The Swedish Goverment urges AP funds to invest in low carbon

The Swedish Finance Minister Per Bolund urges the Swedish AP pension funds to mitigate climate change and to invest more in low carbon. He reminded in the SVD´s interview http://www.svd.se/bolund-ap-fonderna-ska-leda-klimatomstallningen/om/svd-2-grader today, that the financial markets are revaluating fossil fuels and assets.

– It is our duty to mitigate the climate change and make the risks for pensions lower, Bolund stated. He would also like to see that the AP funds would work harder to communicate the climate change and to mitigate it. – We would like that AP funds would be the leaders in this field, he said.

The Swedish Goverment is also considering other changes in the pension system. There are plans that three of AP funds will be merged together, but the fund leaders have been againts the proposal while they are afraid it will raise the risks in the overall pension system. In France the Goverment have guided that all the institutional investors have to calculate the carbon footprint in their portfolios. The aim is to highlight the follow up and reporting on carbon emissions and raise the awareness of climate change.

Finance

The Swedish Pension Fund AP4 to focus on climate change

The leading Swedish Pension Fund AP4 is focusing on governance and climate change issues. In PUB+ interview the managing director Mats Andersson, also the Ambassador of UN Decarbonazation Coalition, says that they have done the portfolio decarbonazation over three years ago and  their target is that by 2015 they have all the equity assets as low carbon assets. Mr Andersson was speaking in EarthRate ESG discussion in Stockholm.

-This year we will analyse the Asian markets  and Japan. We have done the earlier
research related to US and European markets. This work has helped us to
minimize the carbon output by 50 per cent, he says.

– In Sweden our focus is on Governance and Climate Change. Abroad we will
focus on working together with other AP funds and other engagement
funds, especially in Japan, he says.

Andersson says that good governance is about diversity, owner-driven strategies and transparent policy.

The fund assets were 295 billion Swedish kronor and  the fund is also awarded by the IPE as the Best Public Penson Fund in 2014.  According to the company during the last 10 years the total return has been 7,6 per cent in average. Last year the total return was 15,7 per cent after the  costs and the fund made their record profit of 40 billion Swedish kronor.

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Video Fiona Reynolds: PRI´s Montreal pledge targets 3 trillion dollars by Paris 2015

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Responsible Investment organization ´s (PRI)  managing director Fiona Reynolds says that the low carbon Montreal pledge initiative for investors is targeting 3 trillion dollars by Paris 2015 talks. ComteamPUB+ met her in Helsinki while she was one of the keynote speakers in EarthRate´s ESG conference in January 22nd 2015.

– There is lot of discussions about low carbon and climate change issues among investors. Especially the Paris 2015 negotiations, where we hope to see a global agreement around climate change issues. So the first thing for investor is to understand your fund and its exposure to carbon assets. Then it is easy to make possible judgements in the portfolio. Montreal carbon pledge targets 3 trillion dollars before the Paris 2015 talks and we have now 15 investors that have signed the initiative, says managing director Fiona Reynolds in Helsinki.

Mrs Reynolds also says that this decision may not be easy one and investors normally start with the equities in their portfolios.

– Although there are some investors that have taken the initiative to all their asset classes. This is also a possibility for investors to engage with companies and have a dialoque about how to transit from high carbon to low carbon economy, she reminds.

Montreal carbon pledge was launched in Montreal, Canada September 2014. This is the first step for investors to measure and disclose the carbon footprint of their equities portfolios on an annual basis. At the moment for example these signatories have signed the initiative: AP funds, Nordea, Calvert and Calpers.

Interview: Päivi Härkönen

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