Stockholm (NordSIP) – On the backdrop of last week’s climate summit in Madrid, SPP announced it would make all of its funds, worth SEK230 billion, fossil-free. SPP’s decision brings Storebrand’s share of fossil-free assets under management to €26 billion, equivalent to a third of total AUM. Storebrand purchased SPP from Handelsbanken in 2007.
“As an investor, we must contribute in the way we can. Right now we are in a completely unsustainable equation, where the gap between the global plans to finance fossil fuels and the climate plans agreed by the world’s leaders in Paris in 2015 is only increasing,” Åsa Wallenberg, CEO of SPP Fonder, commented on this occasion. “We must realise that not all companies will be part of the future. We must therefore back companies that can change their operations and have the opportunity to be part of a profitable, sustainable economy, allocate capital to them and challenge industries that are not compatible with the global climate ambitions.”
SPP’s CEO notes that there are also political and regulatory reasons not to invest in companies with fossil fuels. “Carbon dioxide emissions are likely to be taxed more and more in the future, a risk the finance industry generally may not be fully priced. The European Investment Bank’s recent decision to stop funding fossil fuels also indicates that the step we are now taking is right, she concludes.”
“The growth in our fossil-free funds is a result of strong customer demand and an increased allocation to fossil-free solutions in our captive life insurance portfolios. Fossil free funds were initially niche, but has grown to become an important building block in the sustainable investment strategy for many clients,” says Odd Arild Grefstad, CEO of Storebrand Group.
Institutional investors represent the largest group of investors in fossil-free funds, Swedish demand by far the most dominant, but according to Grefstad, there’s increased interest all over Europe. “There is a rising global demand for action on climate change. Countries, municipalities and cities are increasingly asking for different investment solutions to align their capital with their overall climate commitments, says Grefstad.”
Image courtesy of SPP