2018 Starts with Increased Scrutiny
Welcome back! It transpired over the Christmas break that Danish pension companies PenSam and Lærernes Pension will divest their tobacco shares, following the UN Global Compact ban on the tobacco industry last year. The moves will help account for up to 1 million less Danes exposed to tobacco investments over recent years. Meanwhile, in Norway, the $1 trillion sovereign wealth fund has sought permission from the Norwegian finance ministry to extend its investments to unlisted companies, which could include private equity funds. The fund’s ethics watchdog will also increase its scrutiny in sectors affecting human rights. The Nordic Development Fund is partnering with the African Development Bank and others in the launch of a new blended finance debt fund to provide loans to off-grid energy companies in East Africa and beyond with the aim of reducing 8 million tonnes of CO2 emissions. Meanwhile, MSCI published a report examining how ESG data accumulated by companies can translate to equity markets, suggesting how a company’s ESG rating can be a financial indicator in its own right. This week, NordSIP is highlighting an interview with its sister publication HedgeNordic, where Kari Kangas, manager of the UB Timberland Fund provided by Helsinki-based United Bankers Asset Management, suggests opportunities for professional investors in the fertile forests of Finland’s southern region. (NordSIP).
Heard on E-Street
Increased scrutiny about responsible investment claims from institutional investors is to be anticipated, according to a new report prepared by Inflection Point Capital Management (IPCM), a part of the La Française Group, due to the increasing availability of information about asset owners’ activities (Investment & Pensions Europe). The Church of Sweden’s sustainable investment fund has joined as a Limited Partner of Luminar Ventures, a $60million seed stage fund focusing on upcoming digital tech companies that can contribute resources to fulfilling the UN SDGs. The $6 million stake is the first of its kind for the Church, whose investments are usually in listed companies (Business Insider Nordic).
Quote of the Week
“[Index Managers] have a duty to influence companies to promote better ESG policies… They are long-term investors, and they own everyone in the market. So they have a unique responsibility to change these companies for the better… As opposed to active managers, who if they disagree with the way a company is run, they could just divest…” – Hortense Bioy, Director of Passive Fund Research in Europe with Morningstar and co-author of the recent paper Passive Fund Providers Take An Active Approach to Investment Stewardship (Nasdaq).
Question of the Week
Which Nordic country recently established a new Sustainable Investment Forum?
Famous Last Words
“If I might just add that there are business opportunities in this [the Paris Agreement]… we have very strong policies for environmentally friendly and climate-friendly technologies, which is a small part of why the United States now has a surplus in the economy towards Norway” – Norwegian Prime Minister Erna Solberg, in a press conference with U.S. President Trump (The Local Norway).
Happy New Year,
Your NordSIP team
Image: (c) NosorogUA-shutterstock