The Long & Short of 2022

    With most of the world still unaware of the geopolitical drama that would soon unfold, January started on a backdrop of controversy, with the European Commission sneaking in a consultation on the inclusion of natural gas and nuclear energy in the last hours of 2021. It took a month for investors, politicians and climate specialists expressed their discontent and outrage at the proposal. Skagen’s new year conference now offered online grabbed our attention with prominent speakers including Ian Golding and Joseph Stiglitz.

    Despite the backlash, the European Commission approved the controversial draft on February 2. On the same day, the IIGCC published a set of guidelines to help private equity on the path to net-zero. In tune with times, in his annual letter to CEOs, BlackRock’s Larry Fink exclaimed: “Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke’.” And on February 24, the invasion of Ukraine changed the conversation. Here is what experts expected would happen in the realm of sustainable investing.

    At NordSIP we welcomed Richard Tyszkiewicz to the team. In March, the Council of the European Union reached an agreement on the Carbon Border Adjustment Mechanism (CBAM) regulation, one of the key elements of the European Union’s ‘Fit for 55’ package. In April, the depressing IPCC AR6 report came out. As UN Secretary General António Guterres warned: “We are on the fast track to climate disaster due to a litany of broken climate promises.” And then the biodiversity COP15 was postponed yet again. At the end of the month, EFRAG announced the release of the first draft of its widely anticipated European Sustainability Reporting Standards.

    In May, greenwashing made headlines. Then-HSBC AM‘s Global Head of Responsible Investing Stuart Kirk said: “Who cares if Miami is six metres underwater in 100 years? Amsterdam has been six metres underwater for ages, and that’s a really nice place.” On the last day of the same month, law enforcement officials raided the offices of Deutsche Bank and DWS in Frankfurt following an enquiry set off by whistleblower Desirée Fixler.

    In June, Stockholm’s traffic was temporarily disturbed by important dignitaries coming to talk at the perhaps overly-hyped Stockholm 50+, the aftermath of which we found somewhat underwhelming. July was quiet, as usual in the Nordics, except for some tragic events at the traditional political-rally week in Almedalen, and action raged on in the US, where Roe v. Wade was ultimately killed by the conservative Supreme Court. On the EU front, meanwhile, there was another attempt to stop nuclear energy and natural gas from entering the green taxonomy.

    In August, it was MIFID II‘s turn to go green while the US passed the historic Inflation Reduction Act, which finally tips the balance in favour of climate change mitigation. As the summer drew to a close, it was time to pause and reflect on ESG’s recent bad rap. In September, we attended the Nordic CFA’s Investment Conference and the New York TimesClimate Forward event. H&M became the DWS of consumer products as it faced a greenwashing lawsuit. At the end of the month, ESMA provided guidance on the MIFID II amendment.

    In October, we attended the GIIN Forum in the Hague and back in Stockholm, we reported on the Skytop summit. Meanwhile, Royal Bank of Canada entered the greenwashing contest and Greta Thunberg published a book. The conference circuit culminated in November starting with the climate COP27 in Egypt, followed by the PRI in person (and online) in Spain and soon thereafter, at the beginning of December, finally, the biodiversity COP15 took place in Montréal. Mid month, the EU carbon border tax prepared to launch. And just in time before the holidays, the EU decided to increase the price of CO2.

    We are also very happy to have welcomed another two members who joined our team in 2022: Olivia Mahr and Gülce Demirer. Julia’s column, the Snap will soon turn two and Richard’s Laundromat column started in September.

    Happy 2023! It may already be happening, but there is still plenty to be done.

    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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