Strategic asset management allows more environmental research
When Mistra (the Swedish Foundation for Strategic Environmental Research) was formed in 1994, its endowment was SEK 2.5 billion (bn). Its remit was to develop strategic environmental research, thereby helping to solve key environmental problems while fostering Swedish competitiveness and sustainable development. The plan was for the money to suffice to achieve a clear, socially beneficial impact on environmentally strategic areas over a period of 10 to 15 years. This plan was fulfilled — and exceeded. Today, well over 20 years since the start, Mistra has some SEK 3bn to keep supporting and developing research that promotes sustainable development. Yet, since its inception, the Foundation has invested over SEK 4bn in a wide range of research initiatives that have often demonstrably benefited society. The explanation for Mistra’s ability to ‘have our cake and eat it’ lies partly in the overall stock-market upturn and partly in the strategically selected asset managers who, over the years, have made wise investments with ample returns. This has enabled funding of more environmental research than was originally planned or hoped. Mistra invests some SEK 200 million a year in various research programmes, and our own scenario analyses of the Foundation’s available assets over time indicate that funding research on this scale can continue for many years to come.
Good return, limited risk and sustainable development
The capital market and its stakeholders play key parts in the attainment of long-term sustainable development. As an asset owner, Mistra is part of the market. Early on, the Foundation showed — in word and deed — a firm belief in sustainable investments. As the first institutional client of Generation Investment Management, founded in 2004 by Al Gore and David Blood, Mistra made a practical contribution to spreading the message that good returns can go hand in hand with long-term perspectives and a sustainable built environment. Mistra has also ventured to lead the way, acting as a seed investor (the first) in other contexts. Examples are M&G funds, Öhman Gröna Obligationer (‘Green Bonds’) and Stewart Investors (formerly First State Stewart). Since 2007, Mistra’s assets have been entirely invested according to sustainability criteria and with a long-term perspective. Rules on how the Foundation’s assets are to be managed are defined in the investment policy. It specifies, for example, objectives for investment activities and how the assets may be invested. ‘Mistra’s assets will be managed with a good return and limited risk, so that they can be useful both for funding of initiatives in the area of environmental research and for investing in companies whose operations contribute to global development that takes environmental, social and ethical values into consideration.’ (From Mistra’s Investment Policy, 12 December 2017.)
Active sustainability dialogue
Trust and transparency are guiding principles of Mistra’s ownership control. Continuous dialogue with asset managers safeguards a joint value foundation, internal skills and cooperation. Through its openness and interest in dialogue, Mistra also wants to be able to inspire others to contribute to sustainable development. Mistra also encourages meetings between researchers in Mistra-funded programmes and asset managers, for discussions on mutual learning that, in the long term, can helps to bring about asset management for sustainable development.
WE SUPPORT THE FOLLOWING INITIATIVES
PRI – Principles for Responsible Investment Swesif – Sweden’s Forum for Sustainable Investments Montreal Pledge CDP TCFD – Task force on Climate-related Financial Disclosures IIGCC – Institutional Investors Group on Climate Change Climate Action 100 + Green Asset Wallet 2018 Global Investor Statement to Governments on Climate Change
Asset mangagement and
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