dialogue managed by the screening and engagement company GES and monitor the company’s progress via GES. 
    

Sygenta PFA entered into a dialogue in December 2014
Status: Completed

         
Reason for initiating dialogue
In December 2014, PFA was presented with a report and a video about very objectionable issues in Syngenta’s supply chain.

Substance of the dialogue
PFA asked GES to prepare an analysis of the company’s practices, and PFA initiated its own dialogue with the company. PFA was waiting for an investigation by the Fair Labour Association (FLA) concerning Syngenta’s supply chain (“Procurement price and credit practices in Syngenta hybrid seeds supply chain, India”), which was published in July 2015. In 2016, PFA followed up with the company on their work in this area. PFA has found that Syngenta, following recommendations from a multi stakeholder consultation process, has launched two pilot projects in India aimed at ensuring that minimum wages are paid to workers in the company’s supply chain. The projects lasted until autumn of 2017, and PFA will await the results of the pilot projects.

Syngenta has since been acquired by ChemChina, and PFA no longer owns any equity in the company. The dialogue has therefore been closed.

History of the dialogue and PFA’s assessments
- In December 2014, PFA was presented with a report and a video about very objectionable issues in Syngenta’s supply chain.
- In 2016, PFA followed up with the company on their work in this area.
- The dialogue has been completed.
   

Cement Roadstone Holding PFA entered into a dialogue in 2014
Status: Completed

         
Reason for initiating dialogue
Possible association with an Israeli company that was possibly involved in activities that violate international conventions on the West Bank.

Substance of the dialogue
Since 2014, PFA has been in dialogue with the company to investigate a number of issues surrounding the company’s association with an Israeli company and its potential involvement in activities that violate international conventions on the occupied West Bank.

In January 2016, the company made it public and confirmed that it has divested itself of its ownership stake in the Israeli company. Therefore, as the association is no longer relevant, PFA’s RI Board has decided to close the dialogue.
   

Nordea Bank PFA entered into a dialogue in April 2013
Status: Completed

         
Reason for initiating dialogue
Money laundering case

Substance of the dialogue
PFA has been in dialogue with the company about a money laundering case. Nordea Bank has launched an internal investigation of the transactions, some of which are up to five years old. In the mean time, new measures have been introduced to ensure that similar incidents cannot take place again. PFA assesses that the company has implemented sufficient measures to comply with anti-money laundering laws in the future. As part of its investment approach, PFA has been engaged in an ongoing dialogue with the company.

Adani PFA entered into a dialogue in April 2013
Status: Completed

         
Reason for initiating dialogue
Potential damage to the environment in Australia

Substance of the dialogue
PFA’s external asset manager has been in dialogue with Adani Ports and Special Economic Zone’s (Adani) management team to address potential environmental damage in Australia and the company’s general approach towards sustainability. Adani has informed PFA that they have not made use of their permit from the Australian government to dump soil near the Great Barrier Reef - instead, Adani has chosen to discard the soil on land. Historically, Adani has generated a lot of turnover from selling coal, but the company now has an objective of reducing the turnover from coal from 50 per cent to 20 per cent. PFA’s asset manager will maintain the dialogue with the company.
   

Chevron PFA entered into a dialogue in June 2010
Status: Completed

         
Substance of the dialogue
PFA has followed up on the company’s latest annual general meeting where PFA supported a resolution on the importance of the company reporting on its work on a strategic adaptation of activities to address climate change up until 2035.
   

Ryanair PFA entered into a dialogue in May 2010
Status: Completed

         
Reason for initiating dialogue
Labour rights

Substance of the dialogue
PFA’s screening and engagement company, GES (now Sustainalytics) has, on behalf of PFA and other investors, been in dialogue with Ryanair to investigate questions on the company’s practices when it comes to worker rights in the context of the ILO conventions. They have not found clear violations of international conventions when it comes to labour market issues.

PFA has observed, with concern, Ryanair’s approach to running their business, including concerns about labour market issues for their employees and, most recently, the case brought before the Danish Labour Court. The case shows that the company is not sufficiently interested in adapting to local conditions and managing the associated risks. PFA’s RI Board has thus on this basis assessed that PFA should not invest in the company.
    

Walmart PFA entered into a dialogue in February 2006
Status: Completed

         
Reason for initiating dialogue
Labour rights and sustainability

Substance of the dialogue
Together with 11 other investors, PFA has contacted the company to initiate a dialogue on labour rights and sustainability. Walmart has been excluded from PFA’s investment universe and the dialogue is therefore closed.

Nestlé PFA entered into a dialogue in July 2006
Status: Completed

         
Substance of the dialogue
PFA has been in dialogue with the company to discuss their sustainability programme, including how to prevent the use of child labour in their supply chain. PFA has visited Nestlé in the Ivory Coast, where, among other things, Nestlé has implemented a ‘Child Labour Monitoring and Remediation System’ (CLMRS) aimed at identifying child labour and finding solutions to the problem. PFA will maintain the dialogue with Nestlé to follow up on their progress and to discuss the scope of their sustainability programmes.
      

Chevron PFA entered into a dialogue in May 2003
Status: Completed

         
Reason for initiating dialogue
The acquisition of Texaco in 2001

Substance of the dialogue
PFA is aware of the environmental risks that Chevron has assumed in Ecuador in connection with their acquisition of Texaco in 2001. In 1995, Texaco was ordered by a court to pay for the costs of fixing the environmental damage they caused in Ecuador. After paying the costs, Texaco’s activities and obligations in Ecuador were taken over by their joint venture partner, Petroecuador. In 2013, a court ordered Chevron to pay compensation for Texaco’s activities, but this lawsuit was subsequently rejected in the United States in 2014 and 2016 due to charges of corruption and bribery during the trial in Ecuador. On the basis of the court ruling from the United States, PFA has decided not to enter into a dialogue with Chevron about Texaco’s former activities in Ecuador unless new information emerges that would make it relevant.