International influence on sustainable investments
For a number of years, the Church of Sweden has worked to promote investments in clean water and sustainable cities through the investment network, Swedish Investors for Sustainable Development (SISD) whose aim is to further investment within the UN 17 Sustainable Development Goals. Find out more about SISD here.
Last year, The UN General Secretary saw the potential of a corresponding international network and today there is the Global Investors for Sustainable Development (GISD) with some of the world’s largest investors participating as members. GISD’s aim is to create sustainable investment products primarily in developing nations. The Church of Sweden is an active participant in the Swedish reference group.
Two-degree target investments
To confirm that the Church of Sweden’s investments in equities and corporate bonds are in line with the Paris Agreement’s aims, an independent scenario analysis was carried out using the Paris Agreement Capital Transition Assessment (PACTA) software tool.
As last year, the analysis of the climate-risk in our portfolio showed that the risks of not reaching the two-degree target are very low. This is primarily due to the fact that almost none of the companies in the seven sectors that are included in the analysis and run the greatest risks of negatively impacting the economics of climate change and the conversion to a low carbon or fossil free society are included in our portfolio. This primarily concerns companies in sectors such as oil, gas, coal as well as power generation, steel, cement and vehicles as well as marine traffic.
Green for Growth Fund
During the year, our three-year investment of €10 million in the fixed income fund, Green for Growth, matured. This fund is supported by the EU as well as others and lends money to banks in 17 countries, e.g. Kosovo, the Ukraine and Egypt. These banks in turn lend the money to companies and households that want to replace the fossil-energy they use with renewable energy sources thus drastically reducing their use of energy.
The fund’s investments amount to about SEK 5 million and on the average have reduced emissions of carbon-dioxide in the projects financed by about 50 per cent.
The fund’s activities also include an educational programme in which more than 4 500, mostly private individuals and small companies, have learned about how they can reduce their impact on the climate. Read more here.
At year’s end our investment in SEB’s micro-finance funds totalled SEK 410 million. The funds lend money to different micro-financing institutes in developing countries. These institutes in turn lend money to people with low or no income and who cannot borrow money from the usual assortment of banks. With these modest amounts of money, people can buy, e.g. a pig or a sewing machine which establishes a base for their own businesses. With the support of these small loans they have the opportunity to increase their income. In this way, many women have received the opportunity to improve their incomes, lift themselves out of poverty and have also had the opportunity to pay for a higher education for their children.
Thule Buyout Co-Investment Fund I
At the conclusion of 2019, an investment in Thule Buyout Co-investment Fund I was made. The fund offers investors the opportunity to invest, in parallel with Skandia, in funds that consist of unlisted companies in the USA and Europe. That is to say, investments are made in shares that are not listed on any stock market, so called private equity. All of the fund’s companies go through a norm-based screeningby Skandia’s ESG Due Diligence team.
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