The CEO of Sweden’s largest pension fund Alecta has said that unless governments step up their climate efforts, he does not see how the fund can meet its Net Zero ambitions, given the requirement to hold substantial amounts of sovereign debt.
Alecta’s chief Magnus Billing told RI that following the COP 26 climate conference he feels “a bit pessimistic” about the €111bn fund’s ability to meet its climate ambitions. “I don't really see how we're going to get to Net Zero as an institution unless we get some strong support from policy makers,” he said. “I'm thinking about government bonds and equivalent instruments here.”
Billing explained that Alecta, like most pension funds, will be required to “hold quite a substantial amount of government bonds or equivalent in our portfolio going forward” – an asset prized by funds for its relative safety and liquidity, which is important given the guarantees they offer to their beneficiaries.