ESG Not a Competition

    Stockholm (NordSIP) – Christina Hillesöy started working with sustainable investments in 2005 at the Third Swedish National Pension fund (AP3). “Back then it was still early days and companies were not used to have investors engaging in ESG-related questions with them. Many of the external fund managers I engaged with back then were surprised that we demanded that they should integrate  ESG in their analysis and decision-making processes.  I left AP3 in 2014 and started as Head of Responsible Investments at Länsförsäkringar. Since mid-2017, I am Head of Sustainability at the same company. Länsförsäkringar has a broad offering of financial solution for banking, pension, non-life insurance and real-estate brokerage.”

    Avoiding bad investments & invest in sustainable development solutions

    For me, sustainable investment is a combination of avoiding investments in companies that systematically do harm on the environment and people and invest in companies that develop and produce solutions for sustainable development. SDGs is a great compass for companies to link their business ideas and development to. I am also a big fan of engagement. Companies need the pressure and interest from different stakeholders including investors to take responsibility for sustainable development.

    Use all the tools to make an informed decision

    To select the right fund, Hillesöy recommends looking at different aspects and using a holistic approach. “ESG should be an integrated part of the fund managers investment analysis and decision-making process, not a separate analysis. Ask the fund manager to prove how ESG  is integrated by giving concrete examples of how the analysis is done and what ESG sources are used.  Ask the manager to give examples of specific ESG risks and opportunities in a couple of selected companies. Different Fund platforms today provide several tools for selecting sustainable funds. Länsförsäkringar provides Swesifs sustainability profile, Morningstars ESG score and sustainable globes as tools on the fund platform. These three different tools should be used in combination.

    The foundation of the Ethical council – a collaboration of competitors

    I am most proud of forming the Ethical Council of the Swedish AP-funds together with some colleges at AP1, AP2 and AP4.  Back in 2006, it was really difficult to contact a company outside of Sweden and try to engage on ESG issues with them. They were simply not used to engaging with investors on ESG issues. Although  AP-funds are competing funds, we decided that competing on ESG engagement didn’t make sense. Actually working together with engagement proved to be more efficient, gave us more power to promote change in companies and made us an attractive partner for other international investors to collaborative with. The Ethical Council engages in both reactive and proactive ESG  issues with companies.

    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA
    Aline Reichenberg Gustafsson, CFA is Editor-in-Chief for NordSIP and Managing Director for Big Green Tree Media. She has 18 years of experience in the asset management industry in Stockholm, London and Geneva, including as a long/short equity hedge fund portfolio manager, and buy-side analyst, but also as CFO and COO in several asset management firms. Aline holds an MBA from Harvard Business School and a License in Economic Sciences from the University of Geneva.
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