Published 28.01.2021 by Natalie Westermark

“We will deliver robust and sustainable solutions to the entire Nordic region, including in alternative asset classes”

Last year was very unusual, with a global pandemic and the eyes of the world on a US presidential election. What is the main thing you will take from 2020?

It has certainly been an unusual and challenging year in many respects and we are yet to see the full consequences of the pandemic. There have been many tragedies, both personal and for society as a whole, and we have a very important job ahead of us to rebuild communities which have been shut down to a large extent. My hope is that the concerted global efforts we have seen will act as a catalyst for continued impetus in the green transition that the world so badly needs.

We are grateful that our industry is not among those worst affected and we enter 2021 with a degree of humility. At the same time, I am proud of what we achieved during the year, despite everything. Sustainable funds and alternative asset classes have experienced a major boom and we have managed to generate significant value for our customers and shareholders.

One of the most important things that I can take from 2020, and which gives me a great deal of optimism about the future despite all the challenges that lie ahead, is just how adaptable and cooperative we have all been, between industries, communities and countries.

It was not just a strange year for global capital markets, but also for the business and all its employees as we adapted to working from home. As a leader, you still need to be able to lead your staff forward and provide them with support. How have you handled this transition? What do you feel has been the most important element of this work?

I have to say that I am incredibly impressed with my colleagues, who have managed to adapt so quickly and efficiently and have handled the situation so well. We have looked after each other and hopefully our customers will feel that we have taken good care of them too, despite this unusual situation.

We have successfully found new ways to perform many of our tasks and I feel this has created a great sense of commitment and pride in the organisation. Although we all miss social interaction and meeting together in person, we can also see that digital working methods are actually even more effective in many contexts.

As a leader in this type of situation, it is even more important to be sensitive to how employees are feeling and to what they need in order to retain their enthusiasm. It has become apparent just how important our workplace is for building a culture and for creativity, although many people will no doubt be pleased with the opportunity to work from home to a greater extent. It is also interesting to note that many employees feel they now have a closer working relationship with their managers thanks to digital dialogue rather than ordinary meetings.

My main priorities as a leader have been to be visible and accessible, to provide plenty of information and create a feeling of security, and to demonstrate that we are a stable and long-term employer with clear objectives.

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Photo: Lise Eide Risanger / Storebrand

Storebrand Asset Management has been around since the early 1990s and you are now established in several countries, offering many different products through your own companies SPP Fonder, Skagen, Delphi and Cubera, as well as a range of asset management services. What are your thoughts as you look back on the journey you have made and what is your vision for the future?

Our ambition has always been to be a leader in sustainable asset management. This is still our ambition today and is maybe even more relevant now than ever. A few years ago, we took the decision to move beyond our home markets of Norway and Sweden, while at the same time broadening our range. We are in no doubt that we have an important role to play in the Nordic and European markets, both as a challenger and a leader in sustainability.

At our recent Capital Markets Day last December, we made clear our ambition to be a Nordic powerhouse in asset management. By this we mean that we will provide clients throughout the Nordic region with robust and sustainable asset management solutions. We will offer Nordic solutions to those looking to invest in the Nordic region. We will provide sustainable solutions to customers outside the Nordic region using our strengths as a Nordic asset management firm. For us to be an all-round partner, it has been important to establish capacity and develop solutions within alternative asset classes such as private equity, unlisted bonds, infrastructure and real estate. As a leading Nordic asset management firm, we have a clear ambition. A powerhouse generates more energy than it consumes, and we hope that our employees and clients feel this is an accurate description of Storebrand Asset Management.

What strengths do you think come from establishing yourself in several countries and working internationally with offices in several locations. What perspectives/lessons have you gained from this?

The main strengths are that we can reach more people with the services we offer and help to drive social change in a larger arena. We may be small in global terms, but we have a lot to contribute and we stand for values that are important to many of our international clients. The Nordic region has an extremely good reputation around the world, particularly in terms of sustainable asset management. It is also important not to underestimate cultural differences, even within Europe and the Nordic countries. Our international development has been instructive and at times demanding, but above all a lot of fun. I also think we learn a lot from establishing ourselves in new markets, as well as from our new clients. It makes us an even better asset manager in our home markets of Norway and Sweden.

Turning the clock back a little, Storebrand Asset Management has been working with sustainable asset management since 1995. Comparing those days with now, over a quarter of a century later, what is the main difference in your work?

The biggest difference is that we are no longer a lone voice. In 1995, we were the odd one out and we constantly had to explain the value of sustainability. Now there are few who doubt the wisdom of integrating sustainability into management and who fail to see the value in it. We have better access to data now than we did back then, which enables us to perform better analyses and make smarter decisions. We have greater power to innovate and we are better able to scale up our work. It is also much easier to find specialist expertise now than it was then.

Our work has also developed over time and we have increased awareness of our operations far beyond the Nordic region. We are involved in more international strategic alliances and investor collaborations. “Partnership is the new leadership” – when we collaborate with other investors, companies and authorities, then we can bring about real change. Two examples of Storebrand’s leadership are our new climate strategy, which contains lobbying criteria, and our work to prevent deforestation in Brazil.

The global sustainable development goals have been adopted during this journey and are to be met by 2030, which is just under 10 years away. What do you think is the biggest challenge facing us (the world in general) in terms of achieving this? And how have you adapted your products to the targets set to help achieve this?

Generally speaking, more of us need to do more. Everyone has to make a contribution from their own field of activity. The debate often gets caught up in discussions about contrasting approaches or whether something is right or wrong. There are many different ways and means of achieving the same goal and this is something we must respect. There is a lot of focus on the climate, which is a good thing, but we must not forget social and governance factors in ESG. We need to maintain a holistic and strategic mindset, as E, S and G are often interconnected. Overcoming social challenges can be essential to resolving climate-related challenges.

I have confidence in the ability of market forces to help us achieve the sustainable development goals, but it is vital here that externalities are priced in. This means setting a sufficiently high price for CO2 emissions, for example, and for there to be a cost involved in consuming resources and failing to deal with or recycle the resulting waste. This will enable market forces to be effective and capital will quickly be reallocated. That is why cooperation between the authorities, companies and investors is so important.

Companies that oppose sound legislation or other measures through lobbying activities are, in our opinion, not sustainable in the long-term. There is also a need to invest more capital in solutions that have a positive impact. We have integrated the global goals into our analysis, which we believe is a smart way of gaining a good understanding of what is needed for us to move forward. We also have our Storebrand Global Solutions fund, which is focused entirely on the global goals.

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Photo: Lise Eide Risanger / Storebrand

There are many different UN-supported initiatives for investors and guidelines to follow, as well as several different collaborative bodies in which to participate. How important are these various collaborations for your business?

There is a lot we can do on our own, but together we are much stronger. Working with like-minded people increases our ability to establish real change. One example of this is our continuing work to stop deforestation in Brazil, which represents a major risk to both the planet and our investments. We have brought together 50 investors from all over the world to put pressure on the Brazilian government. You can read more about this ongoing initiative here.

You signed the UN-backed Sustainable Blue Economy Finance Principles in November to support the transition to more sustainable use of our marine resources. What impact will this have on your management in the future?

We have a sustainable investment policy that applies to all our investments. It includes both our climate strategy and our forestry strategy, as well as our support for the more sustainable use of marine resources. The various strategies and initiatives that we employ are mutually supportive. There is a strong link between climate and biodiversity both on land and in the oceans.

The Sustainable Blue Economy Finance Principles are part of The Sustainable Blue Economy Finance Initiative, the world’s first global framework designed to help banks, insurers and investors to contribute to a sustainable blue economy. The first objective of the initiative is to develop specific action plans, products and tools to help financial institutions promote, through their business operations, an economy that is sustainable for our oceans.

In 2021, our work within this area will focus on:

Guidelines for industry operators, which will be published during the first quarter of 2021 and include specific, technical measures that will enable financial institutions to realign their operations with The Sustainable Blue Economy Finance Principles. These guidelines focus on five main sectors: fish and shellfish (farmed and wild caught), maritime transport, ports and related services, coastal and marine tourism and renewable marine energy.

In the future, we will intensify our efforts in terms of active ownership within the marine sector and these guidelines will form an important part of the dialogue with various companies. They will also help us to select companies within the blue sector that fulfil specific sustainability criteria.

You offer a range of different investment options at Storebrand Asset Management, including funds, infrastructure and real estate. In the current market climate, why is it so important for professional investors to have access to such a wide range?

Alongside the strong trend towards sustainable investments, we are also seeing an increasing proportion of investments being made outside the listed markets for equities and fixed income securities. There are various reasons why our clients are choosing to invest in alternative asset classes. First, it provides a significant degree of diversification, something which has become increasingly important given the globalisation we have experienced. Secondly, we are seeing increasing value creation away from the stock market (and other listed assets), for example in private equity and unlisted bonds, but also within infrastructure and real estate. We want to be able to offer our clients a wide range of sustainable investment solutions, including within alternative asset classes. The positive feedback we have received clearly shows that this is highly valued by our clients.

The latest asset class you are expanding into is infrastructure. Why did you choose to broaden your range with this particular asset class?

Infrastructure is a very exciting area, particular in terms of sustainability. We are now enabling our clients to co-invest with us in asset classes that have the potential to make a real impact, while at the same time the investment has the potential to provide attractive returns and diversification benefits.

As we begin a new year, could you tell us about one of your goals for the next 12 months? And what are you most looking forward to?

I am extremely pleased that a vaccine is now available and some sort of end to this pandemic is in sight, with the communities which have been shut down able to return in good health. I am also looking forward to continuing our international journey and establishing ourselves more strongly, primarily in the Nordic region, but also in the rest of Europe. Naturally, we have financial ambitions and above all I want us to carry the energy and team spirit that we had in 2020 forward into 2021. We have good opportunities to create value again this year and not just in terms of the returns to our clients.