JAURI HÄKKÄ
PRINCIPAL
WIDHABY ADVISORS
Score prediction: FINLAND 2 – RUSSIA 1
INVESTMENT INSIGHT:
If the Nordic countries are sustainability leaders, how do they compare?
These days, sustainability is a hot topic among European investors. In my piece ahead of the Denmark-Finland match, I highlighted Nordic forestry as an investment opportunity and provided an example of an asset manager taking tangible measures to mitigate biodiversity loss.
I will continue on the theme, zooming out of a specific sector and looking at the countries that make up the region from a sustainable development perspective. How do these countries actually rank in a global comparison?
In a recently published (June 2021) report by the UN’s Sustainable Development Solutions Network and the Bertelsmann Foundation, Finland has, in fact, been ranked number one in an international comparison of sustainable development.
The ranking is published annually, and Finland has been within the top three in earlier years, together with Denmark and Sweden. The comparison assesses the progress made on implementing the 2030 Agenda for Sustainable Development and its Sustainable Development Goals (SDGs).
According to the ranking, Finland has achieved or is close to achieving the UN Sustainable Development Goals related to poverty alleviation, health, education, water, energy, reducing inequality, peace, and the rule of law.
There is obviously work to be done, but if you are looking for ways to improve your portfolio performance in terms of achieving stable returns and contributing towards UN SDGs, look at any of the Nordic countries. Regardless of whether you are looking at the public or private markets, equities, bonds or real assets.
ALAN MCGREGOR
PARTNER
AVC ADVISORY
Score prediction: FINLAND 1 – RUSSIA 2
INVESTMENT INSIGHT:
As our next opponents are Finland, once again we can draw on mutual themes and the desire for Russia to be a good neighbour.
Although it is late to the party, Russia is implementing its version of the European Emissions Trading System, to punish highly polluting corporates whilst creating a market for the huge renewable industry in Russia (remember Russia is not only Oil and Gas, but a huge energy producer in Nuclear and Hydro power).
What’s the angle to play this as an investor? Stay with me.
Russia has long been perceived as a ‘high polluting’ country, even after the end of the USSR, where 50% of the heavy industry stopped virtually overnight. One of the factors behind this is the huge underestimation of the size of Russian forests and their impact on the global environment.
Expectations from early predictions of ongoing forestry audits, in co-operation with our Finnish friends, think that the effect has been underestimated by up to 5-times!
Even more so than Brazil’s Amazon, Russian forests have been neglected in having proper topography and other modern surveying tools applied.
The impact from accurate calculations of these vast areas of green could mean that Russia would become the FIRST major world economy to be CARBON NEUTRAL.
The effects on this would surely boost the Russian market in general, and most possibly have a contrarian effect on the Russian hydrocarbon industry. This would bolster shareholder value when those companies can buy carbon credits from the government from the offset of Russian trees.
