Sweden’s largest pensions provider, Alecta, has been slapped with a red light rating – the lowest of three traffic light categories – in consultancy Söderberg & Partners’ new annual sustainability report, falling from its amber rating in last year’s report.
The report also saw commercial pension provider SPP delighting in a green light assessment, and KPA Pension joining its parent firm Folksam in the amber category this year – a rise from 2020’s red assessment.
Johanna Lundgren Gestlöf, head of sustainability at SPP, said: “It feels extremely gratifying that our sustainability work is once again being noticed by Söderberg & Partners. It’s proof that we’re doing the right thing.”
Söderberg & Partners said it chose to focus on three areas it believed were the most important and showed the clearest differences between the providers’ sustainability work – advocacy work, sustainability ambitions and value creation, and their process for sustainable investments.
The consultancy, which has been producing these annual assessments since 2014, said in a statement: “More and more pension companies are adopting climate promises, but few have incentives for ESG integration, Söderberg & Partners’ latest sustainability analysis shows.”
It added that it sent sustainability questionnaires to the 12 pension companies, and used these answers, along with publicly-available information from the firms, to form a sustainability rating that was relative to each other.
Alecta’s head of governance and sustainability, Carina Silberg, said in a statement that her firm was of course disappointed with the analysis in the report compiled by Söderberg & Partners.
“But when looking at the criteria, and how we are being assessed we simply do not recognise their description given our investment strategy and ESG integration,” she said.
It was simply not correct to say Alecta was missing a systematic approach to sustainability, she said, adding that in fact, the firm’s investment process for equities and corporate bonds was certified in accordance with the initiative ESG4Real.
“Our portfolio is different from other large asset managers since we have such a narrow selection of companies, and invest in those we already believe are doing a good job within ESG,” she said, adding that this also made Alecta’s dialogues with the companies different.
“If you only have 120 well-selected companies in your portfolio, it does not make any sense to have hundreds of dialogues when we can follow their work and see that it is developing in the right direction,” Silberg said.
She went on to say the report was focused on processes and did not take account of the outcomes of ESG work and sustainable a portfolio was. Alecta had the lowest equities carbon footprint of all firms in the report, she said.
But Silberg added: “Of course we can – and should – always become better, and there is a lot of development to be done in the coming years.”