Don’t Just Exclude Fossil Fuel

    Stockholm (NordSIP) – Ann-Sofie Odenberg graduated from Stockholm School of Economics with an M.Sc in Business and Economics in 2005. Her master thesis focused on CSR and whether large Swedish companies walked the talk. After graduating from SSE, she joined East Capital as an analyst on their private equity team. Odenberg moved from Moscow to London in 2007 when she joined Kinetic Partners as a regulatory consultant focusing on governance-related projects in the finance industry, particularly for hedge funds. Since joining Brummer & Partners in 2008, she has held various positions, for example as Executive Advisor and Head of Investor Communication and Sustainability. She is now Head of Responsible Investment and driver and owner of the firm-wide responsible investment initiative.

    Appealing to common sense

    “Sustainable investing is about defining a process whereby you can invest responsibly in a way that is relevant to your investment strategy and the financial instruments you trade. It’s about integrating ESG-information into your analysis and investment decisions to evaluate all risk/reward opportunities and make more informed investment decisions. It’s also about “sund förnuft” (literally “sound judgment” in Swedish), evaluating all risk factors associated with an investment is part of the role description of a portfolio manager no matter how those risks are labeled.”

    Where to start

    “If I were completely new to the subject I would start by reviewing PRI’s website and their definitions of responsible investment. After that, I would evaluate how I could invest responsibly given the investment strategy I manage. I would also talk to my clients to find out how I can invest in compliance with their values. Finally, I would define a responsible investment policy/strategy and get buy-in from senior management and other important internal stakeholders.”

    Exiting fossil fuel is not a panacea

    “I’m a quite frustrated when investors require funds to exclude fossil fuel from their portfolios. Yes, we need to consider the climate and the UN SDGs, but I find the exclusion requirement a little populist. I think the climate impact of the holdings in the portfolio is more important than applying 100% exclusion criteria. Some companies that are considered bad from a climate perspective are putting a large amount of money into R&D, to help transit to renewable energy. If they don’t have access to capital, they won’t be able to do as much research. Also, a complete exclusion may have severe consequences for societies depending upon fossil fuel (consequences which may be in breach of the SDGs), and before we have any suitable alternatives, we need to put more money into research and development. Investing in start-ups developing new green energy/technology won’t do the trick, I think we need to work both ways.”


    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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