Picture courtesy of Fondbolagens förening
Stockholm (NordSIP) – Fondbolagens Förening, the Swedish Board of the Fund Companies Association, announced the adoption of a new industry-wide guide to accounting for carbon dioxide emissions from fund investments.
The guidance is informed by recommendations from the Task Force for Climate-related Financial Disclosures (TCFD) and also covers the reporting of carbon emissions for fixed income and mixed funds. The TCFD framework has, in a short time, become what most climate change initiatives, reporting frameworks and the European Commission have supported and applied.
The present guidelines offer an update to the recommendations first published in 2016 to take into account several recent developments in this field. Asides from the TCFD recommendations, Fondbolagens förening’s new guidelines also take into account the EU’s Non-Financial Reporting Directive, the Swedish Annual Accounts Act, several new investor-led climate initiatives and the European Commission’s action plan on sustainable finance.
In practice, the changes mean that the calculation formula itself in the guidance is adjusted to show the fund portfolio’s exposure to carbon-intensive companies, instead of the fund’s ownership interest in companies with high carbon dioxide intensity. Previously, the calculations were used only for equity funds, but now it will be possible to calculate and report carbon footprints also for fixed income and mixed funds.
“We see that sustainability issues are becoming increasingly important for savers. In the fund industry, a great deal of work is being done to develop sustainable products and meet that demand,” Fredrik Nordström, CEO of Fondbolagens förening said. “It is also important that the funds can inform as best as possible about the sustainability work. The industry strives for increased transparency and comparability, and we have now taken another step in the development of our guidelines where we, among other things, adapt to TCDF’s international framework.”
“It is very positive that more and more companies are reporting climate data, but I would like to flag that there are still limitations in data access, which makes it difficult for the funds’ calculations and in the interpretation of the key figures. The goal is that in the long term we will get an even better picture of the companies’ climate footprint, and not least forward-looking information on how different companies intend to meet the climate challenges,” the CEO added.
