Solutions Spotlight

Vestas Wind Leads Blade Recycling Coalition

Published June 23, 2021 | By Sunniva Bratt Slette

The research organization Bloomberg New Energy Finance reports that the Danish wind turbine producer Vestas Wind Systems will lead a global coalition to make wind blade recycling commercially viable.

Vestas Wind Systems is a frequently referred to "solution company", which is the term that Storebrand Asset Management uses to describe companies that contribute positively to the UN Sustainable Development Goals, without causing significant harm to society or the environment. The creation of new wind blades from discarded material fits nicely with Vestas Wind System's industry-leading ambition to build zero-waste wind turbines by 2040.

Key takeaways

  1. Storebrand aims to have 15% of total assets under management invested in solution companies by 2025. Solution companies that drive positive change to solve complex problems will be part of this cluster
  2. Wind energy is the green investment segment which is forecasted to have the highest growth potential towards 2030 and 2050 alongside solar energy
  3. Discarded turbine blades that end up in landfills pose a challenge for wind power producers
  4. The circular life cycle of wind turbines is crucial for wind energy as a holistic solutions theme
  5. Interdisciplinary coalitions with a mix of academic, entrepreneurial, and experienced business actors have the potential to drive innovation and set new standards in the global wind energy segment


Headwind Challenge

Today most turbine blades that reach the end of its life cycle are discarded to landfills because the material structure is difficult to recycle. BloombergNEF estimates that 250 000 blades will have to be decommissioned globally by 2030. To manage the reputational risks associated with unrecyclable materials to landfills, the industry is now acting on solutions. Increased customer focus on life cycle sustainability and regulatory measures to achieve circular business models contribute to nudge the development.

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Tailwind Solution

The wind technology magazine WindTech International writes that a new initiative will be led by Vestas Wind Systems, called CETEC (Circular Economy for Thermosets Epoxy Composites). CETEC will disassemble the blades into fibers and epoxy, the adhesive that glues materials together while maintaining flexibility in the blade. The next recycling step is a chemcycling process, which will break down the components into virgin materials that can be re-used for new turbine blades.

The coalition of partners from industry and academia thereby target to solve the major challenge of turbine blade end-of-life management for the wind industry.

Wind is Key to Reach Net Zero

The International Energy Agency (IEA) (page 14) report "Net Zero by 2050 – A Roadmap for the Global Energy Sector" recently shook the markets worldwide by presenting turnaround milestones for how to reach net zero emissions globally by 2050. The IEA has been perceived to be rather conservative in its estimates of growth in renewables and the role of fossil fuels towards 2050. In the most recent report, however, a pathway for rapid turnaround of global industries was presented. The step that gained attention was perhaps that there is no need for further investments in new fossil fuel supply projects, or final investment decisions in new unabated coal plants. The ambitious Net‐Zero Emissions by 2050 Scenario (NZE) describes how energy demand and the energy mix will need to evolve if the world is to achieve net‐zero emissions by 2050. To reach the 1.5 degree target of the Paris Agreement, the report calls for "scaling up solar and wind rapidly this decade, reaching annual additions of 630 gigawatts (GW) of solar photovoltaics (PV) and 390 GW of wind by 2030, four times the record levels set in 2020".


Call for Material Efficiency

Furthermore, the NZE scenario presents three main types of behavioral change, of which materials efficiency gains is one. Materials efficiency includes "reduced demand for materials, e.g. higher
rates of recycling, and improved design and construction" (page 67). As a key milestone and decision point, the report emphasizes that "Strategies should also include measures to reduce industrial emissions through material efficiency, for example by revising design regulations, adopting incentives to promote longer product and building lifetimes, and improving systems for collecting and sorting materials for recycling" (page 131).

To summarize, the wind segment becomes an even more attractive solutions theme with the combination of renewable energy and a fully circular life cycle. The high growth potential with a circular business model is essential to all companies' license to operate in the future. The sustainability pioneers of today need to stay innovative to capitalize on the solutions of tomorrow.


An overview of the blade recycling project can be found at Cision.com

Investing in Cybersecurity

Published June 10th, 2021 | By Ellen Grieg Andersen

Cybersecurity is the practice of protecting systems, networks and programs from digital attacks. These cyberattacks are usually aimed at accessing, changing, or destroying sensitive information; extorting money from users; or interrupting normal business processes.¹

As more companies become digitalized and use digital solutions there is an increased threat related to cybersecurity. Today it is also of utmost importance to have a secure digital identity as most economies and societies are increasingly relying on digital solutions, and we need these identities to access education, healthcare and the justice system. But because there are more devices than people, and attackers are becoming more innovative, it is more challenging than ever to implement effective cybersecurity measures.

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Photo: Markus Spiske, Unsplash.com


At the end of 2020 three cybersecurity companies, PaloAlto, Okta and Crowdstrike, were included in the Global Solutions portfolio under the theme Empowerment. The companies under the empowerment theme rely on secure digital solutions, as they deliver mobile financing, digital banking, internet etc. Companies such as American Tower and Nokia are naturally exposed to these types of attacks and needs cybersecurity as an important part of their strategy. According to the Nokia Threat Intelligence Report, cyberattacks on internet-connected devices are continuing to rise at a fast rate due to poor security. Infected IoT devices have increased drastically only in one year. And of all infected devices, internet connected (IoT) or smart devices amounted to 33 percent in 2020 which is up from 16 percent in 2019. According to Bhaskar Gorti (Nokia Software president and chief digital officer) this is because of the changing 5G ecosystem which makes it easier for actors to take advantages of vulnerabilities in IoT devices.²

But cybersecurity is an increasing necessity for most companies today, in fact the new IEA report emphasized the necessity of digital energy security on the way to becoming a net-zero economy.²

In 2019, sPower witnessed the first cyberattack on a wind and solar energy provider in Utah. These types of attacks could pose a huge threat as we are increasingly relying on renewable electricity and a consequence of attacks on power grids could for example be a power blackout.

If we are going to reach net-zero by 2050 we need to rely on renewable energy and digital electrical grids which poses a huge cyber risk. The rapid electrification of all sectors around the world makes energy security highly central which is why the resilience towards these types of threats towards the electricity system needs to be enhanced.³

Cybercrime is already in the top three fraud events for most industries today, and cybercrime is expected to cost 10.5 trillion annually by 2025. This is why it is important to include cybersecurity measures going forward, and why we view it as an important and necessary investment opportunity.

¹ Cisco

² Smart-industry.net

³ International Energy Agency, Net Zero by 2050 – A Roadmap for the Global Energy Sector, May 2021



Infrastructure Solutions in Africa

Published June 10th, 2021 | By Ellen Grieg Andersen

The African Continental Free Area (AfCTFTA), launched in January this year, opens up for many new possibilities in the African market and is likely to attract more Foreign Direct Investment (FDI). The new trade agreement has only been running for a few months, so it remains to be seen the full effect of the agreement. But if the fundamentals of improving good governance, the roads, rails, payment systems, and connectivity are in place the impact could be significant.

The AfCTFTA agreement will connect 55 countries, impacting 1.3 billion people with a total GDP value of $3.4 trillion, making it the largest free trade area in the world. This agreement is seen as a crucial driver for economic growth, industrialization and sustainable development and will boost trade throughout Africa as it allows for the continent to develop its own value chains. The World Bank estimates that the agreement could lift around 30 million people out of extreme poverty and 68 million people out of moderate poverty and make African countries more competitive.

Wealth of opportunities for fintech companies and tech-enabled logistic

The Free Trade Agreement is also likely to attract more FDI, which also would generate startup funding in Africa. This will create a wealth of opportunities for fintech companies and tech-enabled logistics and distributions platforms to name a few. Cross-border payments platforms already exists in Africa, such as fintech company M-Pesa owned by Vodacom and Safaricom, so going forward investments that keep building on this existing infrastructure will be important to make the payments between African countries more efficient.

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Infrastructure remains as an obstacle

Africa is one of the fastest growing economic hubs, and with a growing population the companies with an established presence in Africa will be better positioned to sell into this growing market, but poor infrastructure still remains as a major obstacle. According to the African Development Bank (AfDB), the market share for rail transport in most African countries amounts to less then 20 percent of total volume of goods transported.

Infrastructure and connectivity supporting the transition to a net-zero economy

Moreover, in many developing countries, with majority in Africa, lack access to electricity and the provision of large amounts of infrastructure is needed in order to support the transition to a net-zero economy. Developing countries have the majority of population growth and Africa alone is estimated to increase by more than 1.1 billion between 2020 and 2050.¹ Scatec is one example of a company that operates in several African countries to ensure access to clean and reliable energy to their growing population. In order to reach net-zero by 2050 it is imperative to have international co-operation. The new IEA report states: "For many developing countries, the pathway to net-zero without international assistance is not clear. Technical and financial support is needed to ensure deployment of key technologies and infrastructure."¹

Lastly, internet connectivity remains a challenge, which is needed to effectively conduct cross-border payments and creating digital identities. Thus, both physical and soft infrastructure connecting countries in Africa are still facing issues. Today, it is easier to ship by sea, so improvements in roads and rail system is imperative for a more effective trading system as rails are an efficient way of moving goods across long distances.

Investments in infrastructure in several African countries are already taking place. Last year it was announced that several companies, including Facebook, Orange, Vodafone and Alcatel Submarine Networks (a wholly owned Nokia company), will be building a 37,000km long cable around Africa and connect to Europe and the Middle-East. The cable will connect 21 landings in 16 countries and will be an important enabler for future growth of 4G, 5G and fixed broadband access for hundreds of millions of people.

China a major player in Africa

Furthermore, Chinese investments in Africa has grown rapidly during the last decade. And China is a major player in African infrastructure investments, which is why the country is expected to play a key role in the projects that would support African industrialization.5 However, these investments are seen as controversial as the investments under the One Belt One Road (OBOR) initiative are worsening the already high debt burden in Africa, which is why European policymakers claim that their policies are better than Beijing's. However, commentators point out that Europe could learn from Beijing as China have been working with Africa as true equals and put significant resources towards the building of economic infrastructure in partner countries in Africa and at the same time focusing on training and education.

The Guardian wrote "Even though the Covid 19 pandemic has slowed the dynamic growth rates, the continent's youthful population, economic potential and trade agreement will intensify international rivalry and competition, especially between Europe and China".4 The discussion around the difference between Chinese and Western investments in Africa have long been debated and several argue that despite its controversies Chinese investments have created a greater impact on economic development than that of Europe. The relationship between Africa and Europe have for many years been an imbalanced donor/recipient relationship. African governments have been looking for access to EU trade and aid preferences, but the European leaders have ignored the needs of Africa's younger generation and rather focused on privileged ties with African elites. Moreover, Europe's focus on keeping African migrants out has added to the mistrust, the Guardian writes.

Is Europe missing out by not seeing the full potential of this growing economy

Traditionally, the western view of Africa has been as one homogenous bloc. In order to take full potential of the continent's opportunities it demands detailed research to understand the nuances and unique opportunities of each region and individual country. The trade agreement further enhanced the several investment opportunities in Africa. Investment in both physical and soft infrastructure is also important to reach the UN Sustainable Development Goals. Even though the debt issue needs to be resolved, there is no doubt that Chinese investment at the continent have been influential and impactful. It remains to be seen whether European companies are potentially missing out by not seeing the full potential of this growing economy.



¹ International Energy Agency, Net Zero by 2050 A Roadmap for the Global Energy Sector, May 2021


The game has changed - the new Road to Net Zero

Published May 20, 2021 | By Philip Ripman

In the recent report by the IEA, entitled Net Zero by 2050, there are a few paragraphs and key points that are worth highlighting.

A comment on the recent report Net Zero by 2050 from IEA.

  1. Our pathway calls for scaling up solar and wind rapidly this decade, reaching annual additions of 630 gigawatts (GW) of solar photovoltaics (PV) and 390 GW of wind by 2030, four‐times the record levels set in 2020. For solar PV, this is equivalent to installing the world’s current largest solar park roughly every day. Hydropower and nuclear, the two largest sources of low carbon electricity today, provide an essential foundation for transitions. As the electricity sector becomes cleaner, electrification emerges as a crucial economy‐wide tool for reducing emissions. (Page 14)

    This is no small feat, but it is doable. It will however need cooperation between governments, regulatory bodies, civil society and the private sector. It also demonstrates the potential of solar and wind, and necessity of increasing investments in these areas.

  2. Providing electricity to around 785 million people that have no access and clean cooking solutions to 2.6 billion people that lack those options is an integral part of our pathway. Emissions reductions have to go hand‐in‐hand with efforts to ensure energy access for all by 2030. This costs around USD 40 billion a year, equal to around 1% of average annual energy sector investment, while also bringing major co‐benefits from reduced indoor air pollution. (Page 17)

    There are several aspects to unpack here – firstly that many people still lack access to basic infrastructure today, and that renewables represents a cost effective way of providing access to electricity. Secondly, replacing current methods of cooking and heat generation provides a tremendous improvement in health, given the local pollution caused by these sources today. The same holds true at large when replacing coal for renewables.


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    The new road to Net Zero


  3. Under the Paris Agreement, Parties are required to submit Nationally Determined Contributions (NDCs) to the UNFCCC and to implement policies with the aim of achieving their stated objectives. The process is dynamic; it requires Parties to update their NDCs every five years in a progressive manner to reflect the highest possible ambition. (Page 31)

    A reminder that for COP 26 later this year in Glasgow, nations will revise their Nationally Determined Contributions, and were urged in Madrid for COP25 to address the gap in current commitments and agreed warming goals. We will have more ambitious goals by the end of the year – but it remains to be seen if that gap is fully addressed or only in part.

  4. Cybersecurity could pose an even greater risk to electricity security as systems incorporate more digitalised monitoring and controls in a growing number of power plants, electricity network assets and storage facilities. Policy makers have a central part to play in ensuring that the cyber resilience of electricity is enhanced, and there are a number of ways in which they can pursue this (IEA, 2021c). (Page 176)

    An increasing role for cybersecurity in ensuring the transition to Net Zero. We have recently seen the effects of a cyber attack on a US fuel pipeline. Electricity grids, as they become "smarter" – will need to focus on ensuring the integrity and safety of these systems.

There is obviously more to address from the report, but the one key takeaway must be on the tremendous opportunities that lie within the transition – the massive role of renewables and electrification in ensuring a path to Net Zero.

The report is also a reminder that the game has changed and that we need to transform fast but also a reminder that the future is bright and that a Net Zero world is a better one.


Nordic Powerhouse

Published March 10, 2021 | By Sunniva Bratt Slette

A brand new Zero Emission Building (ZEB) Lab opened in Trondheim on Thursday March 4th 2021. ZEB Lab is a unique laboratory which is calibrated to discover future solutions for sustainable buildings.

Buildings account for approximately 40% of the energy consumption and 36% of CO2 emissions in the EU. Renovation and zero-emission building standards are therefore important goals of the European Green Deal, which aims to make EU's economy sustainable by 2050.

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The Zero Emission Building Photo: Sunniva Bratt Slette


As a response to global zero emission commitments, international collaboration paves the way for research on how to design zero emission and net positive energy buildings. A zero emission building (ZEB) produces enough renewable energy to compensate for its greenhouse gas emissions over the building's life span, including materials, construction, use and end of life . One step further is a powerhouse, which is defined as an energy-positive building that generates more energy than it consumes, also during its entire life span.

Interestingly, the number of powerhouses built in Nordic countries is relatively high. Considering the cold climate and harsh weather conditions, the surroundings are far from ideal to set such standards. However, the idea of making ZEBs and powerhouses work in the Nordics prove a point for demonstrating opportunities. How does snowstorms affect solar panels? If it is possible to design net zero emission or positive energy buildings that far north, it will certainly be easier to accomplish in warmer geographies with better access to solar energy.

Trondheim, a city in Mid-Norway, is a pioneer within smart city research. This opens for strong synergies both within the city, other Norwegian cities and with international partners. A comprehensive smart city project called Positive City ExChange is coordinated from Trondheim with international partners through the European Union's Horizon 2020 research and innovation program "Smart cities and communities" . The project combines urban planning, smart grids, electric mobility and clean energy to build a sustainable and resilient urban environment.

A brand new ZEB Lab was opened in March 2021. It is located at the campus of the Norwegian University of Science and Technology (NTNU Trondheim) and near SINTEF, which is one of Europe’s largest independent research organizations. World Economic Forumhas previously named Powerhouse Brattørkaia to be one of the most impressive zero emission buildings worldwide . It is the world's northernmost energy positive building, located at 63 degrees north latitude in. The new ZEB Lab is an exquisite complement to the northern building pioneer, found only three km south from the powerhouse.

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The Zero Emission Building Photo: Sunniva Bratt Slette


The ZEB Lab will contribute to connect the dots between already existing research facilities like the Norwegian National Smart Grid Laboratory and Living Lab, that respectively explore smart grid applications and zero emission residential buildings. Technically, the ZEB Lab houses 1500 sensors to monitor and optimize the indoor environment, energy use and production. The materials are reused as far as possible, natural ventilation and heat pumps are integrated, and wood is the core building material alongside the solar panels that cover three walls and the rooftop, as well as a wind shield in front of the lab. The ZEB Lab is a unique example of an energy efficient building that powers the surrounding built environment with 100 000 kWh of solar electricity per year.

As well as a research lab, the ZEB Lab will house offices and an educational auditorium. A main ambition for the lab is to investigate how humans interact with the building, and how technology can optimize buildings without overwhelming the users. Greenification by vegetation, rain collection and water management systems enable water efficiency and climate adaptation. Lastly, the location is ideal for public transport and micromobility access.

A fascinating aspect for an investment analyst is the number of solution themes that are represented in the project. The solar panels used on the ground in front of the building were delivered by the solution company SunPower. Examples of investment themes are energy storage and distribution, renewable energy, recycling and re-use of building materials, lighting, grids and infrastructure, water management, urban planning, energy efficiency, heating, ventilation and air conditioning (HVAC). What the ideal combination of different technologies looks like remains to be confirmed, but one thing is certain: Solutions can be found through zero emission building labs and Nordic powerhouses.

Visit zeblab for more information and a digital tour of the building.



The rise of Micromobility and Green Urban Spaces

Published January 22, 2021 | By Sunniva Bratt Slette

The Covid-19 lockdowns have disrupted human mobility patterns in almost all countries on the planet. Studies on the lockdown effects have started to emerge, and one phenomenon in particular has caught the attention of researchers: The rise of micromobility and the increased use of public green spaces.

Micromobility refers to walking, cycling or using small electric transport modes. Ideal for social distancing, micromobility and outdoors activities have increased in both popularity to maintain mental and physical wellbeing, but also as tools to spread out populations and mitigate the spread of the virus.

Researchers from the Norwegian Institute of Nature Research have published a paper which examines how social distancing measures in Oslo, Norway's capital, affected the use of urban green space during the partial lockdown. They found that outdoor recreational activity increased by 291% during lockdown relative to a three-year average for the same days, adjusted for weather differences¹.

In London, UK, the designer Helen Ilus came up with the idea of making a "Greenground Map" inspired by the iconic London Underground maps. Instead of showing the quickest connection between destination by underground trains, the Greenground Map links London's numerous green spaces and parks with the most pedestrian-friendly routes. The complete Greenground Map can be found on the London National Park City website.

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Photo: Gavin Haines, January 12, 2020, ‘Tube map for walkers’ links London’s green spaces


Team Solutions captured the micromobility trend in the solutions investment analysis of 2020. As a result, micromobility was integrated as a sub-category in the investment theme sustainable cities. A stock example that was introduced to the fund Global Solutions is Giant Manufacturing. Giant produces bicycles and has built up an entire ecosystem for electric bikes. It is an innovative firm that was a first mover in the use of light-weight materials and automated production of bikes. A win-win for consumers that get an easier up-hill bike experience, lower costs due to efficiency output, lower transport emissions in shipping and less material use in production.

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To address a crisis, new solutions tend to emerge. The corona crisis implicates that human beings are more adaptable to disruptive change than we thought possible. Norms and behavior can change quickly, and societal re-structuring can be bolted just as rapidly. The EU is ambitious to finance a green recovery from the demanding crisis with high human costs. This will hopefully lead to improved practices for better social and environmental sustainability. Urban planning that facilitates walking and cycling can improve both public health and reduces air pollution, which in turn can give higher life quality in the long run.



¹ Venter, Zander & Barton, David & Gundersen, Vegard & Figari, Helene & Nowell, Megan. (2020). Urban nature in a time of crisis: recreational use of green space increases during the COVID-19 outbreak in Oslo, Norway. 10.31235/osf.io/kbdum. - Urban nature in a time of crisis: recreational use of green space increases during the COVID-19 outbreak in Oslo, Norway

Related content

The Storebrand Global Solutions Strategy


Meet the team

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Philip Ripman

Portfolio Manager
  • Portfolio Manager, Storebrand Asset Management (2015-)
  • Storebrand Asset Management’s team for sustainable investments (2006-2015)
  • MA in Chinese Studies, and MA in Political Science.
  • Specializes within the areas of politics, climate change, the commercialization of sustainability and how to integrate the Sustainable Development Goals as investment themes.

Sunniva_Bratt_Slette_sirkel


Sunniva Bratt Slette

Investment Analyst
  • Investment Analyst, Storebrand Asset Management (2020-)
  • Sustainability analyst, Storebrand Asset Management (2017-2020)
  • Event Coordinator NTNU Sustainability (2016 - 2017)
  • MSc in Industrial Economics and Technology Management (NTNU, 2016 and Ajou University, South Korea, 2014)

Ellen_Grieg_Andersen_sirkel


Ellen Grieg Andersen

Investment Analyst
  • Investment Analyst, Storebrand Asset Management (2020-)
  • Project leader trainee, Storebrand Asset Management (2019 – 2020)
  • Master's degree in International Economics with a focus on China (Lund University, 2018) and a BSc in International Business in Asia from Copenhagen Business School (2017), including a semester at Fudan University in Shanghai (2016)


Paradigm Shift for a Zero Emission EU Transport Sector

Published December 14, 2020 | By Sunniva Bratt Slette

The European Commission presented a new strategy on smart mobility on December 9th. If this strategy is implemented, it represents a shift from incremental change to fundamental transformation of Europe's transport system.

"Sustainable and Smart Mobility Strategy" outlines a range of policy actions that are designed to deliver a 90% reduction in the EU's transport emissions by 2050. Team Solutions believes that the strategy reinforces the importance of the sub-theme "Mobility" in the solutions investment theme "Sustainable Cities". This topic is important in the Solutions Analysis process, both concerning the search for mobility solution companies that was performed in 2020 and going forward. Citing the report, key targets for a sustainable transport sector include:

By 2030:

  • at least 30 million zero-emission vehicles will be in operation on European roads.
  • 100 European cities will be climate neutral.
  • high-speed rail traffic will double.
  • scheduled collective travel of under 500 km should be carbon neutral within the EU.
  • automated mobility will be deployed at large scale.
  • zero-emission vessels will become ready for market.


By 2035:

  • zero-emission large aircraft will become ready for market.


By 2050:

  • nearly all cars, vans, buses as well as new heavy-duty vehicles will be zero emission.
  • rail freight traffic will double.
  • high-speed rail traffic will triple.
  • the multimodal Trans-European Transport Network (TEN-T) equipped for sustainable and smart transport with high speed connectivity will be operational for the comprehensive network.

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To reach these ambitious targets, the strategy is designed to be Sustainable (zero emission airports, marine ports, freight transport, urban and interurban transport); Smart (artificial intelligence, automated and multimodal mobility) and; Resilient (preventing the spread of pandemics, safe, affordable and accessible transport). A carbon pricing incentive is discussed in the report, extending the EU Emission Trading System (EU ETS) to include the maritime transport sector.

To summarize, the smart mobility strategy can indicate which sectors will benefit from the EU's capital allocation that is needed to reach the zero emission climate targets. Companies that operate within automation, electrification and seamless transport both in cities and internationally are well positioned to excel on the pathway to net zero emissions.



TechCrunch: Spacemaker, AI software for urban development, is aquired by Autodesk for $240M

On November 17th, breaking news hit the market that the American software company Autodesk has acquired the Norwegian scaleup Spacemaker. Autodesk initially became part of the Global Solutions fund in 2018, due to its pioneering within CAD, or computer-aided design. The technique allows for technical sketches, virtual design and testing using software. This leads to better design, more durable solutions, efficient product development and improved success rate of new products or buildings.

Team Solutions has kept an eye on Spacemaker for several years due to its innovative approach to urban planning and the use of artificial intelligence (AI) in the pre-construction phase of buildings. The strike of genius in coupling two such innovative business concepts and sound organizational cultures might pave the way for more sustainable housing. Considering the fact that we will be two billion people more in 2050 than we are today, sustainable densification of urban areas is highly necessary.

Autodesk is a significant position in Storebrand Global Solutions, with a market cap of 55,4 billion USD.

Read more about the acquisition at TechCrunch


Should we invest in e-commerce?

Published October 20, 2020 | By Ellen Grieg Andersen

The trend of investing in E-commerce has been identified by other asset managers as an investment opportunity, because of the industry's potential to enable inclusion, but we have taken a more holistic approach when identifying investment opportunities through the lens of the 2030 Agenda for Sustainable Development. Lessons from the pandemic has taught us that an even more emphasis should be put on the interlink between the SDGs. Health is linked to climate, climate is linked to finances, finances is linked to education etc. Thinking holistically, however, can sometimes be tricky as potential investment opportunities can slow down the development of other SDGs.



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Investing in e-commerce:

Empowerment lies in the heart of the Sustainable Development Goals (SDGs). A company's approach to equal rights and opportunities is an important factor in its business activities and its effect on sustainable economic growth in society.

E-commerce can be an important enabler for, especially women entrepreneurs to take part in the global market. According to World Economic Forum (WEF) the unfolding of the e-commerce revolution, has created a fairer and more inclusive balance by reshaping the global business environment to provide more room and opportunity for small business, especially those headed by women. The World Trade Organization (WTO), WEF and the Electronic World Trade Platform (eWTP) launched the initiative 'Enabling E-commerce' in 2017 to start the conversation on how e-commerce policy and practices can benefit small businesses.

Evidence show that e-commerce could be an important industry to drive inclusion. However, e-commerce can be harmful in the development of other key SDG themes, here is why:

  • Consumerism: consumer shopping habits have drastically changed over the last couple of years, even more so as a result of the ongoing pandemic. E-commerce has been a part of driving this habit as more products are available at competitive prices, driving the consumer to buy a new product rather than fixing the existing one. This concept can harm the development of a circular economy. Some parts of the industry, however, have addressed this issue by creating platforms that sells second-hand products.
  • Environment: the environmental impact of e-commerce has been proven difficult to measure, due to local transport, type of delivery etc. Studies have shown that 1 / 3 of all customers have returned purchased items within the period of three months. This causes double transportation and may require disposal of the returned product rather than resale. Some platforms disclose information on the environmental impact of the product, making some customers choose the eco-friendlier option. Even with this option many customers are likely to choose the cheapest and fastest solution, because the customers of e-commerce demand fast delivery. According to ICAO and McKinsey, air cargo transports 80% of cross-border B2C e-commerce shipments. On the contrary, some studies suggest that e-commerce can reduce CO2 emissions because customers will use their cars less by receiving their purchased goods at the door. Moreover, music and e-books are positive aspects of e-commerce because it replaces physical products with virtual ones. This reduces the use of raw materials and the energy needed to manufacture and transport the product¹.


These factors will make it difficult for players in this industry to be aligned with the upcoming EU Taxonomy.


Moreover, to ensure an inclusive e-commerce landscape other challenges of the industry needs to be addressed. Without the right approach big players can easily dominate the market. Reducing the digital divide should be emphasized to make sure that every stakeholder has access to digital services:


As we have demonstrated we can see several ESG risks linked to the industry. As of today, it is difficult to identify potential e-commerce companies to invest in, that does not harm the development of other SDGs. Hopefully new and emerging business models in e-commerce will develop in the future. As an investor, it is interesting to follow how the industry will develop, because it can be a powerful tool for growth and inclusion. The industry should take use of the potential it has to make an inclusive and environmentally friendly industry, creating growth for the global community.


¹Research and Markets, 2020 Report on the Environemntal Impact of E-Commerce, 2020


Smart Sustainable Cities

Published July 1, 2020 | By Sunniva Bratt Slette


Cities consume 80% of global energy and emit 70% of global carbon emissions. Last week I attended a digital conference on Smart Sustainable Cities, Transportation and Buildings in Toronto to learn more about recent innovation within sustainable urbanization. Virtual attendance, of course. My key takeaways from the conference are the following:

  1. Cities need to be constructed to set human well-being in the center, circular economies as a starting point, and integrate nature-based solutions as a key to climate resilient urban development.
  2. While good internet quality is convenient, access to digital services can not be taken for granted in all cities worldwide. Researchers from Lubumbashi, the second largest city of The Democratic Republic of the Congo, explained on a fuzzy line how the high cost of internet led them to program a new videoconference tool¹.
  3. How can we reduce the 40% of energy consumption is attributed to the building sector? Indian researchers showed how targeting heating, ventilation and air conditioning (HVAC) is a good start. HVAC consumes significant amounts of energy and is likely to grow explosively towards 2030 due to higher temperatures worldwide. An eye-opening technique is to use nature-based solutions like Natural Ventilation (NV). NV in building design means natural wind passages that reduce the need of electric ventilation, which saves energy.
  4. Utilize local building materials. Why not use sand from the Sahara Desert to get building materials and reduce desertification simultaneously? By mixing one third plaster and two-thirds dune sand, the researchers in Algeria produced a new and useable brick type².
  5. eHealth is a rapidly growing technology which enables user friendly access to health services and enables elderly to live at home for longer. Researchers from Hong Kong presented how simple sensors and Transfer Learning, a Deep Learning technology, could classify human activity with a 91.64% accuracy³.
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Summary

From an investor perspective, it is important to get an overview of the technologies and potential growth areas within promising investment themes. Sustainable cities is one of four investment themes in the fund Storebrand Global Solutions. The fund already invests in companies that typically operate in sustainable building materials, heating, ventilation and air conditioning (HVAC), urban planning, sustainable transport and energy efficiency. The International Conference on Smart Sustainable Cities provided new examples of innovative solutions within building technology, urbanization, communication, transport and healthcare. It showed that there are technologies and techniques that enable use of local building materials, prevents use of unnecessary resources and reduces energy consumption. There are crossovers between sustainable cities and empowerment, since access to digital services, financial services and health services are central enablers for societal participation and well-being. Going forward, investments need to find companies that enable cities to be constructed with human well-being in the center, set circularity as a starting point, and the integration of nature-based solutions as a key to climate resilient urban development. In spite of a global Covid-19 lock-down, the digital conference demonstrated that knowledge can easily cross borders.

¹Blaise Fyama, Elie Museng, Grace Mukoma, Conference Proceedings, Toronto Canada Jun 18-19, 2020, Part XI


²World Academy of Science, Engineering and Technology International Journal of Civil and Architectural Engineering Vol:13, No:6, 2019


³Bruce X. B. Yu, Yan Liu, Keith C. C. Chan, Toronto Canada Jun 18-19, 2020, Part IX, Vision Based Daily Routine Recognition for Healthcare with Transfer Learning


Access to digital services

Published May 18, 2020 | By Philip Ripman

It was announced recently that Facebook, along with several key companies will be building a 37,000km long cable around Africa and connect to Europe and the Middle-East. It will connect 21 landings in 16 countries in Africa and will "underpin the further growth of 4G, 5G and fixed broadband access for hundreds of millions of people".

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Source: www.prnewswire.com, 2Africa subsea cable


Digital inclusion is a key sub-theme in Global Solutions and includes several of the companies involved in this project, Orange and Vodafone specifically. A wholly owned Nokia company, Alcatel Submarine Networks is appointed to build the cable – also a company included in Global Solutions.

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Digital inclusion is a necessary pre-condition in order to achieve better access to financial services and better access to healthcare. This is typically the kind of activity and types of company that we want exposure to – companies that realize the staggering extent of the challenges and can respond accordingly.

There will be challenges ahead in this space, but this is a welcome development and one that reaffirms our thesis connected to Empowerment.

Facts on Empowerment

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  • The mobile industry connects over 3.5 billion people to the internet (47% of the global population), which means over half the worlds population remain offline unable to participate and unaware of the opportunities.
  • 69% of adults have a bank account globally, and roughly 1.7 billion adults remain unbanked.
  • Half the world lacks access to essential health services.
  • Women in low- and middle-income countries are 10 per cent less likely than men to own a mobile, which translates into 197 million fewer women than men owning a mobile.
  • Women make up half the world's population and yet represent a staggering 70% of the world's poor.
  • Only 52 per cent of women married or in a union freely make their own decisions about sexual relations, contraceptive use and health care.

Performance of Orange, Vodafone and Nokia

Orange - performance ytd -20% (as of 18/05)  |  Vodafone - performance ytd -19% (as of 18/05)  |  Nokia - performance ytd -1,8% (as of 18/05)

References

GSMA Connected Women – The Mobile Gender Gap report 2019

GSMA – The State of Mobile Internet Connectivity 2019

Global Findex Database 2017

UN Sustainable Development Goals


IB Green Minds: In conversation with Philip Ripman

Published April 2, 2020 | By The Imperial College Business School

"Nico chats to Philip Ripman, fund manager of the highly successful Storebrand Global Solutions fund - a fund focused on investing in companies helping to achieve the United Nations Sustainable Development Goals. They discuss Philip's unorthodox career pathway, his stand-out investment philosophy and Philip's view on how things may evolve after our current global lockdown", IB Green Minds writes.

Find 'IB Green Minds' episode on all your favourite podcast platforms, including Spotify


Bloomberg: Top ESG Manager Is a Philosophy Graduate With Outsized Returns

Published March 11, 2020 | By Jonas Cho Walsgard

"Storebrand fund ranks as the best performer of Europe’s highest-graded climate funds", Bloomberg writes.

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Read the full Bloomberg story