The companies Kjaer’s firm invested in saw an 11% jump in total revenues last year, while their operating profit (Ebitda) went up 35%, according to its website. In June, FSN said it had to take in more investor cash than planned after its latest financing round was oversubscribed. The 1.8 billion euros ($2.1 billion) it generated will by placed into mid-sized companies in Northern Europe that live up to so-called Article 8—or light green—standards as defined in the EU’s Sustainable Finance Disclosure Regulation.
Rebecca Svensoy, FSN’s legal counsel, says part of the firm’s strategy is to assume that the world will look different as the fallout of climate change makes itself felt.
“We have prepared for a transition scenario and an adaption scenario, on a portfolio level,” she says. Part of that involves having a “separate due diligence approach” that specifically targets climate change, she said.
Kjaer says that “for every investment we do and every action we take in a portfolio company, we must have a 10-year-plus horizon.” The upshot is that the strategy at FSN “is aligned with” limiting temperature increases to 1.5 degrees Celsius, as targeted in the Paris Agreement.
But Kjaer isn’t one to kid himself on the broader outlook. Even that level of temperature rise implies a “huge worsening” of the climate compared with today, he acknowledges.
So adaption is a strategy that “we need to apply,” he said.
This article was provided by Bloomberg News.