Stockholm (NordSIP) – Who would have thought such an enlightening event as TBLI Nordic could leave such a hangover! This week NordSIP brings you its first reports from the conference, including a piece on TBLI chairman Robert Rubinstein’s vision, as evidenced at the conference last week, the 33rd of its kind across four continents (NordSIP). Among its achievements, perhaps the critical spirit engendered by Rubinstein himself stands as the highest testament driving the implementation of sustainable finance forward through the enlightenment of future generations.
But perhaps nobody embodied that critical spirit better than Re-Define Director Sony Kapoor, who in an inspiring keynote proceeded to critically dismantle the ossified structures of the financial sector and the out-dated thinking of long-term institutional investors and others (NordSIP). Drawing on his own wealth of extensive experience with Norway’s Sovereign Wealth Fund, among others, Kapoor warned of the somnolence in a financial industry maximising risks while minimising returns by declining to invest in emerging markets and ignoring demographic trends and changing value systems that could have disastrous consequences. “It makes no financial sense,” indeed!
Elsewhere, NordSIP sat down with Sweden-based Infranode infrastructure investment manager and founding partner Philip Ajina as he approaches the final close on his first fund. With infrastructure a long-term investment requiring more than the usual financial analysis and more in terms of risk assessment of what is not immediately apparent, it makes all the sense in the world for the fund to integrate ESG into the heart of its investment process. Logic goes a long way!
In a different part of town to the Stockholm Nasdaq, Swedish loan agency and asset manager Enter Fonder opted to make all of its funds ‘ethical’, the entirety of its funds now classified as such by the Fondbolagensförening, the Swedish Investment Fund Association (NordSIP). In concrete terms this means divestment from activities such as weapons, alcohol or the exploitation of fossil resources. “In practice, this has not made such a big difference to our portfolios. We have been discarding unethical holdings over many years,” said Enter’s director for marketing Richard Bentefour.
Similarly, down in the Danish “south”, Sampension, the third largest pension company in Denmark, is expanding its policies and practice of responsible investment on the basis of climate change, human rights and CSR, also henceforth broadening its role as an active investor (NordSIP). “Climate change is the subject we most often infuse into our critical dialogues with the companies we are invested in. Every fifth dialogue we have had has centred on climate change since 2009,” said CIO Henrik Olejasz Larsen.
Not far away, Danish energy giant DONG is changing its name to Ørsted after the Danish scientist Hans Christian Ørsted, a pioneer in the electromagnetic field, following the sale of its oil and gas business (NordSIP). It was felt that DONG, which stands for Danish Oil and Natural Gas, was no longer appropriate. “DONG is no longer who we are,” said Chairman of the Board Thomas Thune Andersen.
And looking forward, NordSIP will be hosting a round table discussion with experts to explore solutions to integrate ESG in institutional portfolios. One of the experts will be Mamadou-Abou Sarr, global head of ESG investing at Northern Trust Asset Management, who just launched two new best-in-class ESG Index Funds, to track the MSCI ESG Leaders Indices.
Heard on E-Street
The Washington Post’s Tim McDonnell suggests that the real solution to climate change lies in the U.S. tax code (guess why..) (WaPo). Republicans are pushing for changes to the tax code that would further reverse Obama-era climate measures and make it easier for oil companies to recover their investments in exploration and to shield profits from overseas drilling, in addition to lowering the corporate tax rate to 20%. Thankfully, as with just about everything else Trump proposes, the measure is likely to fail when it comes to a vote in Congress at the end of the year.
Quote of the Week
“One can understand if a hedge fund with a 1-2yr investment horizon invests in a way that is not sustainable. But one cannot understand if a fund like one of the AP’s or the Norwegian SWF invests in a way that does not have sustainability at its core” – Sony Kapoor, on why institutional investors are automatically held to a higher standard, despite often failing to meet it.
Question of the Week
Which USD95.9bn active investment management firm recently announced all five of its investment branches were now signatories to the UN PRI?
Famous Last Words
“What could be a better measure of permanent capital loss than climate change?” – Ex-AP4 CEO Mats Andersson at the Stockholm Nasdaq, September 28.
Wishing you an enlightening weekend,
Your NordSIP team
Image: (c) NosorogUA – shutterstock