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Bloomberg
The entire wealth and asset management business of Nordea Bank Abp — which currently oversees about $425 billion — may exclude all investments that aren’t deemed sustainable in as little as half a decade.
The unit is already “very close†to that goal, and will probably be “100% ESG†in “5 to 10 years,†Frank Vang-Jensen, Nordea’s chief executive, said in an interview. About 70% of fourth-quarter flows into the wealth arm targeted products tied to environmental, social and governance goals, driving assets under management to a record.
Issuance in sustainable assets, including transition products, will soar to more than $1 trillion worldwide this year, according to estimates by SEB AB, the bank that helped arrange the world’s first green bond over a decade ago.
As ESG investing grows, questions remain around what constitutes a sustainable asset. Driven by investor demand, issuers and asset managers are increasingly focusing on transition products, whereby companies that aren’t green yet have committed to cleaning up their acts, and get added to portfolios marked as sustainable. Some definitions are so broad that even chemicals shippers are included.