Stockholm (NordSIP) – AP4, the Fourth Swedish National Pension Fund, is looking to integrate ESG even further into its investment strategy, CEO Niklas Ekvall reveals in a wide-ranging interview with Top1000funds.com, in which he also describes plans to further refine and develop the fund’s investment processes and portfolio.
Mr Ekvall, who joined the SEK334 billion ($37.8 billion) fund last October, believes current investment strategy must better connect with AP4 liabilities, despite the fund’s already strong record in domestic equity allocation and ESG integration. To this end, the fund intends to extend its sustainability reach even further, by looking to integrate themes such as water scarcity and resource efficiency into its investment strategy and reviewing how to increase the amount of global equity in low-carbon strategies from the current level of 24% of the allocation.
“We want to increase our low-carbon strategies and are currently developing ways to put more pressure on, and incentivise, companies to de-carbonise further,” Mr Ekvall told the publication, adding the AP4 is also going to increase efforts to make sure all investment decisions take enough consideration of the risk/return impact of climate change.
AP4 was awarded an ‘AAA’ rating last month in the Asset Owners Disclosure Project (AODP) Global Climate 500 Index, coming eighth out of 500 institutional investors. AODP is an independent, global non-profit organization that recognizes the specific financial risk attributes of climate change. The world’s 500 biggest asset owners are ranked each year based on their success at managing climate risk within their portfolios. Asset owners are scored in the categories of Engagement, Risk Management and Low-Carbon Investment.
AP4 was thereby just one of 17 investors assigned an AAA rating and the Swedish investor ranking highest on the list – like the previous year.
Read the full interview here.