European Action Plans and Southward Sustainability Drift
NordSIP visited the Sustainable Investment Forum Europe organised by Climate Action in partnership with the UNEP FI in Paris this week. For Nordic investors, the question of whether the leadership of sustainable finance is “moving south” is mitigated by the notion that progress anywhere benefits people everywhere. Other concerns included whether the incremental changes such as exclusion methodologies introduced by Nordic institutional investors such as AP4 actually hamper the sense of urgency necessary to effectuate larger changes. One interesting attendee was Ted Halstead, founder and chairman of the Climate Action Council, who presented a controversial case (that he also makes in his TED talk) for carbon dividends where a gradually rising tax on carbon would be returned to American citizens. Closer to home, Danish pension manager Sampension has become the central investor in Nature Energy, Denmark’s largest producer of biogas, with a DKK 1.1 billion investment. The Danish biogas sector is set to expand beyond Denmark and stands to create 20,000 jobs by 2030. In Stockholm on Tuesday night, the Corporate Human Rights Benchmark (CHRB) received the CFA Sweden ESG Award for 2017.
Following the unveiling of the European Commission of its Action Plan for boosting sustainable finance in the EU last week, reactions from different interest groups ranged from enthusiasm to scepticism (most notably from the European Fund and Asset Management Association). The plan, formulated on the basis of recommendations by the High-Level Expert Group on Sustainable Finance (HLEG), calls for institutional investors and asset managers to take a proactive role in the integration of sustainability criteria into their investments, suggests the creation of EU labels for green financial products, and demands improvements in corporate reporting. The framework will be formalised by the European Parliament in May. Elsewhere, the World Economic Forum’s Future of Urban Development and Services Initiative published a new whitepaper on the circular economy in cities, arguing that the private sector can contribute to accomplishing goals that cities might not be in a position to achieve on their own (NordSIP).
Heard on E-Street
Nordea looked set to win enough backing from shareholders to move its HQ to Helsinki from Stockholm, in order for the bank to join Europe’s banking union, pending a vote Thursday (March 15). The plan is backed by the majority of key investors, including Swedbank Robur, Alecta and Varma Mutual Pension Insurance Co., though the move is opposed by the Swedish Shareholder’s Association (Bloomberg). The European Investment Bank and banking institution ING signed an agreement on a €300 million facility to support green investments in the European shipping market, with each contributing half (EIB press release). The Norwegian Sovereign Wealth Fund is applying pressure on the 9,100 companies in which it holds stakes to submit data on issues like climate effects and water use to the Carbon Disclosure Project (Reuters). Sweden’s AP1 buffer pension fund reported a 9.7% return on investments for 2017, beating out its sister funds AP2, AP3 and AP4 (Investments and Pensions Europe).
Question of the Week
Who issued a €500 million green bond last June?
Famous Last Words
In the absence of a price, we sort of pretend that digging trillions of tons of fossil fuels from deep under the earth and putting it into the atmosphere – we’re pretending that that has no probability of a bad outcome… Anything that puts carbon into the atmosphere should be subject to a carbon price.” – Entrepreneur Elon Musk in conversation with filmmaker Jonathan Nolan last week, suggesting it’s up to people and governments to make carbon pricing happen amid other warnings about the risk of a new ‘Dark Age’, which drives his work on sustainable energy and space travel (Green Tech Media).
Sky’s the Limit. Happy weekend,
Your NordSIP team
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