How does climate change impact on the financial system? How can businesses be steered towards sustainable investments? These are only some questions Sweden's first nation-wide conference on "Economic risks in a changing climate" seeks to address. Swedbank Robur CEO and SSFC Advisory Board member Liza Jonson will speak about climate-smart capital management at the conference taking place 9 and 10 October in Östersund.
SSFC: What risks arise for capital management from climate change?
Liza Jonson: There are huge risks globally due to climate change, but there are also large opportunities. The risks are clear: Climate change is leading to sea level rise, it increases the frequency and severity of weather extremes such as droughts, floods and storms, which can then lead water and food to become scarce.
But there are investment opportunities in this because we invest with a long time horizon in mind. We need to invest in companies that future-proof their businesses and take all the risks mentioned into consideration. Estimates are that 7,000 billion US Dollars are needed annually in investments into companies that focus on solutions in order to reach the goals set forth in the 2030 Agenda for Sustainable Development.
SSFC: How can capital management be “smart” with regard to climate change?
Money talks - and we should never forget that sustainability is also very much business-driven. By placing sustainability in a positive business perspective, we can help create business opportunities in a smart way and increase the pace of positive change.
The historical and traditional investor approach of “opting out” of investing in certain companies is also gradually changing. Instead we are seeing an approach of actively choosing to “opt in.” That is giving the investors the mandate to use their ownership role to, in an efficient way, help to drive and push the companies in a more sustainable direction.
We at Swedbank Robur say we invest in companies in transition, and we have also launched a family of funds called “Transition” in which we invest in companies that either are in a transition phase or are driving transition in a business sector.