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Funds with clear societal benefits

The Church of Sweden’s financial policy clearly states that investments shall be made in companies that contribute to society. In addition to this, we also stimulate development in the financial sector.

One of the Church of Sweden’s overall goals is making beneficial contributions to society. The Church of Sweden’s financial policy clearly states that investments shall be made in companies that contribute to society. For this reason, we also stimulate the development of the financial sector by being actively involved in the creation of new funds that have a clear focus on, e.g. climate change issues and the reduction of poverty. The funds we invest in with the clearest societal benefits at present are as follows:

Althelia Climate Fund

The purpose of Althelia Climate Fund is to protect valuable forests in developing countries by providing the inhabitants of villages with an income from sustainable agriculture and the sale of emission allowances that a forest generates, which is greater than the income derived from cutting the forest down - often for the purpose of growing crops.

Global deforestation accounts for almost a fifth of overall environmental impact because trees absorb immense amounts of carbon dioxide. Many large, old trees are cut down and processed to make charcoal which is then burned thus releasing all of the carbon dioxide bound in the charcoal into the atmosphere.

This fund attempts to draw attention to the several other ways that forests are valuable aside from their timber and fiber value, e.g. being the home of plants and animals, benefits to the climate and the regulation of soil and air moisture and temperature. The fund has received an award from the UN as being one of 16 initiatives with benefits to the climate. It is a true “game changer”.

The Church of Sweden is one of the original investors of this fund which was introduced in 2013 in conjunction with another European Investment bank and the Dutch development bank FMO.

Read more about the Althelia Climate Fund 

SEB microfinance fund

For many years, micro-financing has been a part of the Church of Sweden’s international work, primarily through Oikocredit, one of the world’s leading micro-financing actors. The Church of Sweden participated in establishing Oikocredit over 40 years ago.

We also participated as investors in the start-up phase for Sweden’s first microfinance fund for institutional investors, SEB Microfinance Fund, which was launched in 2013 by SEB. Additionally, we invested in their third, follow-up fund in 2015. The fund invests in institutes that lend smaller amounts of money, often as little as a few thousand Swedish kronor, to micro-companies that may consist of perhaps just one person who need to invest, for example, in a new sewing machine.

AN ILLUMINATING ENTERPRISE IN A MICROFINANCE FUND

One of our holdings in the micro-financing fund is M-KOPA Solar, a company that currently makes electricity available to over 300,000 households in Kenya, Tanzania and Uganda through the sale of solar cells that supply energy sufficient to charge five mobile telephones, a radio and three LED lamps daily.

For an equivalent amount, about $ 0.50, which is what it costs a household without access to electricity to buy their daily supply of kerosene for lighting, they can instead buy a package on an instalment plan including solar cells, a battery and several lamps.

 

After a year, when all payments have been made, the family becomes the owner of the equipment. Instalment payments are made via the very same mobile telephones that the solar cells charge. The company can monitor the equipment remotely and step-in if it doesn't operate properly or if the customer is not making payments.

 

When the initial purchase has been fully paid, customers can extend the agreement and also purchase a larger battery that will supply a digital TV – a move that is very popular. The company is growing at a rate of 500 new customers per day and has over 750 full-time employees and 1,200 representatives in the field.

 SAPPHIRE (SFRE – SUSTAINABILITY, FINANCE,  REAL ECONOMIES)

Sapphire Sapphire is a fund we invested in together with a handful of other international investors when it was launched in 2015. Its purpose is to strengthen the real economy and furnish small banks that are striving to become more sustainable with assets to be used in the long-term, so that small and middle-sized companies can borrow money, grow, and build stabile, local economies. These companies focus on the environment, health, education and other important societal issues.

In many ways, Sapphire is an outgrowth and development of micro-financing in which both the lender and borrower have grown in size and developed new needs. This fund has been developed based upon the initiative of a global network of sustainable banks. Read more about The Global Alliance for Banking on Values.

GREEN FOR GROWTH FUND

In 2016, we invested in a fixed-income security fund with immense benefits to the climate, the Green for Growth Fund. The fund lends money to companies, agricultural actors, households and municipalities in south-east Europe who want to save energy or convert from fossil fuel to renewable energy sources.

The lending is done via local banks who also receive training in how to promote the efficient use of energy among lenders. This fund is unique in that it provides a substantial and measurable benefit to society at a low financial risk.

Since its inception in 2009, the average amount of carbon-dioxide emissions in the projects thus far financed have been cut in half. Large and important actors such as the European Investment Bank and the World Bank Group’s International Finance Corporation stand behind the fund. 

Green bonds

In 2015 we invested in a newly launched fund with green bonds. The fund invests in bonds that finance projects such as renewable energy, energy efficiency and infrastructure for water (supply) and sewage. 

The interest in green bonds has grown at an enormous rate the world over in recent years. It offers a straight forward way to earn “green” returns on fixed-income investments. The fund that we have chosen is managed by SPP/Storebrand and invests in green and sustainable bonds around the world, including Sweden, that lead to sizeable improvements, primarily in the areas of climate and water. The fund adheres to Green Bond Principles.

Climate links:  

CDP

Climate policy initiative

New climate economy

Carbon Tracker