“This is something that we can see is important for a clear majority of our customers, and we want to influence our industry’s ability to take a long-term approach and promote sustainable development,” says Billing, who sees no conflict between the goals of growing the pension funds and taking sustainability into consideration.
“We are convinced that companies that lead sustainable development will also be the long-term winners on the stock market,” he says. “It’s a clear win-win situation. SKF is one of the holdings in our portfolio where we can see that the company has a strong focus on sustainability.”
Alecta’s asset management is managed independently and in-house, and all investments are based on solid analysis. The stock portfolio is limited to some 100 holdings, which means that Alecta often is a big and important owner, making it possible to influence a company’s direction. This is usually done through dialogue with the board and management, often in a proactive way. A recent example is an exchange between Alecta and Google’s parent company, Alphabet, which is one of Alecta’s five biggest stock holdings.
Early in 2018, Google and YouTube, which is owned by Google, came under fire because extreme right-wing and anti-democratic material was distributed through these channels. In March 2018 Alecta initiated a dialogue with Alphabet to investigate how the company intended to address the problem.
We are convinced that companies that lead sustainable development will also be the long-term winners on the stock market.
“We had a good dialogue with Alphabet, which provided relevant information, and our impression is that they take these problems very seriously,” Billing says. “We could see that Alphabet was investing huge amounts in artificial intelligence, where the algorithms learn how to recognize and flag inappropriate material. They presented figures that indicated that during the month prior to our meeting, 98 percent of the material that had been flagged was removed. We will of course continue to follow how Alphabet is handling these issues.”
Billing was named the only Swedish member of the European Union’s High-Level Expert Group on Sustainable Finance. The group was formed in December 2016 with a mission to develop proposals for the E.U.’s strategy for achieving a sustainable financial system. It was led by Christian Thimann, group head of regulation, sustainability and insurance foresight at the French insurance giant AXA. Other members included Pascal Canfin, CEO of WWF France, and Flavia Micilotta, executive director at Eurosif, the pan-European sustainable and responsible investment membership organization.
“I am very proud that I was given the opportunity to contribute to the work with recommendations that have resulted in specific and concrete proposals to increase the possibilities of investing in sustainable transformation; supporting [the idea] that sustainability is considered in financial decisions,” Billing says.
In September 2018 Billing was named chairman of the advisory board of the Stockholm Sustainability Finance Center, an initiative by the government of Sweden, the Stockholm Environment Institute and the Stockholm School of Economics. The aim of the center is to accelerate and promote the shift in capital investments required to deliver the sustainable development goals and climate targets set by the United Nations.