Data Transparency and ESG-Screened ETFs
NordSIP sat down with Lars Erik Mangset, Senior Advisor for Responsible Investment at Norway’s KLP Asset Management, to share thoughts about sustainable investing in Europe and his proscriptions for investors. Flipping the question of how companies influence the climate, he suggests how new data, methods and tools are needed to assess transition risks and calls for increased transparency on climate risk assessments. The Swedish state pension AP funds stand accused of having exposure to a company suspected of breaching the Non-Proliferation Treaty, and to companies contributing to the manufacturing of nuclear weapons in general. But what are the considerations behind exclusions? Danish startups are heeding the call for sustainable investment products by developing digital investment solutions on the basis of ESG-screened Exchange-Traded Funds (ETFs). Two of these, Metoa and Penstable, are targeting ETFs that have withstood ESG screening by MSCI to develop new solutions.
Meanwhile, the UN Environment Programme (UNEP) found that investments in solar energy globally peaked in 2017, surpassing the installation of fossil fuel and nuclear power technology, with China driving the boom. The relatively small investment figure, however, suggests there is still a long way to go (NordSIP). Craig Bonthron from Kames Capital shares his thoughts on long-serving managements – experienced or entrenched? he asks (Kames).
Heard on E-Street
The “$2.5 trillion private sector will dramatically boost the sustainable economy,” according to Head of Credit Suisse Impact Advisory and Finance Department Marisa Drew. Drew sat down with impact4all’s Nick Rice to discuss Credit Suisse activities that lead to sustainable finance and impact investing on behalf of the bank’s clients (impact4all). During the first Indo-Nordic summit in Stockholm, Prime Minister Narendra Modi invited Norway’s State Pension Fund Global to invest in new sectors in India, including energy, green transport and environmental technologies. The Pension Fund invested $11.7 billion in India in 2017, up $2.5 billion from the previous year (Deccan Herald). Scotland-based asset managers Cameron Hume look at ESG factors in Sovereign Bonds in a new paper, considering them to the extent that they influence investment decisions and affect the issuer’s ability and willingness to service their debts. ESG factors can influence the market pricing of bonds and national prospects for sustainable growth, the paper finds (Cameron Hume).
Question of the Week
What is the connection between socioeconomic inequality and climate change?
Famous Last Words
“It may turn out that you don’t want to invest in tobacco, firearms and alcohol, and so you don’t do that But to assume that everyone has that same value is inherently problematic. Some people like drinking alcohol, some people like smoking, some people like guns, so to tell investors they shouldn’t be doing it because it’s wrong, you’re straightaway not aligning with their values. But that’s the way a vast majority of sustainable investing products have been positioned.” – Simon Smiles, CIO for Ultra-High New Worth at UBS Wealth Management, on the apparently lacking opportunities for the ultra-rich to earn through good causes (CNBC).
Contradictions, contradictions. Happy weekend,
Your NordSIP team
P.S. Don’t forget to check out our weekly Green Bond Review.
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