Sarah McPhee is a Sweden-based entrepreneur and non-executive director for companies across various industries. Her work spans from Houdini Sportswear to the Fourth Swedish AP Fund with assets valued at €35B ‒ her most distinguished assignment being her position as Board director of Klarna, the Swedish fintech unicorn. Throughout her career, Sarah has also held management positions in Handelsbanken, GE Capital, and PwC, managing union pension assets totaling €40B. More recently, Sarah served as CEO of SPP and VP of Storebrand, a Norwegian/Swedish life savings company. Along with all of her accolades, Sarah recently founded Clusjion, a data-driven tool for mapping and visualizing discriminatory and non-inclusive behavior in the workplace with the aim of aiding individuals in reaching their full potential. I sat down with Sarah to discuss current trends with ESG in Norway.
Christopher P. Skroupa: It seems like the forefront Nordic investment strategy is to look at ESG from a holistic engagement focus. What does this focus mean, and what is its importance?
Sarah McPhee: The word holistically doesn’t necessarily translate into Nordic engagement focus but certainly Nordic companies and their investors have a long tradition of taking social factors like unions, equal pay, work environment quality, and employee participation very seriously. Nordics value the connection between releasing the potential of their own employees and creating a larger sense of responsibility towards society, for example related to the environment. Nevertheless, Nordic companies never neglect their financials due to any societal mission, they see that good business creates good results in the long term.
Skroupa: Looking further into the investment strategy, what criteria determines if a company is investment-worthy?
McPhee: Ultimately, we can’t get away from looking at whether a company is undervalued or overvalued by the market, through its financials. But before we get there, a prerequisite is understanding how the company is strategically dealing with social and environmental strategies, especially in light of the current political and social climate. For example, even if the discounted financials look good for a specific auto manufacturer, a primary question would have to be, how is this manufacturer coping with the long term disruption in transportation? The same would also be true for legacy retail. Ultimately, what we see all around us are companies that appear to be overvalued; companies that are often thought to be coping well with the future, but perhaps have poor strategies regarding their employees and their social impact.
Skroupa: What advice would you give to investors looking up to the Nordic region for best tips and techniques in making ESG investments?
McPhee: I think wherever an investor turns, they should be asking for metrics and strategy regarding future scenarios. Of course, we can all only speculate what may happen, but thinking strategically shows signs of long term value. That being said, the Nordics rate well on every list of sustainable companies in their respective sector, so I would mainly say, invest Nordic!
Check out our upcoming conferences here: https://skytopstrategies.com/conferences/
Follow us on twitter @SkytopStrat, and on Facebook @SkytopStrategies. Find us on YouTube, too, for exclusive interviews, panel discussions and debates that are prime examples of the market moving dialogue held at our various conferences and summits around the world.