SWE Firms Fall Short on Pension Sustainability Requirements, Study Finds

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Stockholm (NordSIP) – A new study conducted by Swedish insurance and pensions company SPP has found that Swedish companies largely don’t impose sustainability requirements on their pension contracts and capital investments. Requirements for sustainable asset management are still glaringly absent, according to an SPP press release, despite Sweden’s new climate law, increased sustainability reporting requirements and the UN SDGs.

The report is the third consecutive annual survey conducted by SPP on sustainability requirements for pension procurements. Of 29 companies listed on the OMXS30 as sustainable, sustainability requirements are not mentioned in pension contracts and capital investments.

“Swedish companies generally have a good idea of sustainability when it comes to production, procurement and valuations. But when it comes to retirement procurement, sustainability is still a blind spot, although pensions are often the company’s largest personnel cost after wages,” according to SPP CEO Staffan Hansén.

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SPP’s comparative research to 2017 suggests state-owned companies may be even worse than the business sector at posting sustainability requirements. The majority of them relied on the fact that sustainability requirements are set in the collectively agreed occupational pension scheme, but a knowledge gap has been revealed there as well as for private companies.

“Often, capital is invested instead in a direction that goes straight to the global development goals agreed by world leaders and industry. In order to reverse developments, pension contracts must also be subject to requirements and guidelines in accordance with the goals, Hansén explained.

Reports from Pensionsmyndigheten [the Pension Authority] show that sustainability-labelled funds perform better than others, with shifting political winds providing good value in investing, Hansén underlined, suggesting that investing sustainably is simply better business.

“Half of the capital on world stock exchanges is pension capital – imagine what potential it has for the transition to a more sustainable society. Even for pension capital, it is possible to calculate a fossil footprint, which is something businesses can report directly. As employers increasingly choose employers by value, the companies that succeed in raising this value also have a competitive edge,” Hansén added.

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