We have no hesitation in stating our condemnation of the Russian invasion and, not least, our sympathy with the Ukrainian people. For once, the word tragedy is in order.
While few will probably raise their eyebrows at that first paragraph, more people may wonder why we preface this report with a reference to the Russian invasion. We believe there are at least two relevant connections, in addition to the more obvious dimensions of ethics and morals.
First, one may argue that sustainable investment just got another layer of regulation: the sanctions against Russia. Whereas the bulk of the sanctions are directed at trade, every investor now has an obligation to make sure they don't contribute to breaching the sanctions. And this time it's about something far more serious than doing a bit more good. It's literally about life and death.
“Therein lies a sad, but useful confirmation that what we do makes sense: Choices made in capital markets do have an impact.”
We have no direct investments in Russia (nor in Ukraine, for that matter), and hence no investments we are forced to offload. Our portfolio companies, however, may be involved and affected in many different ways, so we have had to analyse our portfolios with regard to their Russian exposure. More on that topic later in this report.
A second point is that implementing sustainable investments may be considered as a kind of soft sanctions. Capital is allocated according to some specified criteria in order to reward desired activities and punish unwanted activities. The same goes for Western sanctions, although on a vastly different scale. Whereas you may have harboured doubts about the efficacy of such interventions by fund managers, at least Western governments see capital markets as a forceful weapon in the shadow war against Russia.
Therein lies a sad, but useful confirmation that what we do makes sense: Choices made in capital markets do have an impact.