NordSIP Insights – Transitions & Stewardship Handbook

    As the clock ticks relentlessly towards the carbon neutrality deadlines of the Paris Agreement, where before investors argued about the validity of the case against fossil fuels as stranded assets, we now have regional and global energy transition policies.

    With our time running out, the tide has changed. The IPCC has unequivocally endorsed the view that climate change is a man-made phenomenon. The EU’s Green deal and its sustainable finance regulatory packages are setting standards for all of Europe while the Biden Administration’s commitment to transitioning towards a green economy is making its way through Congress. Corporations and financial institutions are not just paying lip-service to climate change. They are adopting specific net-zero emission targets and roadmaps.

    In this handbook, as with all our publications, we seeks to bring the latest market participants’ insights about how sustainable investments work in practice. For this first edition focusing on Transitions & Stewardship, a common thread of collaboration runs through the contributions of a wide range of experienced investors.

    We learn about how engagements and collaborative efforts can be incorporated into passive methodologies to create Paris Aligned indices and ETFs. We dive into the solar power investment opportunities in Southern Europe and the reforms and market mechanisms facilitating them. We explore how real-asset investors must decarbonise to future-proof portfolios and protect themselves against the incoming value backlash against non-net zero properties. We talk to asset owners and hear of their collaborative efforts to nudge asset managers and investee companies towards increasingly ambitious transition goals.

    The transition to a more sustainable economy is crucial to successfully meeting the environmental challenges in our path. Investors can choose from a plethora of roads that lead to the net-zero carbon emissions future we have set as our collective goal. The destination is the same and is more expediently arrived at hand-in-hand. 

    In this issue, the cases span across investment styles and asset classes. We find out how stewardship makes a difference to a quantitative manager and we look at the constructions of a carbon efficient ETF. We dive into investment cases with Schneider Electric and SolarEdge, as well as the intricacies of three different sector themes: electrification in public equities, renewable energy infrastructure and fintech in the context of microfinance. We also learn how the US is catching up on sustainable investing. The University of Helsinki tells us how they invest in local entrepreneurs, thereby connecting their investment objectives with their own educational and research capabilities. Finally, our collection wouldn’t be complete without the interview of a sustainability-focused fund selector, talking about the hunt for authentic managers.

    In ESG integration, there is no ‘right’ or ‘wrong’. But there is definitely ‘authentic’ and ‘bluff’. Asking questions and seeking proof is what enables the astute sustainable investor to tell the two apart. 

    Tired of flipping the book? Access individual articles or download the pdf here!

    1. the editor’s word: Running against the clock, together
    2. Engagement, Transition & Passive Investments, an interview of Florian Cisana, UBS Asset Management
    3. Active Ownership, the Danish Way, an interview of Louise Aagaard Jensen, PKA
    4. From Real-World Problems to Real-Asset Solutions, by Aviva Investors
    5. Stewardship, Welcome Aboard this one way Train, an event summary
    6. Accelerating the Transition Through Engagement, an interview of Stephanie Pfeifer, CEO of the IIGCC
    7. The Power of Fruitful Collaborations, by Emilie Westholm, Folksam
    8. The 3 Pillars of Stewardship, by Emmet McNamee and Paul Chandler, PRI
    9. Riding the Energy Transition Wave, an interview with Dario Bertagna, Capital Dynamics
    10. Investing in Change, Selecting & Managing Transitioning Companies, an event summary


    Tired of flipping the book? Access individual articles or download the pdf here!