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If we do not move, we may be able to move the companies we invest in.

There is a phrase called "voting with your feet", which means leaving something or someone you disagree with, rather than trying to change them. In our industry, we might also say that we vote with our wallets. We do this when we sell something we do not want to own – or, conversely, seek particularly promising investments.

Influencing the companies

But we do more than that. We also try to influence the companies we own. We vote at annual general assemblies, we have direct dialogue with management or try to work with other committed shareholders. And we do believe that, sometimes, we can push the development in the desired direction.

Our Norwegian equity portfolios consist of companies we know well, in many cases after years of ownership and a number of opportunities for dialogue with management. In the fund Pareto Aksje Norge, which has a relatively low turnover rate, we have in the past year engaged in dialogue with a total of 25 companies (almost the entire portfolio) on corporate governance, environment and (to a lesser extent) social conditions. These are companies we know well, with direct lines to top management.

This is not altruism. We do it to understand and control the risks in the companies we own. Thus, we have a good commercial justification for integrating ESG themes into our investment management.

Only in the fund Pareto Aksje Norge, we have engaged in dialogue with a total of 25 companies (almost the entire portfolio) on ESG issues over the past year.

Integration of ESG

In Pareto Global we have also had direct dialogue with several companies on such topics. With Ralph Lauren we have addressed various ESG related issues; we have confronted Ryanair with labour relations and greenhouse gas emissions; and we have asked Polaris about damage and recall of vehicles. In our dialogue with Attendo, staffing at nursing homes and possibly "ghost staffing" in hourly lists have been discussed (the latter is strongly denied). With Michelin we have raised questions about both environment and corporate governance, the latter to understand both the structure and the corporate electoral system.

We do not vote at general meetings merely to vote. If the company has a completely uncontroversial agenda with an obvious outcome and our unconditional approval, we will gain little if we put our extra votes on the scale. If it is about securing a majority or protesting a proposal, things are different.

Thus, we have voted for the rights issue in Norwegian Air Shuttle, where the proceeds were necessary to ensure further freedom of action. We have also voted in Bonheur, where we have teamed up with other investors to clarify internal billing issues. And we have voted in both TGS and Spectrum, which earlier this year decided to merge.

Interestingly, we have voted on both sides of that issue. For Pareto Aksje Norge, which owned TGS, we voted in favour of the merger. For Pareto Investment Fund, which owned Spectrum, we voted against – not because it did not make sense commercially, but because our portfolio managers were dissatisfied with the exchange ratio.

Interestingly, we have voted on both sides of that issue.

In the best interests of the unitholders

If this may seem paradoxical, it underlines our primary compass: the consideration of the best interests of unitholders. The portfolio managers discussed this with our chief investment offficer and were given the obvious advice that they should follow their beliefs, taking into account the best interests of the unitholders. For TGS shareholders, the merger was obviously profitable. For Spectrum shareholders, the exchange ratio appeared to be less than generous on the part of the big brother.

We have also cast votes in foreign companies. There we do not receive automatic notification from the custodian, so we must follow ordinary and extraordinary general meetings ourselves. We also have to go through a slightly more complicated digital maze with registration and codes.

This year Pareto Global has voted at general meetings in Ryanair (due to issues such as compensation and board election), CVS Health (compensation) and EssilorLuxottica (board election). Beyond this, we have judged the additional time spent on voting abroad would not be in the best interests of unitholders.

Incidentally, our chief investment officer is now elected as a member of the Norwegian Air Shuttle nomination committee. This represents a small extension of our work for good corporate governance in the companies we are invested in.

Report on responsible investments

Read more about how we integrate ESG into our management in our eighth report on responsible investments:


This document sets out guidelines for responsible investments undertaken by Pareto Asset Management on behalf of our unitholders and individual asset owners. The purpose of the policy is to prevent Pareto Asset Management from contributing to the violation of human rights, labor rights, corruption, environmental damage or other unethical actions. Furthermore, we consider it important to integrate sustainability assessments into our investment processes, as this can also affect the long-term value of our investment.

We expect the companies that we invest in to comply with the same principles.