AP4, one of Sweden’s four main buffer funds in the national pension system, is aiming to increase the proportion of its equities portfolio that is invested in low-carbon strategies.
Its target is to have 30% of its equity investments in low carbon investments by the end of this year.
Niklas Ekvall, chief executive of AP4, said: “Our low-carbon strategies, which reduce the climate risk in the assets, have now increased to 27 percent of the global equity portfolio with a target to reach 30 percent by the end of 2017.”
The SEK348bn (€36.4bn) pension fund’s focus on sustainability was continuing and constantly evolving, he said.
“Our ambition is to further broaden and integrate the analysis of sustainability aspects as part of our investment process, both in terms of risks and business opportunities,” Ekvall said.
In the first half of this year, AP4 made a return of 5.2% after costs, the fund reported.
In absolute terms, the result was nearly SEK17bn, it said, bringing total fund capital up to SEK348bn from SEK334bn at the end of December.
Seen over the past 10 years, AP4’s return after costs had been on average 6.5% a year, it said.
Both domestic and international listed equities contributed strongly to the six-month return, with returns of 11.7% and 8.7% respectively, AP4 said.
Real estate produced a positive return of 10.4% but fixed interest investments were only just positive with a 0.3% return between January and June, the pension fund said.
A stronger Swedish krona had had a negative impact on returns in the period, it said.