“IT IS IMPORTANT THAT OUR ORGANIZATION FOCUSES ON SUSTAINABILITY FINANCE BECOMING A NATURAL PART OF OUR BUSINESS.”
Why is it important for your company to strengthen the competence within this area?
Camilla Hinas: "Sustainability might seem simple enough at a mere look at it – what’s not to like about a better world? But in reality, this is a highly complex area that we all need to delve into and discuss, not only within our own organization but also within the industry and the wider society, to understand the complexity and each other’s challenges. This is an area that is important not only for us but also for our clients. It is important that our organization focuses on sustainable finance becoming a natural part of our business. Gaining a broader knowledge, and a better understanding of the field, may not provide all the answers but is a good foundation for a continuing discussion on making this issue an ongoing improvement."
From your point of view, how can the finance industry contribute to the transition towards a sustainable economy?
Camilla Hinas: "Financial institutions and asset managers in particular have ample opportunity to contribute to a sustainable economy. Typically, we manage a good amount of assets that if managed with active ownership and engagement can affect the management of the companies to do better. Capital is often required to make a change, which is why it makes all the sense in the world that the financial industry supports companies working to transition and engage with those companies, who might not be at the forefront of sustainable implementation in their operations."
And how can you contribute, on a company level?
Camilla Hinas: "As a global active asset manager, we regularly engage with companies in areas of the world where ESG* is not as high up the agenda as here in the Nordics, or with small- and midcap companies that do not have dedicated teams established to only focus on and disclose on sustainability. In our experience these companies highly value our inputs on ESG and where they potentially can make adjustments to better align with global expectations and ESG trends."
What is particularly challenging when it comes to integrating ESG perspectives into your business decisions?
Matthias Wiegand: "One thing is the inconsistent and broad-based data. Not two ESG research providers are identical, which means that you can receive contradictory research or ESG ratings on the same company. Additionally, companies’ own reporting varies a lot as no global standard for ESG reporting has been agreed upon yet. Various initiatives are working on this, which we are certain will materialize in the years to come. To support a broad standard and to encourage aligned disclosures, we joined the Task Force on Climate-related Financial Disclosures (TCFD) last year in order to back the idea of standardized reporting."
What opportunities do you see regarding ESG integration?
Matthias Wiegand: "Integrating ESG in the investment process raises awareness and offers relevant insights into the key issues, which may arise in the investee companies. Any ESG matters are included in our fundamental financial analysis and thus result in a holistic analysis of the investee companies. The ESG research enables us to spot issues in investee companies, which may not be reflected in financial results and estimates. For opportunities, this could be companies embracing the energy transition or actively working to decrease deforestation. On the adverse side, it can be fraud or litigations, or negative a impact on biodiversity."
What do your clients expect from you when it comes to sustainability considerations in the asset management process?
Ralf Larsson: "The major part of our clients are sophisticated institutional clients, who have very specific requests and requirements to sustainability and how we integrate ESG into our investment process. It is expected that we as a minimum requirement take into consideration how our investee companies impact the market and environment they are operating in. Some clients have stated specifically that financial returns continue to be a top priority, but it does not override the possibility to invest responsibly. Typically, we will also see that sustainable investing goes hand in hand with good financial returns."
What did you get out of participating in the Sustainable Finance program?
Matthias Wiegand: "By participating in the program, I gained an increased understanding of the complexity, the urgency to do something and all the different questions and wonderings we all have in common. Not only to meet peers within the industry from the financial side, but also to meet and engage with people from the sustainability side."
Ralf Larsson: "I got new perspectives and ways of thinking and at the same time it was an eye-opener on the complexity and how urgent it is that we do something. There are no easy answers or solutions, but in the end, it is about commitment and focus on constantly moving forward on the sustainability issues with a clear goal."
* Environmental, Social and Governance
"I GOT NEW PERSPECTIVES AND WAYS OF THINKING AND AT THE SAME TIME IT WAS AN EYE-OPENER ON THE COMPLEXITY AND HOW URGENT IT IS THAT WE DO SOMETHING."
ABOUT THE PROGRAM SUSTAINABLE FINANCE
In the two-day program Sustainable Finance we specifically address you who work with finance-related issues and need to get a stronger grasp of sustainability. For more information, please contact Viktoria Norell, +46 8 586 175 40, viktoria.norell@exedsse.se or fill in the form to download the program brochure.