2020-04-01 Bloomberg Markets Magazine

(Jacob Rumans) #1
Daly is the chief of Bloomberg’s Stockholm bureau.

engaged and serious long-term investors can make,” says Syse,
now a research professor and vice chair of Norway’s Nobel
Committee, which awards the Peace Prize.
Over time, Kjaer became one of the most sought-after
names in the investment industry. He’s an adviser to sovereign
wealth funds in China and sits on the supervisory board of APG,
which manages the Dutch pension fund ABP. In Norway he’s
chairman of FSN Capital, where, he says, “our investors tell us
that we’re leading in the global camp of private equity firms”
when it comes to highlighting ESG issues such as the carbon
footprint of portfolio companies. At Sector, which has about
$2.5 billion of assets under management, all the funds have taken
ESG principles into account in their investment policies.
Kjaer says it takes time to make investors fully aware of the
financial risks associated with climate change. That’s especially
true now, as markets sink into panic. When he first started sounding
the alarm to investors and governments two decades ago, he says,
it was hard work getting people to listen to what he had to say,
particularly in the U.S. He’s since seen signs that money managers
are starting to wake up, citing the ABP pension fund as a leading
example of how to actively manage carbon footprints.
To show how attitudes are beginning to change, he points to
Sweden’s central bank, the Riksbank, which in November announced
it was dumping bonds issued by some local authorities in Canada
and Australia with high carbon dioxide emissions. Not long ago, it
seemed inconceivable that a central bank would take such a stand.
Kjaer also says the crisis triggered by the coronavirus might
teach the world some valuable lessons about how we organize
our societies and economies: “It’s a wake-up call, and a reminder
we need to have our house in order.”

THE OPENING SLIDES of Kjaer’s presentation at the Norwegian
University of Life Sciences earlier this year were filled with dire
data. The last time the atmosphere’s concentration of carbon
dioxide had reached today’s mark, the global sea level was as
much as 20 meters higher than it is now. China is moving back-
ward on climate change, opening a new coal-fueled power plant
every second week. Some estimates suggest there may be
200 million climate refugees by 2050, and the damage could cost
$54 trillion. “I have seen the maps of the planet in 30 years’ time,
and there are places you cannot live anymore,” Kjaer says.
He’s aware that clever investment strategies will never be
enough to reverse the damage. “What is needed is a total shift in
government policy,” he says. He calls the U.S. decision to abandon
the Paris Agreement particularly disturbing. “I have to be more
optimistic. Behind those governments there are real people, with
children and grandchildren, who will see more and more
evidence—and that will force those governments to act.”
Kjaer feels the pressure within his own family. He says his
mother teased him for “having a dishwasher, for having a car, for
having a big house. So I am not good at all.” And then there are his
own grandchildren to take into account. The youngest, who was
born on Christmas Eve, will be 30 by the time the direst climate
change predictions have played out: “Looking into their eyes, I ask
myself, ‘What future are they going to inherit from us?’ ”

“I have to be more optimistic.

Behind those governments there are

real people, with children and
grandchildren, who will see more
and more evidence—
and that will force those
governments to act”

VOLUME 29 / ISSUE 2 63
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