Three of Sweden’s pensions and insurance groups, Alecta, Folksam and Länsförsäkringar, announced they have invested SEK2bn (€181m), SEK700m and SEK300m respectively into social bonds issued to support companies hit by the COVID-19 crisis.
The debt was issued by the International Finance Corporation (IFC), the private sector arm of the World Bank Group which focuses on emerging markets.
Kristofer Dreiman, head of responsible investments at Länsförsäkringar, said: “The purpose of the bond is to support the work on managing the health and economic effects that result from the global outbreak caused by the coronavirus.”
He said that in the long term, private capital could complement public money and help secure jobs and reduce the health and economic effects of the virus outbreak.
Länsförsäkringar said the bond issue was for a total of SEK3bn, and formed part of a commitment made by World Bank at the beginning of March to allocate up to $12bn to support both countries and the private sector amid the expanding coronavirus epidemic.
Folksam said firms in strategic sectors — such as medical equipment and pharmaceuticals — would be given direct support from the bond’s proceeds to ensure that supply chains could be maintained.
Ylva Wessén, Folksam group chief executive, said: “We are pleased to take part in the fight against the negative effects of COVID-19 and create security for companies and their employees through an investment.”
Länsförsäkringar said the investment contributed to the third of the UN’s sustainable development goals - that of good health and well-being - which was one of the group’s priority goals.
Meanwhile, Tony Persson, group head of the fixed-interest and strategy group at Alecta, said that through its investment in the bonds, the pension provider was helping both to counteract the negative effects of COVID-19 and to create security for companies and their employees.
“This type of investment in social bonds benefits both communities and our customers in the long term,” he said.