Climate Change: Rearranging Deck Chairs?

    Why Planting Trees may be Better Than Decarbonising Indices

    Stockholm (NordSIP) – On 18 September, NordSIP had the privilege to attend Nordea’s Sustainable Finance Conference in Stockholm. One keynote speaker who stood out for his bold views and direct message was Mika Anttonen, Chairman, founder and principal shareholder of St1, the Finnish energy company who owns one of the leading petrol station chains in the Nordics, as well as a refinery in Sweden and other energy production facilities, including wind farms in Finland.

    Once an oil trader working for Finnish oil company Neste Oyj, Anttonen is now number 1215 on Forbes’ list of 2018 billionaires, with a net worth of US$1.9 billion. He uses the profits of its company to invest in combatting climate change, by investing in wind, geothermal and waste-based ethanol fuel. At Nordea’s conference, Anttonen made an impression with his frank assessment of the world’s energy needs and of the likely failure of governments to attain the goals set during the Paris Agreements.

    “Forget it! It’s not happening, and there is no reason to be optimistic,” he said, referring to the 2° scenario targeted at the COP21 in Paris, in December 2015. So far, governments have been unable to reduce emissions sufficiently, and even if the shift had been more radical, the amounts of carbon in the atmosphere are already causing climate to change and will continue to do so. Concretely, Anttonen talks about a “carbon debt” of 100 billion tons, which corresponds to the surplus of carbon dioxide in the atmosphere already emitted, and an additional 4 billion tons released every year at the current rate. Of course, slowing down further emissions is essential to solving the deterioration of the Earth’s climate. However, the only possibility to reduce the amount already in the air is to re-capture carbon, and the only effective way of doing so is to generate biomass.

    Growing trees in the desert is one revolutionary idea Anttonen is currently supporting. According to him, the technology such a project requires already exists. Solar panel-powered desalination plants can not only provide the necessary irrigation to grow trees, but they can give the local population the water they need. The process of “greening” deserts would also offer other advantages to those populations who are likely to suffer the most from the impending consequence of climate change.


    For Anttonen, planting trees is much more important than improving battery technology or researching new fuels for cars. Most of the fossil fuel is not used to run cars, but in many other applications that we are currently not willing to sacrifice, and are likely to see increase as the world population grows, and larger parts of it aim to access middle-class comfort.

    That said, the sequestration of carbon dioxide is only one part of the equation Anttonen proposes. The use of coal, for instance, has to be prevented more drastically. In parallel, he believes the education of women and girls in disadvantaged populations is also essential to solving the climate equation, and religion plays a vital role in that endeavour. Then, of course, everyone has to be willing to make sacrifices where they really matter.

    Then comes the question of financing: how much does carbon capture cost? And who will be bearing it? Currently, St1 imports used frying oils from China to blend it into Diesel which it sells in Sweden. The cost of such a procedure per ton of carbon saved is superior to that of planting trees in the desert. Anttonen believes that is it the regulators’ duty to support the transition to a balanced global carbon cycle, and impose taxes on oil and energy companies to finance carbon sequestration projects.

    Anttonen also urges investors to consider the sustainability of their current investments. If the progress investments support is only applicable locally, in advance societies like the Swedish one, then their effect on the climate will be minimal. We cannot acquire a sense of achievement and satisfaction from doing something in isolation when it cannot be replicated on a global scale. He, therefore, urges investors to broaden their investment universe geographically to places where the impact of projects on the climate can be much broader, such as in Africa.

    Putting into perspective what Anttonen proposes, and given the urgency of finding solutions to the impending damages caused by climate change, we may question for an instant if most of the investment strategies we look at aren’t just futile efforts in the midst of a storm. Something like rearranging deck chairs on the Titanic perhaps?


    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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