Blue Bonds and Higher Expectations
Following the drought in the Nordics this summer – which has everything to do with climate change – we return to a rather wet autumn. The World Bank’s International Bank for Reconstruction and Development (IBRD) issued a SEK1 billion Sustainable Development Bond, the first in a series of bond issues to raise awareness of the critical role of water and ocean resources on development. SEB was chosen as the sole lead manager for the transaction, with strong support for the bond from Swedish state pensions fund AP1, and asset managers Storebrand and Swedbank Robur.
Norway’s $1 trillion Sovereign Wealth Fund released two “expectation documents” asking the 9,000+ companies it invests in to integrate ocean sustainability into their strategies and disclose how it forms part of their policies and commitments, and to work towards the UN SDGs, stressing that there would be consequences, such as divestment, for companies in its portfolio that fail to do so. At a more immediate level, Sweden-based water-treatment company Bluewater announced a strategic investment in TAPP Water, which specialises in the sustainable filtration of tap water and has undertaken the elimination of 10 billion disposable water bottles with its business set for a turnover of SEK1 billion by 2023.
Thomson Reuters published its 2018 Diversity & Inclusion Index, which ranks the global top 100 most diverse and inclusive organisations and relies on ESG data from over 7,000 companies. Surprisingly, given their global reputation for gender and other equality, not a single Nordic company made the top 20, with only Saab AB scraping in at #95. Do the Nordics have a diversity problem?
The government of Denmark proposed an allocation of DKK250 million annually over the next four years to climate challenges in its financial budget proposal for 2019. Of this, DKK50 million will be allocated to 2030 objectives while the remaining DKK 200 million will be dedicated to clean air and reducing greenhouse gas emissions to meet Paris agreement quotas.
Heard on E-Street
Nasdaq’s Nordic Sustainable Green Bond Market listed its 100th sustainable bond, on the heels of 40% more green bond listings in the first half of 2018 than in the full previous year, but also in the face of a critical report from Moody’s that green bond issuance internationally is waning (Expert Investor Europe). Journalist Sonia Rach suggests that the lack of universal standards for measuring positive impact, which has caused impact investing to struggle, means that the UN Principles for Responsible Investment needs to take a tougher stance on companies that do not adhere to its guidelines (Portfolio Adviser). Alf Hornborg of Lund University argues that it will be necessary to confront conventional ideologies of technological progress and free trade and develop a science of engineering that takes into account global inequalities in order to address the environmental degradation and constraints these impose on the biosphere (Science Nordic).
Famous Last Words
“It’s important to distinguish between Donald J. Trump on one hand and the United States of America on the other… Analysts in the U.S. now confidently predict the U.S. will exceed the commitments it made in Paris, in spite of Trump.” – Former U.S. Vice President and Generation Investment Management founder Al Gore brings some sunshine and quietly confident predictions about the global climate struggle to a Berlin event over the summer (Politico).
Encouraging. Happy weekend,
Your NordSIP team
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