Killing Sustainability Myths
This week NordSIP sat down with Pelle Pedersen, Head of Responsible Investment at PKA, one of Denmark’s largest occupational pension managers. Pedersen, who took an interesting journey from trading while completing his law studies through to studying Danish entrepreneurship in Africa only to end up being inspired by RI and hired by PKA to overhaul its sustainability profile, recounts the challenges in changing the prevailing view of returns and sustainability as opposing poles in management culture. Someone who doubtless agrees is Swedbank Robur CEO Liza Jonson, who in a podcast interview reiterating comments made to NordSIP emphatically states it’s time to “kill the myth” of the opposition between returns and sustainable investments, arguing that those who want to reduce their carbon footprint should look to the stock exchange, which accounts for half the climate impact private individuals can have.
Continuing with Swedish themes, Svenska Kyrkans (the Swedish Church’s) asset management arm experienced a bumper 2017, with a profit of SEK762 million corresponding to 10.3% for the year thanks to a diversified portfolio and management that pronouncedly integrates sustainability into its financial analysis. SunPine, a producer of environmentally compatible products based on sustainable forestry, is investing SEK250 million (€25 million) into a new facility to increase “tall diesel oil”, a renewable form of diesel as a byproduct of the pulp and paper industry. Not to be outdone, Iceland’s Arctic Green Energy Corporation signed a deal in cooperation with the Asian Development Bank (ADB) to provide clean geothermal heating solutions to Xiong’an, a city of 15 million just south of Beijing in the PRC, representing the largest deal ever for the small Nordic country, a global leader in geothermal technology (NordSIP).
Heard on E-Street
BMO Global Asset Management named Alice Evans and Claudia Wearmouth as its new co-heads of governance and sustainable investment (GSI). They will be responsible for integrating ESG criteria and for growing BMO GAM’s Responsible Funds range (Citywire Selector). Environmental Finance’s Green Bond Awards winners for 2017 were revealed, aiming to recognise best practice and issues that were significant in the development of the market. Danish energy giant Ørsted took the award for Best Corporate Green Bond of the Year (Environmental Finance). David Murray and Thomas Murtha, respectively CEO and senior adviser at Preventable Surprises, suggest in an IPE op-Ed that asset owners can play an outsized role in reducing greenhouse gas emissions by triggering the required re-allocation of carbon to decarbonise, and that scenario analysis can have unacceptable costs in delaying action (Investments & Pensions Europe).
Question of the Week
Which Swedish pension last year fund invested $50 million in the Rise Fund, a private equity fund managed by TPG Growth?
Famous Last Words
“From Chevron’s perspective, there is no debate about the science of climate change” – Theodore Boutros Jr., a lawyer for Chevron, ingeniously suggesting that fossil fuel companies such as Chevron, BP, Shell, ConocoPhilips and ExxonMobil know they are the problem as they are sued by the cities of San Francisco and Oakland to pay for seawalls and pumps needed to protect them from rising tides in the first ever U.S. climate science lawsuit. He also went to suggest that “oil doesn’t cause climate change, the people burning it do” (Grist).
That head of hairs to split is getting exceedingly thin. Happy weekend,
Your NordSIP team
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