12-07-2021 11:26

Surge in ESG investing in the wake of the pandemic

When stock markets nosedived at the start of the pandemic, who could have known that a year later they would be at an all-time high with ESG investing as one of the winners?

As the COVID-19 crisis hit the world in early 2020, our customers’ interest in investments and financial markets increased rapidly. The number of subscribers for weekly investment updates and participants in investment-themed webinars multiplied within a few weeks.

Kerstin Lysholm, Head of Investments in Investment Center, describes how our customers reacted to the sudden downhill move in markets in March 2020:

“Our clients approached us through various channels with the quite understandable reaction to liquidate their holdings, trying to limit their losses. In response, but also proactively, we emphasised the importance of sticking firmly to one’s investment plan to avoid the potential losses many clients would likely incur from excessive trading in volatile markets. This message was delivered repeatedly in multiple channels and the media.”

By asking our customers about their preference, we give them a moment to pause and reflect on their own values and beliefs. These dialogues have been crucial for our customers’ first steps towards ESG investing.

Kerstin Lysholm, Head of Investments in Investment Center

 
nordea-head-of-investments-kerstin-lysholm

Sustainable Choice products make up nearly 25 per cent of all new investments

Now, after living for over a year in global pandemic circumstances stock markets are higher than ever. The anticipation at the start of the crisis was that interest in investments with sustainability in focus might decrease as investors’ focus switched to survival mode in their portfolios. What actually happened was the opposite.

“We ask all our customers about their preference for enhanced focus on sustainability in terms of their savings and investments. During the COVID-19 crisis, their interest kept growing, and our customers are also acting accordingly, as we can see in the flows of new investments into our ESG saving and investment products,” says Pontus Slotte, Head of Savings Office in Personal Banking.

The blockbuster product with Personal Banking customers has proven to be the Sustainable Balanced Funds where net flows reached 1 billion euros recently – only 19 months after the product was launched. Sustainable Choice products now make up almost 25 per cent of all new investments made by private customers.

“By asking our customers about their preference, we give them a moment to pause and reflect on their own values and beliefs. These dialogues have been crucial for our customers’ first steps towards ESG investing,“ Kerstin Lysholm concludes.

ESG and Sustainable Choice

The abbreviation ESG is often used in connection with sustainability matters and investments with a specific sustainability focus. It stands for environmental, social and governance.

Sustainable Choice is a product universe that contains our savings and investment products with enhanced sustainability focus. They have particular focus on sustainability but also meet all our other product quality requirements related to factors such as risk, return and costs.

News Topic
ESG
Sustainability
Insights