Swedish pension fund for government staff Kåpan Pensioner has extended its sustainability work, doubling its holdings in green bonds and boosting investments in firms that have won awards for sustainability.
The SEK75bn (€7bn) pension fund also announced that at the end of 2018, it had switched from having a large proportion of its global equities in passive index funds to owning them directly.
Kåpan said in a statement: “We conduct impact dialogues and will soon take a more active ownership responsibility in the Swedish and global listed companies we have invested in.”
The fund said the move allowed it to actively choose companies from a sustainability perspective and increase its influence as an investor.
“Our selection process means that we have greatly reduced the number of companies we are invested in,” said the fund.
Kåpan has also doubled its investments in green bonds over the course of 2019, which now account to 4% of the total market value of Swedish fixed interest investments in its portfolio.
In September, the pension fund invested SEK260m in a new environmental, social and governance focused (ESG) fund — the M&G Global High Yield ESG Bond Fund — which has a three-stage screening process for potential investees focusing on ESG factors.
Kåpan explained that it is also taking steps to become a more active investor, saying that it has conducted “impact dialogues” with 48 companies in 2019 regarding their environmental practices, with the help of its external supplier ISS ESG - and invested in 26 of these firms.
“During the year, we also conducted impact dialogues with two Nordic banks where we have holdings, primarily within the fixed income management, regarding their need to strengthen their ESG work,” the pension fund said.