Money laundering is fast becoming a thematic topic that ESG-minded investors need to give more attention to, according to Nordea Asset Management.
In an excerpt from the Nordic group’s Responsible Investments Report, the company said that money laundering was a pressing issue that had become more prevalent in recent years.
The company said: ‘Money laundering is fast emerging as the main regulatory challenge facing financial institutions. Prompted by the developments at Danske Bank, we met with several banks to gain a deeper understanding of the challenges they face in their anti-money laundering (AML) and know your customer (KYC) processes.’
Nordea AM has set out to build a framework that would allow it to make an informed judgement, as outside observers, about the risk of a bank’s AML and KYC processes being misused for money laundering and penalised accordingly.
This led to conversations with other investment companies, namely ING, Danske Bank, BNP Paribas, Swedbank and Nordea’s own compliance function, to identify a range of industry-wide issues and to identify indicators of individual exposure to AML risks.