As Sweden looks to reorganize its embattled 1 trillion kronor ($90 billion) pension system following an embezzlement scandal, the office overseeing the process says it won’t accept applications from asset managers that don’t incorporate ESG (Environmental, Social and Governance) into their strategies.
“Unlike in the current system, there will be a requirement that the manager systematically integrates sustainability aspects into its operations,” said Erikl Fransson, executive director of the Swedish Fund Selection Agency, Bloomberg reports.
The move underscores the wildly divergent approaches different jurisdictions are taking as they figure out how big a role ESG should play in mainstream investing. In Europe, ESG is currently being hardwired into financial regulations. In the US, lawmakers just voted to block the pension industry from taking ESG risks into account.
The decision only affects pensions under the state’s control. Sweden’s private
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