Stockholm (NordSIP) – Norsif, the Norwegian Sustainable Investment Forum, has just elected a new board chairman. After leading the organisation in an exemplary manner for many years, at the forum’s annual meeting on 20 April, Janicke Scheele, Institutional Advisory at DNB Asset Management, handed over the baton to Lars Erik Mangset, Head of Sustainable Finance at Grieg Investor. NordSIP reached out to the new chairman to hear his thoughts on the future of Norsif and sustainability in general.
Change is in the air
“A key task for me will be to ensure continuity, building upon the great work done by my predecessor,” says Mangset. He is certainly the right person to do it, having already served on the board of Norsif for the past four years. “We have recently partnered with Finance Society Norway, where we share administrative functions. I look forward to exploring our synergies on events, courses, and other initiatives that promote the sustainable finance agenda.”
Continuity apart, the new chairman is highly aware of the need for change prompted by an ever-evolving sustainable investment landscape. “Few organisations focused on sustainability and finance ten years ago when Norsif was founded,” he recalls. “Things have changed since, with prominent associations and initiatives in Norway and abroad entering the playing field. We welcome this development, of course, but it also forces us to challenge ourselves and ensure we stay relevant to our members and true to Norsif’s main objectives. We must become better at tapping into the experience and knowledge of our members, identifying their needs and helping them promote sustainable investment practices in their own organisations,” he adds.
Ambitions backed by experience
“The overall purpose of Norsif aligns perfectly with my value-driven ambitions as a sustainability professional, which is to contribute to systemic changes that make the financial sector a stronger driving force for sustainable development,” the newly elected chairman asserts. Such value alignment is a suitable prerequisite for leading an evolving organisation, especially reinforced by his extensive sustainability experience and expertise.
An economist by trade, Mangset started his career working with climate and environmental research, risk analysis and management at Det Norske Veritas (DNV). Later, he temporarily left the private sector to dig deeper into marine environmental issues and Arctic conservation at WWF. Eventually, he ended up building the non-profit’s link to sustainable finance, which provided a gateway to the world of investing. Mangset has since worked at KLP, focusing on climate risk and net zero both at the asset management and at the asset owner part of the company. He joined advisory firm Grieg Investor as Head of Sustainable Finance a year ago.
Guiding, not pushing
Norsif’s main objective is clear: to promote and advance responsible and sustainable investing practices. In this, the Norwegian organisation differs slightly from some of its sister SIFs. “We have drawn a line, stating that we do not provide any input in policy processes, but rather focus on bringing forward know-how on how our members should address the regulation,” explains Mangset.
A recent example is the guidance on SFDR implementation published by Norsif last year. “It would be an understatement to say that this issue has been a headache for several of our members,” comments Mangset. The forum has also just collaborated with academics to issue a guide on the integration of ESG in valuation models. It has since become part of the curriculum of Norway’s leading business school.
“Besides publications like this, our focus is typically on organising events, like breakfast meetings, seminars, and an informal after-work gathering called ‘Norsif talks’,” says Mangset. “Most recently, Norsif hosted seminars in collaboration with partners in China and India and on social issues under the ESG umbrella. In a few weeks, we will have an event about nature risk together with key market players and the head of the government-appointed expert group on the same issue,” he adds.
Transparency, standardisation, and collaboration
Mangset sees three key challenges the industry must tackle to reap its potential as a ‘force of good’. Increased transparency is the first one. “It would enable critical learning between market players, but also allow external stakeholders to chip in their view on the sustainability performance of investors, creating a race-to-the-top among them,” he explains.
Second is standardisation, which is sorely needed in sustainability. “Take net-zero targets, for instance. There are almost as many ways to define a net-zero target as investors setting such targets. We end up with different views on a company’s performance and diverging expectations during the engagement processes,” he says. Standardisation is also a prerequisite to address the third challenge, accelerating collective action to influence companies and markets.
“We, financial actors, should address these three issues urgently. Of course, even if we succeed, it ultimately rests upon politicians and regulators to enable the true catalytic effect that the financial sector can play in driving the sustainability agenda through predictable and favouring policy frameworks that sufficiently incentive sustainable investing and not only more disclosure requirements,” adds Mangset.
A vision for the future
Tackling the issues above would help address some of the widespread criticism that sustainable investment and ESG, in particular, are attracting these days. “Our industry is being challenged in terms of its marketing practices, its motives (whether ESG is about saving the planet or the bottom line), and the methods we employ (e.g., divest or engage),” admits Mangset.
Shaping up with regards to ‘claims management’ is key, according to him. “All sustainability claims should be justified and done so transparently with relevant information easily available to stakeholders,” insists Magnet. “Rather than simply stating that your fund is Paris-aligned, a more sincere practice would be to apply a stringent science-based approach, improve it constantly over time, and explain to investors and stakeholders the merits and limitations of the approach.”
Yet responsibility runs both ways. “External stakeholders cannot simply resort to demanding easy solutions such as divesting from ‘everything bad’ or expect all financial institutions overnight to become fully sustainable,” he says. “An ideal scenario would be to get comprehensive, reliable, and honest transparency from investors, combined with enhanced stakeholder understanding on what can realistically be achieved.”
“Rome was not built in a day,” reminds Mangset. “Hopefully, improved transparency and standardisation will, over time, significantly reduce greenwashing, either through regulatory interventions or by the industry itself.”