And the Winner Is…

    It’s this time of the year again. There is excitement in the air as the name of one Nobel Prize laureate after the other is solemnly revealed to a world agog with curiosity. In a week so pregnant with announcements, you would be forgiven if you missed another, rather less conspicuous award ceremony. On October 6th, NGO Friends of the Earth Sweden (Jordens Vänner) revealed the winner of the Swedish Greenwash Prize for 2021. Unlike the Nobel’s, however, this is an anti-prize, about as desirable as a positive result from your Covid-19 PCR test.

    This year, it is the Swedish National Pension Funds (APs) collectively who get to share the ignominy, again[1]. “Too many have seen through the APs’ sustainability promises, where profit repeatedly takes precedence over both climate considerations and human rights,” reads the motivation (translated from Swedish) that, according to the jury, makes them worthy of the Swedish Greenwash Prize 2021.

    ‘What is going on here?’ you might ask, especially if you happen to read the news from abroad, where the Swedish funds are often hailed as paragons of responsible investing, or even feared as institutionalised green activists. From the power position of managing the combined compulsory savings of all working Swedes, they engage with the world’s biggest companies and nudge whole industries on the path to sustainability. Together with their mighty peers in Norway, Singapore, Japan, and California, they are a force to be reckoned with and they do not shy away from using their voice.

    Well, it is a question of definitions, or methodology perhaps. Given the choice between engaging or disengaging, working for change from within or stomping out in protest, the APs have consistently subscribed to the first option, claiming that it is the most efficient in the long run. Unfortunately, it also appears to be the more challenging one to communicate. Which of these statements is catchier, would you say: “We are fossil-free” or “We push energy companies to transition from fossil fuels to renewable solutions while preserving the valuable economic and human resources accumulated in them”?

    And so, people, or at least enough vocal populists, yell “Divest!”. Meanwhile, the logical arguments against disengaging, delivered by seasoned professionals, seem a tad too complicated to get through the ether somehow.

    Is it so difficult to understand though? Tuning in to a webinar on greenwashing, organised by the Global Returns Project earlier this week, I marvel at the simple and eloquent way Tariq Fancy sums it all up, almost as an aside. He, if anyone, should be considered an unbiased part in the debate, being the original posterchild of anti-greenwashing. “I used to work in distressed finance, so trust me when I tell you that divesting doesn’t work,” he says. If a business is legal and profitable, he explains, there will always be those eager to gobble it up as soon as institutional investors with moral qualms exit the investment. “It’s just the nature of the game,” concludes Fancy.

    It must be frustrating for the hard-working professionals at the AP funds, I imagine, finding themselves yet again at the dishonourable pedestal, normally reserved for greenwashing villains. Luckily, most of them are used by now to being misunderstood and underappreciated. Well, fame and infamy often go hand-in-hand and it is impossible to avoid criticism once you’ve caught the eye of the public.

    Just keep calm and carry on.


    [1] The AP funds won the same award in 2013, with a similar motivation.

    Image courtesy of AxxLC from Pixabay
    Julia Axelsson, CAIA
    Julia Axelsson, CAIA
    Julia has accumulated experience in asset management for more than 20 years in Stockholm and Beijing, in portfolio management, asset allocation, fund selection and risk management. In December 2020, she completed a program in Sustainability Studies at the University of Linköping. Julia speaks Mandarin, Bulgarian, Hindi, Russian, Swedish, Urdu and English. She holds a Master in Indology from Sofia University and has completed studies in Economics at both Stockholm University and Stockholm School of Economics.

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