This guest blog was written by Ylva Wessén, President and CEO of Folksam Group and also a member of the ICMIF Board of Directors. In the blog, Ylva talks about the importance of both diversity and sustainability for Folksam. We would like to thank Ylva for her permission to share this article with ICMIF members.
I borrow my introduction from Kamala Harris. “Because every little girl watching tonight sees that this is a country of possibilities. And to the children of our country, regardless of your gender, our country has sent you a clear message: dream with ambition, lead with conviction, and see yourself in a way that others might not see you, simply because they’ve never seen it before. And we will applaud you every step of the way.”
For Folksam, the work for gender equality is a matter of the heart. It is about everything from equal pensions, to how we work to ensure that cars are safe for both men and women, to the importance of balanced companies and diversity. Our two most recent key recruitments; The CFO of the Folksam Group and the CEO of KPA Pension are both women. I am very pleased to welcome Linn Edström Larsson and Camilla Larsson to Folksam.
In addition to the fact that a woman has been appointed Vice President for the first time, the outcome of the US presidential election will affect us in various ways. There is now greater hope for more clarity about the focus on the climate and once again hope that the United States will once again agree to the Paris Agreement.
2020 is a year that many of us will remember for a long time. In addition to being a human tragedy, the coronavirus pandemic has had a major impact on the financial markets, both globally and in Sweden. Despite the spring’s gloomy headlines and the so-called “horror index” hitting the ceiling, the recovery began quickly. The Folksam Group remained financially stable even when the situation was at its worst on the stock exchanges and the return up to and including the third quarter, for Folksam Liv (Life) at 2.5 percent, is doing well.
Folksam entered this crisis with a stronger balance sheet compared to the financial crisis in 2008. We can state that the regulations that emerged after that crisis, which Sweden’s financial supervisory authority Finansinspektionen monitors compliance with, have meant that the industry generally entered this crisis stronger compared to the previous one. time. This is now the first time that the Solvency II regulations have been used in a crisis, we are also learning things from that. At the same time, there is one characteristic that is decisive for how well you get out of a crisis – that there is experience of previous crises in the organisation. Folksam’s team has this experience and this, combined with our financial strength, provides a good starting point even if it may ignite new concerns in the financial markets.
The enormous support efforts both in Sweden and abroad and the fact that we will live in a low interest rate environment for a long time has contributed to the rapid recovery on stock exchanges. The stimulus packages involve increased borrowing and this will affect countries’ central government debt for a long time to come.
Moreover, responsibility and the financial world’s role in the transition to a sustainable world have been in focus recently, and from the Swedish side we can be a little modest to boast that the Folksam Group has a prominent position. We are among the largest private investors in green bonds in the world with SEK 30 billion (USD 3.1 billion), corresponding to more than 6 percent of our assets under management. Our long-term goal linked to the climate is to have net–zero greenhouse gas emissions in the investment portfolios by 2050. What makes our goal really ambitious is that we will achieve it by contributing to real changes in global emissions and not just by selling holdings with large climate footprints. This is why the signals that come from Joe Biden about the view of sustainability in general and the climate in particular are very important to us.
To achieve net–zero emissions, we need a policy that supports that goal and an important part of the United Nations-convened Net-Zero Asset Owners Alliance‘s work is to influence politicians. Our message to decision-makers is that now is our chance for a change as both climate and sustainability are in the spotlight. The driving force in what we do with assets under management has a strong connection to our vision, that our customers should feel safe in a sustainable world.