Sustainable investment takes center stage

Just before Easter, Finansforeningen hosted the conference ‘Sustainability in Finance: ESG Products and integration’ at Danske Bank’s Kuppelsalen to discuss the future of responsible investing. 

ESG, that covers criteria pertaining to environmental, social and governance issues, is a hot topic in the finance industry. Kicking off the conference was John Poulsen, head of Danske Bank House View that publishes quarterly reports on  investment opportunities and risks on the financial markets.

He described how the sustainability focus among customers, civil society, businesses and authorities is causing a tidal wave washing over the investment world. This development spans from personal to institutional customers and demands that sustainability aspects are integrated into investments.

See video from the conference

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The 'why' comes before the 'how'

Speaking at the conference was also Colin Melvin from Arkadiko Partners. He told the asset managers in attendance about the general trend that underlines the importance of a new type of value-based dialogue regarding investment – a trend that impacts both the customers, investors and the companies that these invest in.

He described the movement towards societal impact as stemming from from the paradigm shift away from transactional banking towards relationships and purpose. This shift, he said, requires investors to investigate how they will incorporate ESG into their investment decisions

We are not in a transactional world but in a relational world that requires transparent communication and trusting relationships, where positive societal impact through investment is increasingly expected. The purpose of investment was always to make money. But there is no social utility and that sort of purpose. Investors must ask themselves, what is the ultimate goal - the why? Making money, sure, but through which means and to what ultimate end? The purpose of investment was always to make money. But there is no social utility and that sort of purpose. Investors must ask themselves, what is the ultimate goal - the why?

Colin Melvin

Founder, Arkadiko Partners

Embedding sustainability into the core of the business
Figuring out the why and road mapping how to achieve the desired outcome rests on the shoulders of customers, investors and companies alike, and it paves the way for a new way of investing.

Ulrika Hasselgren, Global Head of Sustainability & Impact Investment at Danske Bank, talked about this as she unfolded Danske Bank’s new strategy for sustainable investment and the important of having ESG embedded into the investment processes.

In 2018 Danske Bank, developed and introduced a new strategy for Sustainable Investment. We want to bring ESG inside our investment processes, our products and our advisory. This is easily said but hard work to do. It is a great challenge but we are committed. The appetite in the market for impact and measuring impact is growing. We believe in active ownership where we as an investorcan influence change and improvement, just as our customers and their expectations similarly impact us. It is a healthy dynamic of expectations that moves us all forward.

Ulrika Hasselgren

Global Head of Sustainability & Impact Investment, Danske Bank

More on ESG

ESG stands for Environmental, Social and Governance and represents a set of standards or factors against which a company can be assessed in order to understand the sustainability of a company’s business model and operations, and how the company’s management is able to manage its ESG risks and opportunities facing them.

Environmental criteria may e.g. consider how a company performs in relation to its environmental footprint. Social criteria may e.g. examine how a company manages relationships with employees, suppliers, customers and the communities in which it operates. Governance deals mainly with a company’s leadership, executive pay, audits, internal controls and shareholder rights.

Read more about Danske Bank’s approach to sustainable investments