Swedish pensions and insurance group Folksam, and its municipal pension fund subsidiary KPA Pension, have set new 2025 climate goals, pledging to reduce carbon emissions associated with their equities, corporate bonds and real estate portfolios by 29% by then.
Both firms also said they were aiming to persuade half of their highest-emitting investees to adopt science-based climate targets, and had adopted goals to promote the availability of green investments by convincing players in the primary market to offer them.
Ylva Wessén, Folksam’s group chief executive officer, said her company’s goal of net-zero emissions by 2050 was ambitious, but not enough: “It must be broken down into equally ambitious sub-goals, linked to credible plans and followed up regularly.”
Folksam said it had identified the 121 largest greenhouse gas emitters in its portfolio, and pledged to influence 50% of the 86 which remained uncovered by its current climate impact initiative to adopt scientifically-based climate targets – approved by the Science-Based Targets Initiative or similar – by 2025.
As things stand now, 23% of these firms have such targets, said Folksam, which is a founder of the Net-Zero Asset Owner Alliance, formed at the 2019 UN climate summit in New York.
Folksam said it would get companies to adopt these targets through shareholder and direct meetings and “other advocacy activities”.
The emitters it was focusing on had been divided into four categories depending on what level their climate goals and reporting were currently at, with sub-goals linked to each category, the group said.
Michael Kjeller, head of asset management and sustainability at Folksam, said: “We want to ensure that climate work is strategically anchored in the companies that the Folksam Group owns, especially among the companies that today have the largest climate footprint.”
The SEK483bn (€47.2bn) group said it would achieve the 29% emissions reduction in its equities, corporate bonds and real estate portfolios through advocacy activities, adding that divestment “may become relevant” where it did not see sufficient willingness or the ability for firms to adapt their operations in line with the goals of the Paris Agreement.
Camilla Larsson, KPA Pension’s CEO, said: “It is both about influencing the holdings we already have and about increasing the opportunity to be able to invest in more green alternatives.”
Folksam also announced an aim to promote the availability of green investments by further developing its relations with issuers and other actors in the primary market.
The group said it would achieve this through dialogue meetings and advocacy activities, aiming to clarify the link to sustainability in future investment products and encourage more players in the primary market to create climate adaptation strategies.
In January, the Net-Zero Asset Owner Alliance finalised the framework for its members’ 2025 portfolio decarbonisation targets, which the investors agree to report against.