Finsif tukee vuosittain vastuullisen sijoittamisen tutkimusta stipendein
Finsif jakaa stipendejä vastuullisesta sijoittamisesta kiinnostuneille opiskelijoille ja tutkijoille. Stipendien jaon tarkoituksena on edistää vastuullisen sijoittamisen tutkimustyötä. Stipendejä jaetaan vuosittain enintään 8000 euron summalla. Vuoden 2023 stipendihaku alkaa keväällä. Lisätietoa
The sustainable investment industry has developed greatly over the past few years and currently, it is facing both challenges and opportunities. There does not exist any official definition for sustainable investing or standards to practice it which has made both investors and asset managers confused, leaving room for misunderstandings and even greenwashing. Currently, there is a lot of regulation being prepared all over the world, with the aim of overcoming these challenges.
In my master’s thesis, I studied the sustainable investing practices of asset managers operating in Finland. Specifically, I aimed to find out how these asset managers currently practice sustainable investing, how they communicate about it, and how they prevent greenwashing in their practices.
In order to find answers to these questions I organized an online survey which I sent to 31 asset managers, out of which 24 answered all the mandatory questions. The respondents of the survey include all the notable asset managers operating in Finland. The thesis was done as a commission by Scandinavian Financial Research Oy.
How sustainable investing is practiced?
Based on the survey, every asset manager operating in Finland practices sustainable investing, and most of their combined assets under management are invested sustainably, which is great news. They use multiple different strategies of which ESG integration is currently the most popular, followed by negative screening, positive screening, and corporate engagement and shareholder action. Asset managers also have various motivations for sustainable investing, the most popular being making a positive impact on the society and environment.
Sustainable investing is practiced in every asset class and surprisingly it is the most popular in fixed-income investments, followed closely by equity investments. Traditionally equity investments have been the most popular asset class to invest sustainably, and fixed income has faced difficulties related to ESG integration. The popularity of different alternative investments differs, for example, the majority of the respondents practice sustainable investing in real estate, but only a few in commodity investments.
How do asset managers communicate about their sustainable investing practices and prevent greenwashing?
Evaluating the sustainability of sustainable investments is difficult and therefore to reduce the asymmetric information in the investment markets asset managers should communicate their sustainability practices clearly. Most of the asset managers are signatories of the PRI and members of Finsif and disclose information related to their sustainable investing practices by committing to different initiatives, reporting according to different frameworks, and publishing sustainability-related material on their websites.
Currently greenwashing is an issue in the investment markets and the asset managers acknowledge that. Therefore, it is important to know how asset managers prevent it in their practices. According to the results of the survey most commonly asset managers use transparency in their practices to avoid greenwashing. Many of the respondents also avoid too positive wording when describing their investment products and use conservative approaches with the SFDR articles. Additionally monitoring, reporting, and using high integrity were mentioned as ways to prevent greenwashing.
To conclude, asset managers operating in Finland seem to take sustainability seriously and they have taken actions to improve their sustainable investing practices. It will be interesting to see how the industry will develop in the future and specifically how the problem of greenwashing can be overcome. Asset managers hold great power and hopefully, they will act as leaders in the sustainable investment industry and contribute to resolving the many environmental, social, and governance-related challenges that we currently face.
Reeta Jutila
Sustainability analyst, Scandinavian Financial Research Oy
M.Sc (Economics), Finance, Graduate from University of Oulu, 2022
