Green by default – sustainable finance is the obvious choice

by Hanna Ståhlberg

Almedalen week marks one of the busiest political events in Sweden. Every year beginning of July, politicians from all parties, NGOs, think tanks and other groups meet in Gotland, Sweden’s largest island in the Baltic, to discuss issues ranging from economy, society, health, finance, and the environment. Almedalen also marks the beginning of summer vacation for most Swedes. During the multiple sessions and seminars sustainable finance was high on the agenda, as it is inextricably linked with Sweden’s future economy and national environmental profile.


Despite the large demand for sustainable finance, the sector is still facing major constraints. There is a shortage of green investment options, not because they are not available per se, but rather they are hard to identify. Secondly many investors as well as consumers don’t know what green really means. 

Handelsbanken, 2050 Consulting and the Swedish Society for Nature Conservation hosted a session on the first day at Almedalen to raise exactly these issues. How should policies be formulated to motivate financial institutions to make more sustainable investment choices? How can corporates be more transparent? How can we stimulate more innovation in the sector overall?

Aaron Maltais, Responsible for the Research Program at Stockholm Sustainable Finance Centre, participated in the discussion to join the pledge for making sustainable finance the obvious choice. There was clear consensus that more needs to happen in Sweden to reach the goals set in the Paris Agreement and to support the implementation of the global Sustainable Development Goals (SDGs).

As Per Bolund, Minister for Financial Markets puts it, “Sweden is a pioneer and leader in the area, but we still require more political pressure to speed up the transition. We need to combine sustainability thinking with the desired returns on investment.” Swedish national pension funds should declare sustainability parameters in their management, this in turn may spread further into the private sector. “We need to do much more, for example implement climate stress tests and ask for brown capital requirements."

Aaron Maltais, SSFC

Aaron Maltais, SSFC

From left to right Patric Lindqvist, Portfolio Manager Sustainable Energy, HandelsbankenBritta Burreau, CEO, KPA, Per Boland Financial Market and Consumer Affairs, Government, and Aaron Maltais, SSFC

From left to right: Patric Lindqvist, Portfolio Manager Sustainable Energy, Handelsbanken; Britta Burreau, CEO, KPA; Per Bolund, Financial Market and Consumer Affairs, Government; and Aaron Maltais, SSFC.


One example of how Scandinavia has tackled the issue of defining green investments is by introducing ecolabelling. Different labels and certifications have evolved in fund management, to help consumers make more informed choices. One example is the Nordic Swan label for investment funds. Funds that meet a certain set of criteria can apply for it. The aim of the Swan label is to use the power of capital and ownership to steer companies towards a more sustainable direction. There are 25 investment criteria that involve exclusion of unsustainable companies, inclusion of more sustainable companies, and ensuring transparency.

It does not necessarily give an explanation about the actual environmental impact generated through these investments. But it is a guideline, a starting point. Initiatives like this one and others will hopefully go further in future and provide additional clarity on environmental and social impact as well as consumer benefits.

In 2017, The Swedish Investment Fund Association (SIFA) reviewed the Swan initiative, proposing measures on how ecolabelling for funds can be improved. It’s review included aforementioned suggestions such as increased transparency and linking to impact.
Ragnar Unge, CEO of Swan highlighted at Almedalen that Swan is a young enterprise. Launched only a year ago, the initiative already included ten major players with 20 funds and approximately 50 billion SEK in its portfolio. 

Currently, the EU Commission is in the process of writing a comprehensive study on sustainability ratings and research as well as defining and implementing an EU sustainability taxonomy for sustainable investment products. Following the adoption by the co-legislators of the regulation on the EU sustainability taxonomy, the Commission plans to introduce EU Ecolabels for financial products and explore possible measures to incorporate climate and environmental risks into prudential requirements. This will be in line with the proposed EU taxonomy. The Nordic example and best practices may well serve as a testbed for EU ecolabelling.
- How do we make the financial sector greener?  
Watch the video with Aaron Maltais, Research Program at SSFC and Research Fellow at Stockholm Environment Institute


There is plenty left to do, according to Lauri Rosendahl, CEO at Nasdaq Nordic. Although the Nordics have set several green finance milestones, many of them in green bonds. Examples include the first green city bond (City of Gothenburg), the first corporate green bond and the first green bond from a real estate company (Vasakronan), as well as the first labelled Green MTN corporate bond programme (Fabege) – see ClimateBonds 2018. Lauri Rosendahl estimated 3-5 years before the market choices will be green by default. 

Aaron Maltais at SSFC is optimistic. "Transformation is needed, and will happen, but there is a lot left to do; 80% of investors are dissatisfied with the comparability of sustainability reports and if you can’t compare your investments effectively how can you shift your capital to sustainability” he said. “There are still large gaps where the capital comes from and where it is supposed to go. We need three times as much compared to today’s level of investments to achieve the UN’s Sustainable Development Goals, with two thirds of this investment needed in developing countries.”

During the final round of discussions Nina Ekelund, the moderator, asked the most pressing question: "What does the financial industry need to make the green transition happen?". The answer seemed less straightforward. As Lauri Rosendahl put it, everything requires a price for greenhouse gas emissions produced. All sectors should be included, such as transport, energy, agriculture, and others. Only a fifth of all countries globally are even doing so. “Here the transition needs to be faster”, she added. 

According to Aaron Maltais, much of it comes down to active ownership. Education of advisors and policy makers seems to be key. “The industry is waking up to becoming accountable for sustainability. Stockholm Sustainable Finance Centre is in a perfect position to support activities that will help make the transition to a more sustainable financial market”.



  • Aaron Maltais, Research Program at Stockholm Sustainable Finance Centre and Research Fellow, Stockholm Environment Institute 
  • Per Bolund, Financial Market and Consumer Affairs, Government 
  • Lauri Rosendahl, CEO, Nasdaq Nordic 
  • Karin Lexén, Secretary General, Nature Conservation Association 
  • Ragnar Unge, CEO, Swan 
  • Patric Lindqvist, Portfolio Manager Sustainable Energy, Handelsbanken 
  • Britta Burreau, CEO, KPA 
  • Nina Ekelund, Secretary General, Hagainitiativet (Moderator)