Helping Norwegian Finance Integrate Sustainability

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Stockholm (NordSIP) – At the start of October, and following twelve years at Storebrand, Matthew Smith started a new position as Director of Sustainable Finance at KPMG, the global consultancy. NordSIP took the opportunity of this move to catch up with Smith and hear his thought on his tenure at Storebrand, what the future holds at KPMG and his insights about the pandemic and the challenges ahead.

Twelve years at Storebrand

By the end of his tenure at the Norwegian asset manager, Smith had risen from Senior Sustainability Analyst, when he was hired in 2008, to Head of Sustainable Investments, at the time of his departure.

- Promotion -

“I started working at Storebrand in 2008 after applying for the position as SRI (Socially Responsible Investment) analyst as it was called back then,” Smith says. “I saw that the position combined analyses on a wide range of ESG issues and included widespread contact with portfolio companies, which is something I was very interested in. I did, however, start in the middle of the Financial Crisis, so at one stage, I thought my career in finance was going to be very short.”

“It is difficult to isolate any single experience, though I think the times when we felt we raised the bar in sustainable investing stand out the most,” he adds. “We were first out with coal exclusions, with a systematic analysis of the palm oil industry and just recently with our deforestation engagement. These instances were very rewarding as we experienced that other investors followed suit and that we together intensified the pressure on problematic companies to change their business models.”

Lending a Hand

“Over the last couple of years, it has become increasingly clear to me and others that the Financial sector in Norway is largely underequipped for the challenges it is facing in terms of regulatory changes and client demand for sustainable solutions. The majority of actors don’t have large sustainability teams like Storebrand and will be dependent on external help. This help is, as of today, very difficult to find,” Smith explains.

 “As Director of Sustainable Finance at KPMG Pure Sustainability, my main responsibility is to build a Sustainable Finance offering, that can help financial actors integrate sustainability strategically into their operations. To help clients both identify and manage ESG risks, but also to help them take advantage of the market opportunities that lie in sustainable investing.”

The Path Ahead

Looking ahead, Smith is focused on helping his clients with the implementation of sustainability regulation and is optimistic about the wake-up call provided by COVID-19. “Implementation of the EU Sustainable Finance Action Plan will be a great challenge to the Financial sector for the next two to three years at least,” Smith says. “Helping clients to both comply with relevant legislation, but also to use the plan and the EU taxonomy as an opportunity to raise the standard of their products and reporting is something we are very much looking forward to. In addition, we are looking to help clients to identify funds and other investments that create maximum positive ESG impact.”

 “The future of sustainable finance looks very promising. The enormous potential that capital has, both in stimulating positive change, and hindering it, has begun to be fully appreciated. This means that the expectation for financial institutions to make a positive contribution to sustainable development goals is likely to increase,” he adds.

“With new sustainable business models becoming competitive with existing ones, sustainable investment is expected to increase risk-adjusted returns going forward. COVID 19 has provided us with an example of how quickly and effectively things can change to meet short-term crises. The challenge facing us all is to redefine the climate and ecological crises facing the world from long-term horizons to immediate concerns, in order to achieve just as effective a response,” Smith concludes.

 

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