Sustainability and Corporate Governance Report 202
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HANDELSBANKEN FONDER – HOW WE TAKE ACTION TO REDU
CE CLIMATE IMPACT Sustainable energy – a prerequisite for the climate transition Patric Lindqvist, fund manager of Handelsbanken Hållbar Energi, gives his view on the drivers behind renewable energy. He notes that the area must grow if we intend to achieve the climate goals. Yet there are several significant sustainability risks we need to manage. Climate goals are becoming more ambitious from a policy perspective. The US has rejoined the Paris Agreement, and China, the world’s biggest emitter of carbon dioxide, announced this year that it would be carbon-neutral by 2060. These political events, together with the EU’s targeted action plans, have led to a growing interest in renewable energy investments. Patric Lindqvist, who has managed the sustainable energy fund Hållbar Energi since 2015, notes that while the drivers behind the energy transition are urgent, high standards are placed on the analysis of the companies that develop solutions in the field. “The goal of the investment strategy is to invest in companies that offer technology or methods that can mitigate climate change and its effects. So, our mission will be to balance the sustainability risks, which are always present in the companies, with the opportunities to help achieve the climate goals.” He notes that a sustainable business model is always the starting point, but that the companies do not necessarily have to take the correct approach from the outset. The analysis takes into consideration not only what a company does today, but how it runs its operations and its intentions to tackle sustainability in the future. “There are companies whose operations currently face sustainability challenges yet offer long-term solutions for a reduced climate impact. In these situations, we believe it is better to actively engage with them than to abandon them. Here, too, we understand that as active asset managers we have both a responsibility and a significant opportunity to help such companies evolve in a more sustainable direction.” Knowledge lies with the portfolio managers Lindqvist believes that a fundamental part of his work is visiting the companies and their worksites. Simply relying on internal experts and external analyses isn’t enough. He must understand for himself the specific sustainability challenges facing each company. “By speaking with nature conservation experts, legislators and representatives from local communities, I gain a deeper understanding of what the challenges are,” Lindqvist says. “ The area must grow three to five times faster than GDP for 30 years” Patric Lindqvist, Fund Manager “Lithium, for example, is an element that plays a key role in reducing climate impact through its use in batteries for electric cars. But mining is far from trouble-free. Much of the world’s lithium extraction also takes place up in the Andes, where Chile, Argentina and Bolivia meet, which means that the sustainability challenges differ greatly among the countries. In Chile, for example, water scarcity presents a major challenge, while other sustainability issues are in focus in Argentina and Bolivia. By visiting the sites myself and conducting a thorough analysis, I can gain a better understanding of the differences between the companies, the regions and the regulations.” Information about risk Past performance does not predict future returns. The value of the money invested in the fund can increase or decrease and there is no guarantee that all of your invested capital can be redeemed. The fund’s prospectus (“Informations broschyr”), fund rules and KIID are available at handelsbanken.se/funds. 22