Insurance Sweden has put the ball in the politicians’ court when it comes to increasing the pension sector’s sustainable investments, publishing a report listing steps legislators and regulators should take to aid companies in investing sustainably.

In its report published yesterday titled: “Responsible and sustainable investments – this is how insurance and occupational pension companies contribute”, the lobby group has highlighted five areas where changes could be made to enable the insurance and occupational pension sector to make a bigger contribution to a sustainable society.

The proposals include the granting of state backing for some green-transition investments, and an exhortation for the Solvency II review to remove obstacles to long-term investment that the organisation said existed in the current rules.

Sara Bergström, economist at Insurance Sweden and author of the report, said: “The financial sector’s investments can only be greener and more sustainable if society as a whole becomes greener and more sustainable.

“Here, politicians and other decision-makers have a great responsibility to pursue a policy that supports such a development,” she said.

Bergström called for an increase in the supply of sustainable investment opportunities, saying business, municipalities and governments all had to take steps to create the type of sustainable conversion projects that were needed.

“From an investor perspective, it may be the case that some projects are too risky for a private investor to put capital into,” she wrote.

“In these cases, it is valuable if the state can go in and remove some of the risk from private investors through some form of state risk sharing,” Bergström said in the report.

Insurance Sweden also said in the report that the EU’s Solvency II review should focus on removing obstacles rather than introducing additional rules, as the capital requirements affected how much risk companies could take in their investments.

The lobby group agreed that financial regulation, such as a high price on carbon dioxide, was an effective measure, but said that financial regulation could not replace direct regulation, and work in this area had to continue.

The report also said the financial industry urgently needed more and better sustainability reporting from business.

“That the reporting becomes more comprehensive, structured and uniform is a prerequisite for insurance companies and other financial market participants to be able to make well-informed decisions, and be able to meet the information requirements now imposed through the EU’s new information rules,” Insurance Sweden said.

It was also important that EU work in this area and global initiatives were compatible, according to the report.

Insurance Sweden counts the country’s largest pension providers, such as Alecta and AMF, as its members, and will shortly become a member of European umbrella lobby group PensionsEurope alongside its existing Insurance Europe membership.

Last month, Insurance and Pensions Denmark, along with InsuranceEurope, criticised the EU’s Solvency II review for the temporary nature of the capital requirement easing it was bringing in.

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