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Sustainable Finance: Sweden up front, EU close behind

by Hanna Ståhlberg

As one of the last ferries leaves the island of Gotland this Friday, the people of Visby are still busy cleaning up their streets, packing away meeting tents and folding tables and chairs. Almedalen week, Sweden’s most important political event, has come to an end.

Sustainable finance was one of the hot topics discussed in several seminars during the course of Almedalen week. The financial sector must be part of making life on this planet sustainable. It already plays a role in channelling investments into green technologies, energy-efficient buildings, and climate-friendly transport.

Now governments and financial institutions must pick up the pace and ensure investments are delivering across the entire agenda set out by the Sustainable Development Goals. Sustainable finance is also essential to reach the climate goals set in the Paris Agreement as well the EU’s sustainable agenda.

Stockholm Sustainable Finance Centre was part of Almedalen’s discussion on sustainable finance in Sweden. During the session hosted by the EU Commission ‘Sustainable finance – for a greener and cleaner economy’, many developments in the sector emerged. As Magnus Astberg from the Commission explained, concrete measures were under way with an overall aim to bring more coherence in the sector, increase reporting transparency, and deliver common terminologies. In May 2018, the Commission adopted a package of measures implementing several key actions announced in its action plan on sustainable finance.

Magnus Billing, CEO of Alecta and a member of the High-Level Expert Group on Sustainable Finance, established by the European Commission in 2016, said “as pension companies in Europe, we have a commitment that lasts 30-40 years into the future. It is important that payments are high but also durable. As such we have a fiduciary duty.” He added that integrating scenario analysis into existing risk processes would allow for testing the resilience of the portfolio. “We need a comprehensive taxonomy, as well as harmonization across Europe. Something like an EU quality label. This can be the basis for legislative proposals and future work.”
ALMEDALEN 2018 
- Key Trends in sustainable finance
Watch the video with Marcus Svedberg, Senior Advisor for SSFC

INFORMATION IS KEY

Marcus Svedberg is confident that Stockholm Sustainable Finance Centre could play a role in this setting by for example running trainings on taxonomy and standards. “The market needs to look closer at the obstacles and the solutions to overcome current barriers. For example, green bonds work very well, why are we not having more of them?” he asked.

Over 20% of all events at Almedalen were related to sustainability. According to Eva Axelsson, Head of Sustainability at Swedbank Robur and moderator of a session on sustainable savings, seven out of ten people would like to save sustainably, and four out of ten actually do it.

But Sweden seems to be well ahead in the game. Lena Ek, Chairman of Södra, Sweden’s largest forest-owner association, agrees. “Beyond Sweden a lot of money is still being invested unsustainably. Saving in sustainable investments is still very new and Sweden has so far offered good returns in sustainable savings,” said Marcus Svedberg, Senior Advisor for SSFC. “We need more support from policy makers and politicians to gain pace in the shift towards more sustainable finance.” One option discussed publicly in the past has been taxation on more unsustainable fund products, to incentivise investing in more sustainable options.

Part of the problem is the complex information customers face when choosing between investment options. A recent survey among high school students showed 80% of them think sustainability is important. Almost 40% of kids learn about private economics already at school. Schools would be a good place to start informing future investors, Tove Zander, CEO at Young Share Savings, explained during the session. “Complete integration of the whole sustainability profile of a company through clear, simple and transparent communication is still key,” added Liza Jonson, CEO Swedbank Robur. “Even better, if corporates could show their contributions to the sustainable goals.”

Magnus Billing and Cecilia Repinski

Magnus Billing, Magnus Astberg and Cecilia Repinski

Marcus Svedberg, Per Nordkvist, Sasja Beslik, Annika Poutiainen and Magnus Billing

Marcus Svedberg, Per Nordkvist, Sasja Beslik, Annika Poutiainen and Magnus Billing

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PANELISTS

  • Marcus Billing Maltais, CEO of Alecta and a member of the High-Level Expert Group on Sustainable Finance
  • Marcus Svedberg, Senior Advisor for SSFC

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