According to Evli's Head of Sustainability, green funds are now clearly more attractive to investors than before, and they produced a higher return than so-called traditional funds last year. Evli has systematically worked to promote responsible investment. In the SFDR ratings set by the EU, for example, 97% of the investment bank’s funds are already classified as green (Article 8 or 9).
Head of Sustainability, Outi Helenius, tells how the importance of green funds is now even further emphasised, especially as interest is constantly growing among investors. Gradually, the preconceived notion that you cannot earn good returns with green investments is also disappearing.
“If we look at last year’s statistics, the ESG (Environmental, Social and Governance) funds have outperformed the traditional funds. In the past, there was a lot of talk that these were not worth investing in, since people thought they had a greater risk of poor returns compared to traditional funds. Now this thinking has changed, and people see that, when it comes to responsible investing, you can also earn good returns. In our portfolio management mandates, also, we are increasingly moving from index ETFs to ESG funds. Their volume is already getting to be so big that there is no longer a significant difference in, for example, index investment costs,” says Outi Helenius.
At Evli, we are developing sustainability in a comprehensive manner on a wide scale. What do the funds' SFDR ratings mean?
The EU Sustainable Finance Disclosure Regulation (SFDR) requires funds to be classified into three categories with regard to the consideration of sustainability factors. Mainstream funds (Article 6 funds) do not take sustainability factors into account; light green funds (Article 8 funds) promote sustainability factors among other features; and dark green funds (Article 9 funds) aim to make sustainable investments. Evli’s SFDR ratings show that Evli has a high proportion (97%) of its funds classified as green (light green and dark green), unusual even at the European level.
Evli is proud of this result, which is of great significance even internationally. The high share is not due to a jump in the sustainability trend in recent years, but rather it is based on long-term work.
"At Evli, we have always thought that we don't want just a few responsibly-themed funds. In fact, we have very few funds that have the word sustainable or responsible in their name, but our funds still have an emphasis on green factors and values. This result confirms the long-term thinking that we have done in our funds to promote sustainability," tells Helenius.
Another reason for the high result is that Evli’s Portfolio Managers are heavily involved in sustainability issues. The Head of Sustainability sees this as a key factor, as it gives a different perspective on issues.
"When we are writing on principles or even climate targets, the Portfolio Managers are involved in the decision-making process, bringing alternative perspectives and ideas. In particular, they comment on what the general guidelines mean in practice for companies. This means that they can and should provide critical feedback on proposals where appropriate. I prefer to hear that an idea is difficult to implement or otherwise challenging already in the preparatory stage, before it is taken to the client," states Helenius.
EU legislation will have an impact in the future
According to Helenius, with EU legislation, the role of green funds will strengthen in the coming years.
"The importance of sustainability will continue to grow when, for example, the EU climate change mitigation legislative packages are reshaping the market. For example, the EU is introducing a measure where all investors will be asked for their opinions and views on sustainability and sustainability preferences. The EU's aim is to channel more money into responsible investments, and then those whose funds already meet the criteria will be in a strong position."
Read more about Evli´s responsible investing
Find out more about ESG fund reporting
For more information please contact:
Outi Helenius, Head of Sustainability, Evli Bank Plc, tel. +358 40 720 6859, outi.helenius@evli.com
