“Placing sustainability in a positive business perspective can help create business opportunities”

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.
SSFC: Is there a key element to “smart” capital management in the face of climate change?

The sheer scale and long-term nature of achieving global net zero emissions by 2050 also means that greater cooperation between public and private actors will be needed. This raises important questions about how to generate and then structure public-private investments in sustainable projects and how the risk should be shared fairly between public and private investors.

It is of the outmost importance that we continue to work out and agree on common measurements regarding sustainability issues for the financial industry as well as cross-business sectors and borders. Collaboration is key.

SSFC: What do you wish to come out of the Östersund conference on “Economic risks in a changing climate”?

An increased awareness and knowledge about all the different perspectives of sustainability challenges and opportunities that we all face. I would also like for the conference to deepen our understanding in how these challenges and opportunities can, will or risk affecting, all of our businesses as well as the society and the environment in which we operate.

My personal belief is that it is of outmost importance to speed up the pace and work together if we want to secure a positive and sustainable development moving forward. There is no plan B, and so we need to act now – all of us.
Liza Jonson
CEO Swedbank Robur