Traditional scheme’s equities emit less carbon than competitors, ​Alecta says

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Sweden’s Alecta said today that its traditional occupational pension product has a lower carbon footprint from equities than any of its main competitors, based on recent research it carried out on scope 1 and scope 2 figures from providers’ reports at the end of 2020.

The pension fund, Sweden’s largest, said its figures also showed that an average pension pot for a 40-year-old accounted for a footprint of more than a tonne of CO₂e per year, compared with the consumption-based greenhouse gas emissions for the Swedish population of about nine tonnes of CO₂e per person per year.

Commenting on the differences it had found in the carbon footprints from equities between Swedish occupational pension managers’ traditional pension insurance products, Alecta said the variations were large, and there was often a “difference of several hundred percent.”

Peter Lööw, head of sustainability at Alecta Asset Management, said: “That Alecta can have such a low carbon footprint today is due to the fact that we have long carefully chosen which companies we want to invest our customers’ money in.”

He added that the firm believed in a limited index, with stakes in just over a hundred companies, and said that in order for it to become a long-term investor, a company should have either a low carbon footprint, or a credible climate action plan.

Alecta said it had been working to improve its scope three emissions reporting, adding that its own comparisons were based on scope one and two emissions from pension providers AMF, Folksam, KPA Pension, LänsföRSäkringar, Skandia, SEB and SPP.

The firm said reporting standards needed to improve, adding that it included scope 3 emissions in its own investment analysis and climate risk assessment, but that many companies did not report these figures, which it said made comparisons weak.

Last week, Alecta was slapped with a red light rating – the lowest of three traffic light categories – in consultancy Söderberg & Partners’ annual sustainability report, falling from its amber rating in last year’s report.

Alecta’s head of governance and sustainability, Carina Silberg, responded by saying her firm was disappointed by the rating, but did not recognise the assessment’s description given its investment strategy and ESG integration.