The Week in Green (September 8th edition)


Stockholm (NordSIP) – It’s good to be back from summer recess! AP fonderna 1-4, the four largest buffer funds for Sweden’s state pension system worth €135bn, received the welcome news this summer that the government is set to relax investment restrictions in order to allow for more self-determining investments, something the funds have long lobbied for following difficulties sustaining returns in the current low-yield environment (NordSIP). The proposed changes are also set to affect the funds’ sustainable investments by bolstering and clarifying the regulations surrounding these.

Elsewhere, Swedish Insurance and Pensions giant SPP/Storebrand signed the Green Bond Principles, a voluntary agreement developed by banks and investors recommending transparency and disclosure and promoting integrity in the development of the Green Bond market (NordSIP). “Green bonds are an excellent financial instrument for earmarking money for climate change projects while providing equivalent returns to traditional bond investments,” said SEK 3bn SPP Grön Obligationsfond’s Managing Director Helena Lindahl. “Many people ask me: why should I invest in green? I’d like to reverse the question: Why not?”

- Promotion -

Distinguished Professor of Law Stephen McCaffrey, arguably the most respected international authority on international water law, was awarded the prestigious Stockholm Water Prize last week in Stockholm as part of World Water Week, the annual focal point of global water issues organised by the Stockholm International Water Institute (SIWI). Professor McCaffrey received the prize from Carl XVI Gustaf, the King of Sweden himself (NordSIP).

And between the explosion in Chinese renewable energy production and sustainable investment and the uncertainty of the future of the U.S. position on climate change, some European funds, such as Vontobel’s Fund New Power B, are looking East to emerging markets such as China’s on the strength of the strong competition from its renewable energy producers (NordSIP).

Heard on E-Street

On that note, and in a reflection of China’s ever-increasing appetite for sustainable investment, the UN PRI this week appointed its first head of China. Nan Luo will work closely with Chinese institutional investors on RI initiatives such as green finance, as well as a number of external bodies such as the Asset Management Association of China and the Green Finance Committee (Investments & Pensions Europe).

The European Commission High-Level Expert Group on Sustainable Finance (HLEG) has begun publishing a series of op-Eds via Responsible Investor to enlighten the public as to its work and to gather input and perspective. The first instalment comes from Eurosif Executive Director Flavia Micilotta, on helping SRI investors to understand the work and objectives of the HLEG (Responsible Investor/NordSIP)

Quote of the Week

“There were a whole bunch of venture capital investments that were made between 2006 and 2009 when cleantech seemed like a huge thing. Since then, many of these investments haven’t turned out that well” – Skype and Atomico Fund Founder Niklas Zennström, on why he thinks cleantech is dead (Nordic Business Insider).

Question of the Week

Which relatively young private equity manager earlier this year announced the closing of its first ESG themed fund at SEK 4.5bn, vastly exceeding its initial target of SEK 3.3bn?

Famous Last Words

Nordea’s Equity Research team published a report this week finding that the Nordic region stands out as a top performer in ESG ratings, alongside the benefits of ESG screening to risk mitigation and as an indicator of strong operational and share price performance. “Companies and investors simply cannot afford not to care,” Nordea’s analysts wrote (NordSIP).

Wishing you a happy weekend,

Your NordSIP team


Image: (c) NosorogUA – shutterstock

Partner message

The coronavirus epidemic has further accelerated the rise of ESG into the investment mainstream. As deficits skyrocket, bond investors have an opportunity to engage with governments on climate change, argues Thomas Dillon, Senior Macro ESG Analyst at Aviva Investors.

Learn more

NordSIP Insights

Most read this week

A Thematic Bottom-Up Approach to Emerging Markets

According to a 2019 UBS survey, “78% of clients are integrating environmental, social and governance (ESG) factors into their investment process.” Survey respondents noted...