Climate, the Cloud and Geothermal Energy
As Sweden watched its national football team win the first spot in its group of the world cup, Swedish development financier Swedfund invested SEK 128 million in the Climate Investor One fund, a fund that develops, builds and employs renewable energy projects in developing countries. Climate Investor One invests in renewable energy from solar, wind and hydropower and aims to reduce C02 emissions by 1.8 million tonnes annually. A.P. Møller Holding, the investment branch of A.P. Møller Mærsk, is preparing to invest DKK1-2 billion in geothermal energy and a large-scale 100-150 megawatt geothermal plant, which is roughly equivalent to the supply of electricity to 150,000 households from the Esbjerg offshore wind farm, amounting to about two per cent of Danish electricity. Hopes are that Danish geothermal energy exports can rival the country’s offshore wind success.
Coop Opsparing, the latest mutual fund to be launched in Denmark, was listed on the Copenhagen Stock Exchange and offers ‘simplified, accessible and responsible’ investment solutions through its investment in ETF funds selected on the basis of their ESG ratings, sustainability assessments and social responsibility. EMPEA, the global industry association for private capital in emerging markets, published a report suggesting the increasing potential for private equity to make a meaningful impact in underserved markets due to the convergence between private equity investment strategies and the SDGs.
From the other side of the pond, Clearbridge comments on the potential benefits of cloud computing to reduce the environmental impact of all the data we generate. Meanwhile, at a conference focused on green bonds in London, NordSIP examined a report by the 2° Investing Initiative which poses serious questions about the idea of the green bonds’ additionality. More on that next week (NordSIP).
Heard on E-Street
IKEA made a commitment to use only renewable and recycled materials by 2030 according to its new “Three Roads Forward” long-term strategy of adapting to a new future marked by resource scarcity and urbanization. The ‘Three Roads’ are centred on accessibility, the environment and affordability (Business Insider Nordic). The Nordic Investment Bank hired Luca De Lorenzo, a sustainability expert, to run its sustainability and mandate unit. De Lorenzo will lead an eight-person team comprising five environmental experts and three economists (Global Capital). Sweden state pension fund AP7 added coal and phosphate companies, among them Bharat Heavy Electricals and NTCP, to its investment blacklist alongside Nutrien, a merger between Agrium and Potash, which were already on the blacklist. AP7’s list of excluded companies now totals 65 (IPE). Barrons published a list of the 20 most influential people in ESG investing.
Global Capital’s Lewis McLellan looks at the pros and cons of pricing green bonds more tightly than conventional bonds. On one hand, tighter pricing could set incentives that lead to more ethical spending; on the other, it could deter investors: SRI Bonds: Haggling Over Price Comes Into the Open (Global Capital).
Question of the Week
Which was the most recent Nordic country to launch a Sustainable Investment Forum (SIF)?
Famous Last Words
“It’s nice to be sustainable as long as it doesn’t hurt. When it hurts, no one is sustainable. That’s a joke” – Sasja Beslik, head of sustainable finance at Nordea, last week upon deciding to divest holdings from Facebook following what he characterised as an ‘unresponsive’ approach to how the Cambridge Analytica scandal is being handled. “A company of this size with this type of risk related to their business should have been far more responsive and pro-active in the way they respond to investor requirements,” Beslik said. “Not a single serious sustainable fund in the world” should have a holding in Facebook, he added, citing the lack of feedback and Nordea’s own investigation (Bloomberg).
The wheels of Justice grind slowly. Happy weekend and enjoy Almedalen!
Your NordSIP team
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