Sweden’s AP3 aims to halve carbon footprint and triple green bond holdings

Leading investor also wants more corporate carbon disclosure

Tredje AP-fonden (AP3), the SEK304bn (€33bn) Swedish buffer fund that sold out of all its shares in coal mining firms in May last year, has announced bold new targets to slash the carbon footprint of its investment portfolio.

Under the new targets AP3 says the carbon footprint of its holdings in listed equities and credits “will be halved by 2018” (compared to 2014).

And it also aims to help develop the market for green bonds in accordance with COP21, saying: “We will more than triple our holdings of green bonds from SEK4.5bn to SEK15bn by the end of 2018.”

The fund will also double its strategic sustainability investments in water treatment to SEK20bn. It will also work with Scandinavian real estate firm Vasakronan, in which it has a 25% equity stake, will continue to lead the way in sustainability in the real estate sector in Sweden. AP3 is also urging all companies to issue reports regularly on their carbon footprint by 2018 “at the latest”.

“For us, this is about high standards of corporate stewardship and social responsibility and goodenvironmental practices,” said Mårten Lindeborg, AP3’s Deputy CEO and Chief Investment Officer.

“The introduction of these changes will affect the entire portfolio.”

“The introduction of these changes will affect the entire portfolio. As investors we are doing our bit, but ultimately it is up to the companies to ensure their operating activities are sustainable.”

AP3 began measuring its listed equity portfolio’s carbon footprint in December 2014 – and found it was “climate-neutral”. In November 2015, AP3 signed the Paris Pledge for Action, adding its weight to the agreement signed at the 2015 United Nations Climate Change Conference (COP21) in which 195 countries agreed to adopt challenging targets to tackle climate change.

Last month, the Swedish government abandoned a plan to consolidate the AP funds and cut executive salaries. AP3 Announcement