At Nordea we are experiencing growing interest in sustainable investments among our customers. And whereas interest previously sprung from ethical or climate considerations, we are now seeing broad interest in sustainable companies as an attractive long-term investment theme.
Ten years ago, few investors thought about sustainability when planning their investments. But today sustainable investment is a clear investment trend, resulting from a strong movement in our society. In fact, it has now reached a level where sustainable investment has almost become mainstream – not just among major institutional investors but also for many private investors.
Is it possible to obtain attractive returns on sustainable companies?
It used to be a widely held belief that investors had to forego a high return if they wanted to invest sustainably – that was in other words the price of a clear conscience. That might have been true once, but according to Nordea’s research, that does not at all have to be the case today.
“The strength of the trend is important when assessing future returns on sustainable investments,” says Kerstin Lysholm, head of Investments, which is the team that decides Nordea’s investment strategy.
Kerstin continues: “We believe that the strong and growing interest in sustainable investment will affect returns in a positive direction for many years to come. Moreover, sustainable investment strategies have become more sophisticated and now often deliberately aim at securing investors returns in line with the market – or higher – at the same risk,” says Kerstin.
Invest long term – invest sustainably
Many private investors tend to focus on day-to-day market fluctuations and forget the longer view when they invest. However, at Nordea we are experiencing growing interest in long-term investments. And according to Kerstin it is hard to ignore sustainability as a theme:
“If you’re an investor with a long-term investment horizon, you should definitely look into sustainable investments where we see strong future potential. And although day-to-day ups and downs in the markets get a lot of attention from the media and investors, you should focus at least as much on what will likely happen in the long term in order not to damage your long-term return. Investors who ignore sustainable investments are simply making a mistake,” concludes Kerstin.