August Insight – The Stockholm Declaration
The Swedish Development Agency, Sida, gathered a number of different Swedish investors and owners in 2016 under the concept Swedish Investors for Sustainable Development (SISD) with the specific aim to engage the investment community on the Agenda 2030.
Using that platform, Sida hosted an investor conference in Stockholm in May, as a stakeholder outreach to support and contribute input to the initiative of the UN Global Compact and GRI to launch a reporting framework for the Sustainable Development goals (SDGs).
The event was also supported by the PRI. Together with Folksam, Alecta had the opportunity to co-host of the event. Seeing the engagement and commitment of the participants – including discussions on how to practically go about integrating the SDGs in investment processes –it was considered beneficial to show the investment community as one standing behind the development of a standardised reporting framework and indicators related to the SDGs. It is an important signal to companies in Alecta’s portfolio but also to stakeholders, hence the Stockholm Declaration. During the conference, several examples of how participants work, or have worked, with the SDGs were brought up which was useful as we carry on in this endeavour.
The Stockholm Declaration, whose signatories now have a total of over $1 trillion, is a firm commitment to integrating the 17 Sustainable Development Goals (SDGs) set out by the UN into their central framework.
Eurosif interviews Carina Silberg, Head of Sustainability at Alecta, Sweden’s biggest occupational pension provider, on just how the SDGS will shape the future of investing and what role the Stockholm Declaration will have to play. As Head of Sustainability, Silberg oversees and helps to coordinate sustainable policies and aid implementation in the pension fund’s three key business areas: asset management, product development and customer service.
Eurosif: What do you think will be the impact of SDG investing for Alecta?
CS: First and foremost, the SDGs serve as important lenses to identify companies and business models that are positioned to meet future needs. It is our belief that companies can be an important driver for development and those players which find a way to meet the Goals are potential sustainable long-term investments. The attention and awareness of the SDGs and their themes has also spurred an interest in finding new investment opportunities that specifically combine stable returns with social and/or environmental impact, and we are currently exploring some interesting alleys. As a pension fund, we are aware that the long-term interest of our beneficiaries are aligned with a sound and sustainable global development, and in terms of returns, we are convinced these also match a long-term perspective. As reporting frameworks and indicators mature, it will be important to make comparisons between impact of potential portfolio companies and to benchmark progress. With this background we have engaged in the Multi-Stakeholder Advisory Committee to the UN Global Compact and GRI initiative to develop a reporting framework.
Eurosif: How important is to have strong backing from partners to making this initiative a success?
CS: It was positive to have so many of the participants from the Stockholm event become signatories to the Declaration, and hopefully there will be more investors and asset managers joining in order to show their support. This means that there is an investment community signalling that the SDGs are and will be important to our investment decisions, even though we most likely will have different ways of integrating them into our investment processes. However, there is a simultaneous request for both standardised and business-related indicators when it comes to the SDGs. The more investors support the Declaration, the more relevant the framework becomes for investees to report on.
Eurosif: How will the partnership work to achieve its goals?
CS: Reiterating Alecta’s CEO, Magnus Billing, it is exciting to think about where we will stand a year from now in our respective investment processes. Some investors had already made important progress in May towards integrating SDGs in the investment processes, while others are now getting better acquainted with them. As expressed in the Declaration, we are supporting the process of the Global Compact and GRI to develop the reporting framework, and intend to follow the development closely.
Eurosif: The call from European institutions for Sustainable Finance is very strong at the moment. Alecta's CEO, Magnus Billing, represents Sweden's financial industry at the HLEG. How much has the setup of the Stockholm Declaration been influenced by that?
CS: The Stockholm Declaration is most definitely a joint initiative, not only an Alecta initiative. We see it as building on a strong tradition of Nordic and European institutional investors being at the forefront of sustainable and responsible investment. For the past years, we have however also seen a rapid progress of ESG investments outside Europe, which is positive and reinforces the momentum we are experiencing around us.
Eurosif: How important do you consider Sweden's collaboration with Europe to make the SDGs come to life concretely?
CS: I think the key word here is collaboration. Not just within Europe, but with all relevant stakeholders. However, seeing the number of initiatives from the EU to spur sustainable development and sustainable investment specifically - including the HLEG on Sustainable Finance - the EU has an important role when it comes to raising the bar across Europe. The SDGs may be the important bridge to further advance social investments whereas environmental impact has a stronger record and history of measurement and impact reporting.