Stockholm (NordSIP) – Asset Owners Disclosure Project (AODP) has ranked Swedish state pension fund AP4 first in its 2018 survey of 100 global pension funds and their approach to climate-related risks and opportunities.
The Pensions in a Changing Climate report is the first of a four-part series to be released throughout the year, and assesses the global pension sector’s response to the recommendations of the Task Force on Climate-related Financial Disclosures (TFCD). The performance of pension funds at the individual, national and regional levels is evaluated in consideration of the influence of climate policy debate and action on geographic performance.
The next three parts, to be released up through November 2018, will cover specific areas from the survey and follow the structure of the TFCD core recommendations: Governance & Communications, Strategy & Risk Management, and Metrics & Targets.
AP4’s #1 finish follows a ranking of #3 in 2017 and #9 in 2016, reflecting continued progress on behalf of the pension fund on meeting TFCD recommendations. It was one of just two pension funds awarded the AAA rating, although the other Swedish AP funds also ranked highly in the analysis.
“We are very pleased to have been awarded the highest rating in AODP’s ranking. This shows that our work in sustainability makes a difference,” said AP4 CEO Niklas Ekvall. “We are also pleased that the other AP funds are successful in the ranking, thus illustrating that the AP funds are in the forefront in terms of handling the climate issue.”
AP3 was ranked #8 (A rating), AP7 was ranked #14 (BBB rating), AP2 was ranked #15 (BBB) and AP1 was ranked #23 (BB rating). The AODP report also showed that over 60 per cent of the world’s largest pension funds have little or no strategy on climate change.
“AP4 has identified climate change as one of the largest systematic risks for long-term asset values. Reducing climate change is [the] prerequisite for stable economic growth in the future, and thus for AP4’s stability to achieve its mission over time. We hope that our work with sustainability will affect the development that we, together with other investors, can contribute to a solution [to] the global climate challenge,” Ekvall added.