How does sustainability impact Swedish fund managers' investment choices?

Abstract

The purpose of this essay is to examine and to get a better understanding of how fund managers in Sweden invest according to sustainability and how their investment decisions are affected by sustainability. To examine this subject, a qualitative study was conducted in the form of several interviews with Swedish fund managers from equity funds and Swedish national pension funds. The result showed that sustainability is deeply integrated and has a fundamental role within the entire investment process by all fund managers. However, divergences between the different types of fund managers were found regarding prioritization of sustainability and profitability. Fund managers from Swedish national pension funds clearly prioritize profit, and use sustainability as creation of future return. While equity fund managers integrate sustainability in the investment process with a combination of values and beliefs, which they think will contribute to long-term profit. Based on the analysis of the fund managers, a seven step model is presented showing how sustainability is implicated in the investment process.