​SAUGESTAD The angry generation strikes back

Brexit, Trump, The British election, climate disagreement, globalists vs. nationalists and increased differences between generations have put the world in a state of increased tension. "The political development affects our consumer behavior including the way we invest", says Jan Erik Saugestad, CEO of Storebrand Asset Management.

Sustainable investments, both in terms of AUM and number of funds, have increased rapidly in recent years. In the financial sector, sustainable investment has long been a niche market, but now has a growth rate in Europe twice the industry average. While institutional investors still account for a large part of sustainable investment, the number of private investors has grown rapidly from 3.40 percent to 22 percent according to a survey on the European market*.

- When political power is insufficient we, and especially the younger generations - consume to express our preferences and make a difference.

- We see the same pattern when it comes to savings, and in my mind, it is part of the reason why we see greater interest in sustainable investments. Making a difference while making money has become attractive alternative to traditional savings and increasingly important, says Jan Erik Saugestad CEO of the largest private asset manager in Norway, Storebrand Asset Management. 

Financial and environmental crisishas had a major effect on younger generations, causing concern that long-term economic, social and environmental damage is adversely affecting their future, Saugestad continues.

-They feel let down and worry that they are paying for previous generations' lack of concern for coming generations. They are angry and they have the right to be. They want to make an impact and buy into companies that generate return while at the same time improve society.

- Increasingly, asset and wealth managers are responding to the younger generation's point of view. We have more than 20 years of experience in sustainable investments, and we see it as our fiduciary duty to integrate sustainability in our investment processes. Investors need to understand and manage all risks and capture all opportunities through a better understanding of the environmental, social and governance issues. It is also the right thing to do.

"Green is good, Green works"
However, the sustainable highway to heaven is only partly built according to Saugestad. Trump's non-global attitude and drop-out of the Paris agreement risks legitimizing companies and people who want to avoid climate commitments. Even though the United States has reduced its use of coal by more than 30 percent since 2005 there is an unfortunate symbolism in the fact that a world-leading nation refuses to show political leadership on climate issues.

- Fortunately, one single person can´t stop the positive momentum and commitments at state and city level in the US, but it is not sustainable leadership and it is not economically viable in the long run.

- Today's misuse of the Earth's natural resources is one of our biggest challenges of our times. Sustainability is not just a set of values, it is real economic value that affects a company's economic performance and stock price. Global issues such as climate change present financial risks, but also important investment opportunities. The future has to become greener, green is good, green works. When consumers know it and companies know it the money will follow. We stand shoulder to shoulder with the angry generation; we want to make a difference, and generate returns.

In April 2017, Storebrand launched its first fossil-free fund to immediate commercial success. The groups fossil-free funds in Sweden launched in 2016 has attracted over 10 billion in just one year. A clear indication that sustainability is high on the agenda for both institutional and private investors.

*Eurosif