The Nobel Foundation manages the legacy fund set up in 1900 according to Alfred Nobel’s will, the proceeds of which allow for the allocation of yearly cash prizes to Nobel laureates.
At year-end 2023 the foundation’s investment capital was allocated to equity funds (52%), alternative assets (20%), fixed income assets and cash (17%), property and infrastructure funds (9%), and 2 per cent accrued currency hedging gains. The foundation has a small investment team and therefore relies on external managers’ pooled funds. As a signatory of the PRI and the UN Global Compact the Nobel Foundation expects its managers to strictly adhere to these guidelines and principles.
External managers are required to incorporate sustainability factors within their investment process as a matter of course and avoid investing in any companies that violate any international norms relating to human and labour rights, the environment, and corruption issues. The foundation will not hold any companies that wish to invest in companies that are involved in producing controversial or nuclear weapons, or companies deriving more than 5% of revenue from coal extraction or power generation. Managers’ fund portfolios are screened annually, and any sustainability-related discrepancies will be raised. If these are not corrected it may lead to the manager being replaced.
As a unit holder in pooled funds, the Nobel Foundation seeks to work with managers that are able to use their shareholdings to positively influence investee companies towards better corporate responsibility, by voting at AGMs and engaging with company management. In less transparent alternative investment markets the Foundation will adapt its expectations accordingly but will nevertheless strive to invest in funds that offer good sustainability credentials, and it will not tolerate underlying holdings that violate its fundamental principles. The Nobel Foundation also seeks to invest in funds that offer positive sustainability outcomes alongside sufficient financial returns. This may involve investments in innovative companies that are helping to address climate change or providing resource efficiencies.
Asset managers wishing to work with the Nobel Foundation will need to demonstrate the ability to operate with the requisite portfolio restrictions and deal with investee companies that violate international norms or specific sector exclusions (e.g. coal, tobacco). They must also have a demonstrable track record in stewardship, with the means in place to positively influence investee companies towards sustainable business practices.
