Increase in work on responsible investment in the Church

“We are a long-term owner and integrate human rights, working conditions and the environment in investment decisions for both ethical and financial reasons,” says Anders Thorendal, head of finance for the Church of Sweden’s national level. Photo: Anna-Maria Sandström/IKON

In recent years, the Church of Sweden at national level has developed its asset management such that active efforts towards sustainable development are ensured. Today, the first annual report on responsible investment is being published, describing the work performed in 2011.

“During the year, we have taken measures such as expanding our work on corporate dialogue, in which we have discussed everything from freedom of expression to biodiversity,” says Anders Thorendal, head of finance for the Church of Sweden’s national level.
“Increasing numbers of assets managers are becoming aware of the link between sustainable development and value creation and allowing this to define their management. At the same, we are still in the minority, and this is what we want to change,” he says.

The assets are being managed by global and Swedish asset managers chosen with the greatest of care. The management is based on a finance policy that states that the national level of the Church of Sweden is to be an active player that rejects companies it does not wish to support and selects companies that contribute to sustainable development. In line with this, companies that contribute to solutions to global problems such as climate change, poverty and the shortage of clean water, are supported. Also, all dioceses and the Kyrkans pensionskassa occupational pension fund have now started to work to the same policy. Together they represent financial assets of SEK 17 billion.

Human rights and the environment in investment decisions

“We are a long-term owner and integrate human rights, working conditions and the environment in investment decisions for both ethical and financial reasons,” says Anders Thorendal. “But many asset managers are still sceptical towards incorporating sustainability issues in their analysis models, which traditionally take no account of how human rights or environmental impact affect the value of a company. Also, asset managers rarely have any training in these issues.
At the same time, a great deal has happened in this area over the past few years, among both asset managers and companies. We want to identify the best companies so that we can achieve good returns in the long term,” says Thorendal.

In recent years, the asset managers that the Church of Sweden engages for global and growth market funds have provided a return that has exceeded that of conventional management. In the experience of the Church of Sweden, companies that are good at sustainability are often also well-managed in general terms.