Sweden’s historical approach to socially responsible investments in asset management is set to undergo a change, according to industry experts.
Another reason Sweden may lead the charge towards a new SRI paradigm is the space given to SRI specialists such as SPP. Norway's Storebrand bought SPP, and its subsidiary SPP Fonder, from Handelsbanken in 2007 for SEK18bn in cash: worth about €1.9bn at the time.
SPP today is known in the Swedish market for taking pretty much an SRI-only approach to asset management. Meanwhile, Storebrand recently qualified for the Dow Jones Sustainability World Index for the 12th year in a row, putting it among the top 10% of its industry globally in terms of sustainability, the company claims.
The Swedish Investment Fund Association says: "Most of our member companies are active in SRI. Overall, the Association's view is that developments should move towards SRI becoming the norm, and not the exception."
Certainly Swesif - Sweden's sustainable investment forum and the local branch of the European sustainable investment forum, Eurosif - has proven the prevalence of SRI through its recent research. Eurosif is the pan-European network and think-tank focused on developing sustainability through European financial markets. Its members include institutional investors, financial service providers, academic institutes, research associations, trade unions and non- governmental organisations repre- senting more than €1trn in asssets.
Swesif's membership includes many of the biggest domestic and Nordic banks and asset management firms, such as Danske Bank, DnB Nor, Handelsbanken and Nordea Fonder, as well as asset managers and products with specific commit- ments to SRI, such as 7AP and SPP.
Research published by Swesif last October found that SRI investments had increased by 60% in Sweden over two years. It said: "Historically, the AP funds have had a have had a leading position as a model. But even organi- sations such as MISTRA [The Foun- dation for Strategic Environmental Research, which relies on asset man- agement to fund the sums it disburses for research] and the Church of Sweden have put their stamp on the market. Today, all the major Swedish banks are active in SRI."
Swesif adds: "The total capital in sustainable investments is about Sek2.9trn (€328m), an increase of 60% from 2008. This mostly constitutes institutional capital. As with Swesif's research in 2008, this research shows that the chief reason for using various sustainability criteria is to avoid negative publicity.
"A high weighting is also given to demands on management or owners. There were significantly fewer, compared with 2008, who said that sustainability can lead to better returns. That sustainable investments contribute to lower investment risk is, however, given a higher weighting than in 2008."