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The Convenient Choice: Investing in Solutions for a Better Future

May 23, 2016 • GLOBAL ECONOMY, FINANCE & BANKING, Capitalism in the 21st Century, Europe, Responsible Finance, Special Report: The Future is Green, Unprotected Post

Sasja Beslik is Head of Responsible Investments at Nordea Assets Management, one of the leading asset managers in Europe when it comes to developing the concept of Responsible Investments. In this interview with The World Financial Review, Beslik expounds on how incorporating environmental, social and governance (ESG) parameters provides sustainable and long-term good returns for investors.

Nordea shares Nordic values such as freedom and equality, the company cares for the environment and follows the Nordic heritage of breaking new ground. What new ideas has Nordea contributed to the financial services industry?
Nordea has contributed many things but if we’re sticking to the area of asset management then one of the first things I did when I took up the position as head of Responsible Investments was to abolish all so-called ethical funds and raise the fundamental ESG-level of all funds. At Nordea we believe that branding certain funds as ethical may in fact be an obstacle toward sustainability as non-ethically-branded funds can then sort of fly under the radar. We believe all funds should have an ESG approach.

“By being a strong advocate for environmental, social and governance parameters we gain credibility for our products and make them more attractive to customers.”

Nordea is one of the leading banks in Europe when it comes to developing the concept of Responsible Investments (RI). It incorporates the environmental, social and governance (ESG) parameters in its investment decision-making. How has developing this concept given the company an edge against its competitors?
We see a growing interest in sustainable investments from customers. By being a strong advocate for environmental, social and governance parameters we gain credibility for our products and make them more attractive to customers.

 

As Head of Responsible Investments at Nordea Asset Management, how do you and your team find partners and investors whose principles towards ESG issues align with that of Nordea’s?
An important part of our work is to meet with companies and organisations. We rely on personal contact as well as on studying analyses. We also participate actively in seminars and at conferences which is a great way to meet new people who share our values. As active owners we participate in hundreds of AGM’s each year which gives us the possibility not only to influence decisions but also to meet other investors.

 

Environmental, social and governance issues are an increasing source of risk and opportunity. Good returns for customers are the primary focus for Nordea Asset Management. How does Nordea balance upholding ESG-driven investment models and ensuring good returns for your customers?
We don’t see a contradiction between ESG and good returns. In fact we regard ESG as a prerequisite for sustainable and long-term good return. Incorporating ESG in the investment process ensures that risks and opportunities that would be overlooked in a traditional analysis are taken into consideration.

 

“With our money, regardless of whether we are big institutional investors or private individuals who invest toward retirement, we have the power to make a difference.”

You stated in the mini-documentary, Convenient Choices, that “We believe that we as investors have a choice; a convenient choice to invest in solutions for a better future.” Can you elaborate a little bit on this?
The financial industry is a true global citizen. Its primary loyalty isn’t to nations or governments but to yielding return. As we believe that long-term sustainable return requires sustainable investments in sustainable products, we also believe that the financial industry has the power to change our future. With our money, regardless of whether we are big institutional investors or private individuals who invest toward retirement, we have the power to make a difference.

 

Based on the comments of one of the interviewed companies in the documentary, “There are real solutions towards sustainability and real opportunities in sustainable production.” How does Nordea come up with real solutions for real opportunities for its customers?

By incorporating ESG into the analysis. This makes it possible to identify risks and opportunities that would be overlooked in a traditional analysis. A method that includes ESG can identify companies with a long-term sustainable business. These are also the kind of companies that we believe will yield strong results in the long term, which is what our customers expect. Including ESG into the parameters also gives us an edge in terms of discovering good investments versus asset managers that don’t include ESG in their analyses.

 

Nordea fully supports The Paris Pledge for Action. The pledge states that taking strong action to reduce emissions can not only reduce the risks of climate change but also deliver better growth and sustainable development. How much has improved in Nordea’s short/long-term returns to its investors since the company has taken this pledge?
As return ultimately depends on many parameters it’s difficult to separate what part of growth depends on which factor. We firmly believe, however, that not taking ESG risks and opportunities into consideration would mean not acting in our customers’ best interest.

 

Currently, Nordea has approximately 10.5 million customers (data from Nordea.com accessed 16 March 2016). Does awareness in responsible investment services help in achieving a higher number of customers?
We see a very high interest in responsible investments which manifests itself, among other ways, in questions to us through social media. It’s also very encouraging that when we speak to our Private Banking customers about responsible investments there is a high level of interest in this group as well.

 

How will Nordea expand its impact in the industry of socially responsible financial services in the following years? Are there any ongoing programs/plans that are being implemented towards this?
We are constantly working on improving our ESG processes.

Sasja Beslik is Head of Responsible Investments at Nordea Assets Management. He is one of Sweden’s foremost experts on Corporate Social Responsibility (CSR). He has extensive experience of bridging from risk to opportunity within ESG, creating commercial strategies for integration of ESG issues into asset management, fund companies and products. He was named the most influential business individual in Sweden under 40 in 2007, Young Global Leader by World Economic Forum in 2011, and was awarded Serafimer-order-stripe medal by H.R.H King Carl Gustaf of Sweden for extraordinary efforts in the field of finance and sustainability in 2013.

 

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