Since founded in 2009, Sensor Fonder have made sustainability a key part of their investment strategy. In recent years, the focus on sustainability has become increasingly central, both due to stricter regulatory demands on financial market participants and growing evidence that sustainability and profitability are not contradictory—rather, they complement each other.
Since founded in 2009, Sensor Fonder has made sustainability a key part of their investment strategy. In recent years, the focus on sustainability has become increasingly central, both due to stricter regulatory demands on financial market participants and growing evidence that sustainability and profitability are not contradictory—rather, they complement each other.
"Initially, both we and the industry at large focused solely on excluding unethical investments. However, in recent years, we have expanded our sustainability efforts to include not only exclusions but also a more structured inclusion and engagement strategy," says Philip Karlberg, CEO and Head of Sustainability at Sensor Fonder.
Inclusion means that Sensor's portfolio managers actively choose to invest in companies that are working proactively to improve their sustainability practices. Additionally, Sensor Fonder themselves actively engages in sustainability advocacy. By participating in shareholder meetings and engaging in direct discussions with company management, this engagement forms a vital part of their sustainability efforts.
Their Sustainability Analysis
Sensor Fonder's sustainability analysis is a fundamental component of their sustainability work. It serves as the basis for investment decisions, outlining the criteria and methods used to evaluate sustainability. This analysis is updated twice a year and provides a comprehensive assessment of potential investments, including a detailed review of companies' environmental, social, and governance (ESG) factors. This process ensures that investments are sustainable in the long term. The sustainability analysis also forms the foundation for determining whether an investment qualifies as sustainable under Article 2.17 of the SFDR.
Potential for Higher Risk-Adjusted Returns
Investing in sustainable companies has also shown potential for delivering higher risk-adjusted returns. "Sustainable companies generally face lower risks of unexpected sustainability-related events, such as corruption scandals, fines, or environmental accidents. A significant part of our sustainability analysis focuses on understanding which sustainability risks could negatively impact stock prices. Sustainable companies also often benefit from cheaper financing, which ultimately means more money for shareholders," Philip explains.
Statistics indicate that climate investments need to increase significantly, which, through subsidies and cheaper financing, provides yet another advantage for sustainable companies. Thus, investing in sustainable businesses can offer benefits beyond the social and environmental impact.
Strong Sustainability Ratings
A testament to Sensor Fonder's conscious investment choices and well-executed methods, and proof that even smaller organizations can successfully incorporate sustainability into their management, is the sustainability score of 87 out of 100 that Sensor Fonder received from the United Nations Principles for Responsible Investment (UNPRI).
PAI-Statement for 2024
In June, Sensor Fonder will publish its second PAI-Statement (Principal Adverse Impacts) for 2024. PAI is a standardized way of measuring the negative sustainability impacts of various investments. The report highlights the adverse effects our investments may have on sustainability factors and demonstrates how we work to minimize these impacts. It also shows in which areas we have made improvements and provides deeper insights into what we consider important for further enhancing our sustainability work.
For example, the PAI report shows that the proportion of investments in companies that have not taken steps to reduce their carbon emissions in line with the Paris Agreement has significantly decreased. Previously, 64.5 percent of Sensor Fonder's investments were in such companies, but this figure has now dropped to around 15 percent. This is a clear sign that more of our investment targets are actively working to reduce their emissions and contribute to a more sustainable future.
Read more here.
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