Sustainability focus of AP7, Alecta, SPP, AP4 participation at G20

Jonathan Boyd
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Four key asset managers from Sweden – buffer funds AP7 and AP4, pension provider Alecta and fund provider SPP Funds – will be putting forward a message of sustainable investing to the G20 meeting taking place in Argentina.

In a joint letter they have outlined what they see as crucial developments in which the global financial services industry must involve itself as part of finding solutions to the ongoing climate change challenge.

Key points from the letter are outlined below (translated from Swedish):

Financial players have a significant responsibility in achieving a sustainable world by 2030. Increasing amounts of capital are responding to Agenda 2030 and the 17 global Sustainable Development Goals. But a recurring question is how we can go from millions and billions to trillions and trillions of capital actively working in line with the Goals. One of the global Goals is the 17th – “Partnerships for the Goals” – to cooperate to achieve results. This is something that we in the financial sector in Sweden have come a long way on but it is not enough. The climate question is global and must be solved internationally. Therefore we have been invited to take part in and share our experiences and knowledge at the G20 meeting in Buenos Aires, to push international cooperation in the presence of G20 leaders and finance ministers.

The UN General Assembly adopted in 2015 the resolution Agenda 2030 for sustainable development. The Agenda means that all 193 member nations of the UN have committed to work to achieve a socially, environmentally and economically sustainable world by year 2030.

The world’s countries not least have to increase their ambitions significantly to achieve the goals set by the Paris Agreement to keep global warming under 2 degrees, with the ambition of 1.5 degrees. Hope is not lost that we will achieve the goal as stated earlier this autumn by the UN’s climate panel the IPCC, but it will require strong measures to achieve the change.

The development of the 17 SDGs has been very important in offering a clear path forward for all to follow. Sweden has set an ambition to lead in the execution of that agenda. And Sweden is well on the way.

The financial sector has a key role in sustainable development, where financial players influence development through direct ownership, company management, voting at company meetings and by demanding reporting and transparency.

Financial institutions in Sweden are working intensively to take into account the Goals in asset management. The lessons we have learned in Sweden in terms of beneficiaries and savers not having to give up return because of sustainability work are lessons that ever more financial players globally are experiencing.

No sector will solve the sustainability challenges by itself, but we need to actively seek out cooperation between investors, companies, authorities and interested organisations to overcome special interests and conflicts. Also important is politicians’ ability to create broad international agreements and regulatory regimes, such as, for example, relevant pricing of carbon dioxide emissions to steer producers, consumers and investors towards more sustainable development.

The understanding that cooperation gives results is something we in the Swedish financial industry have come a long way with through the partnership with Swedish Investors for Sustainable Development (SISD)*, where 18 Swedish investors, banks, pension companies and investment companies together with the Swedish International Development Cooperation Agency (Sida) are working together to encourage work on the global SDGs.

Our Swedish experience of the advantages of working together to find solutions coupled to the SDGs is a global role model. The work has resulted in bigger and better results than could have been achieved individually.

SISD is a “loose” network, where members make their own decisions around which of the 17 Goals they want to focus and work on. This has become a successful format with stronger links to achieve results. It has resulted in specific actions coupled to goals 5,6,8,11 and 16 from different members of SISD. The opportunity for an equivalent cooperation globally is great.

Europe is currently leading when it comes to pushing through actions to achieve the Paris Agreement’s efforts to keep global warming under 2 degrees. The EU has already achieved a reduction of 22% in carbon dioxide emissions compared to 1990. To encourage an increased range of green and sustainable investment opportunities and facilitate and streamline decisions about sustainable investments the EU is set to legislate for increased transparency in investment processes as well as push development for accounting for climate risks and scenario analyses, that is, a more sustainable and forward looking financial market. But the goal is to achieve global agreement.

Important lessons to succeed in achieving global cooperation in the financial sector regarding the sustainability objectives include the requirement that this must be anchored at a high level in organisations. Applying consideration of sustainability in asset management should not be a barrier to competition, but taking into account sustainability should be compatible with running a profitable business. Without these criteria the financial sector will not accept the change.

Increasing numbers of financial players globally must see the opportunity in financing the shift to a sustainable economy with low carbon dioxide emissions. With the experiences we have achieved in Sweden we can show that the financial sector globally has a big opportunity to take its responsibility for achieving a sustainable world by 2030. Through partnerships we can achieve change and by leading the way we hope that more will follow the Nordic and European path. For the global challenges require international cooperation.

Magnus Billing, CEO, Alecta
Åsa Wallenberg, CEO, SPP Funds, head of Funds, Storebrand Asset Management
Richard Gröttheim, CEO, AP7
Niklas Ekvall, CEO, AP4

 

Further details of the G20 agenda are available here: https://www.g20.org/en

*SISD partners include the following:

AP2
AP3
AP4
AP7
Alecta
AMF
Folksam
Skandia
SPP
Industrivärlden
Investor
Carl Bennet AB
Svenska kyrkan
Handelsbanken Fonder
SEB Life and Investments
East Capital
Swedbank Robur
Swedfund

 

Jonathan Boyd
Author spotlight

Jonathan Boyd

Editorial Director of Open Door Media Publishing Ltd, and Editor of InvestmentEurope.