Not everything that says sustainability is actually sustainable. Experienced impact investor Peter Jäderberg knows that, especially in the case of supposedly green investments on the capital market, only a minimal proportion actually generates a sustainable impact. Why he criticizes the EU legislation on the Green Deal, how he experienced his own first crowdfunding project and where he wants to be in ten years - the native Swede and Hamburg resident finds clear words in the interview. You can find the first interview here.
Peter Jäderberg (PJ): This rate of increase sounds good, but it is at far too low a level. The same report also highlights that only 6.4 percent of all fund investments in Germany are attributable to the sustainability sector. In other words, only one in 16 euros. That is shamefully low. This is not how we will achieve the 2030 sustainability goals. There is neither a lack of investor will, nor a lack of truly sustainable investment opportunities. But the "willing" capital is mostly misdirected.
First, the fairy tale is still being spread that sustainability costs returns, which apparently deters most people from trusting green investments at all. When the will for sustainability does prevail, about 95 percent of it is invested in sustainability products that are transacted via the capital market, i.e., stock exchanges or purely synthetically as ETFs. Green bonds or ELTIFS can be a positive exception.
But I estimate that 99 percent of the share investments remain in the stock market cycle and only one percent actually reaches the companies in the real economy. And not all of that is used for sustainability.
PJ: If we want to promote the sustainability goals, we not only need more sustainability efficiency in investment, but we also need to invest in companies and projects that offer an important, system-relevant change as a solution. And that is often best done directly in the companies or projects, rather than through the stock markets, which is also expensive.
While I criticize the misuse of sustainability ideals by the capital market and the rather counterproductive EU legislation on the Green Deal, they give us all food for discussion and visual lessons on how not to do it, and thus a sharpened orientation on what should matter in sustainable investing. In other words, a better ear for wonderful melodies or even symphonies.
I am particularly optimistic about the large and, during the pandemic, rapidly growing number of people internationally who are dedicated to impact investing. However, this term has also been "hijacked" by the capital market and threatens to become meaningless on the surface.
PJ: If you don't know what to look for, I'm afraid rather not. Just the current overwhelming number of sustainability products, I mean about 95 percent, have no actual sustainability impact to speak of.
By that, I don't mean that they are bad financial investments. On the contrary. They will do better in the long run than traditional stocks that are selected based on financial metrics alone. It's a good bet on sustainability, and on the surface you can suggest a good conscience. But the money hardly ever reaches the real economy and thus, already due to the system, cannot bring about real sustainability.
PJ: These were the first exciting steps together with a trustworthy, experienced partner, Innovestment. The timing was a challenge - we started in spring 2020, right at the beginning of the pandemic. The uncertainty in society over the last year and a half does not mix well with a long-term illiquid investment, especially if it is a niche topic. When people are uncertain about the near future, they understandably prefer to park their money in the stock market or in short-term investments.
But we are confident and patient that we can also reach and inspire many investors in this way. Digital brokerage makes the subscription process easier for everyone involved. But it has also taken away some of the closeness to our investors. Investing without individual advice and without personal contact is just as much a challenge for everyone. This is where we have to learn together and find new ways.
Viewed purely strategically, over the long term, and as our fundamental decision, a sustainable world for us also means financial inclusion. In other words, every private investor should also have the opportunity to participate in good, sustainable and attractive investments at fair conditions. Otherwise, the gap between the super-rich and ordinary citizens will widen even further, which poses a threat to the stability of a society.
PJ: A multi-layered topic. I am in the fortunate and privileged position of being an entrepreneur. I determine my own field of activity as far as possible. That means, as a first answer, that I don't have a "job", but rather a vocation to let off steam in what is important to me and is fun. Administrative duties excepted.
My curriculum vitae is anything but linear, and where I have arrived today, as an intermediate stage, is not something I would have imagined even ten years ago. But when I look back at my life, I can see a stringent, quantum leap development.
Today, as an entrepreneurial investor, i.e. as a designer, I get to work with people and projects that are dedicated to solving global sustainability challenges. For the most part, new paths are being taken. Even linguistically, in communication, we are allowed to reinvent terms. Designing free spaces creatively. Teamwork with like-minded people. A spirit of optimism. That's great fun. But 95 per cent of the implementation is hard work and discipline. Others have more fun with that than I do. If the projects are successful, we create added value. The monetary benefit is a side effect. To actually contribute to making the world more sustainable, environmentally friendly, socially responsible or ethical is blissful. Drive for more.
Another privilege is being able to exchange ideas with like-minded investors, entrepreneurs and people. The international networks of impact investing are full of people who are oriented towards purpose, who are driven with heart, soul and mind to actively create a much better world in many ways with targeted investment projects.
But also the daily little things bring joy: It is beautiful, pleasant and fragrant that sandalwood products surround us everywhere in the office and at home: sandalwood lotion, perfume, teas, jewellery, aboriginal art, etc. This reminds me daily how much I appreciate sandalwood. It's a daily reminder of how much my current world has changed for the better compared to when I worked on Wall Street. Today, for me, it is not about fictitious bets on the stock market and analysing meaningless stock market manipulations, but about a precious tree that is considered sacred in many cultures, that is saved from extinction through cultivation in Australia and that provides us humans with many wonderful products and moments through its healing and beneficial effects. I am particularly pleased to be able to exchange ideas and learn from the daily encounters with people - whether in our growing team, in the international network or with investors who join us and our ideas and solutions for a better world.
PJ: In the next ten years, so many doors will open again. Moreover, we are moving globally in such serious upheavals as our grandparents last experienced.
In 2030, we will see together how far we have come in achieving the UN's many important sustainability goals and where we are on the path to an ideally regenerative balance between human behaviour and nature.
Entrepreneurially, we will have successfully completed several impact projects and launched many more. We will see sandalwood in natural cosmetics and remedies, in veterinary and perhaps even human medicine, as tea and food and as spiritual jewellery on the market. As an investment, there will then be a sandalwood token that includes ongoing proceeds from climate, biodiversity and social certificates in addition to harvesting revenues.
In addition, our alliances with other players from the impact investing sector will have expanded and solidified, because for us, trusting cooperation is the key to the necessary scaling of meaningful sustainability transformations.
Personally, I will then be a healthier and better life partner, father, probably grandfather. This includes acting closer to my values and as a courageous citizen.
Peter Jäderberg founded his first company during his studies, conducting institutional stock trading and analysis on the NYSE (1985-1991). The insights and knowledge gained there made the Swedish-born investor a convinced stock market sceptic and a supporter of niche and real asset investments. From 2004 to 2010, he and his team initiated and conceived 28 international alternative investment projects in a dozen different, mostly sustainable assets and implemented them as white label products for third parties. More than 1.5 billion euros were invested in these projects. In 2009, the Hamburg resident, who has lived there since the age of twelve, got to know the Australian sandalwood project. This made such a lasting impression on him that the number-crunching entrepreneur became the first international institutional forest investor there.
For this purpose, the Jäderberg & Cie. group was founded in 2010, which has since been built up into one of the largest sandalwood companies in the world together with highly qualified partners and employees. Since 2019, the JC portfolio has been expanded to include more unique projects that solve fundamental sustainability challenges in a disruptive or transformative way. Peter Jäderberg is involved in the international impact investing networks and contributes with articles, interviews and lectures to educate the public that sustainable investing is merely a stock market bet on sustainability, while impact investing alone additionally and actually brings about sustainability in the real economy.
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