Stockholm (NordSIP) – On Novemvber 11th, Länsförsäkringar AB announced the exclusion of companies that are active in the exploration and extraction of oil and gas for Länsförsäkringar Liv, Fondliv and Sak. The exclusions were described as the latest step the company’s climate-smart vision of limiting global warming to 1.5˚C by 2030.
On the occasion of this announcement, Sofia Aulin, head of sustainability at Länsförsäkringar Fondförvaltning, noted the importance of reducing global dependence on fossil fuels to limit global warming. She added that few oil and gas companies have begun to restructure their operations in line with the 2015 climate agreement and highlighted the risk of holding stranded assets.
The new exclusion criteria will apply to companies whose turnover from exploration and conventional extraction of oil and gas exceeds 50% and to companies whose turnover from unconventional extraction of oil and gas (e.g.: oil sands, fracking and extraction of gas from coal) exceeds 5%.
Following this new round of exclusions, Länsförsäkringar has shed the stocks of 15 companies from its investment holdings and added over 220 companies to its list of potentially excludable investments. Länsförsäkringar has previously excluded more than 90 companies whose activities are mainly focused on the extraction of fossil fuels and energy production with coal.
Länsförsäkringar Liv started phasing out coal companies as early as 2015 and has since gradually reduced its exposure to fossil fuel companies as a result of the financial and climate-related risks that these companies have, according to Kristofer Dreiman, head of responsible investments in asset management at Länsförsäkringar Liv. Dreiman added that many companies in the energy sector have made a loss or have faced reduced profit margins for a long time, both as a result of price wars but also as a result of reduced demand in connection with the virus outbreak. He also noted that the world index has for a long time developed better than companies in the energy sector.
The exclusion was accompanied by a parallel decision to invest in forest companies based on their positive climate effects and societal impacts, Dreiman added, before explaining that Länsförsäkringar Liv will soon begin to develop criteria for optimising exposure to companies based on how climate-efficient they are in their operations.