AP2 Aligns Portfolio with Paris Agreement

    Stockholm (NordSIP) – According to AP2’s annual sustainability report, the Swedish public pension system buffer fund developed a multi-factor index for global equities and corporate bonds in line with the EU Paris-Aligned Benchmark (PAB) during 2020. This alignment implies that the carbon footprint from the portfolios of global equities and corporate bonds has been reduced by about 70% compared with market-weighted indices.

    AP2’s decision is motivated by the October 2018 UN Intergovernmental Panel on Climate Change (IPCC) special report, which argues that to limit warming to 1.5°C requires a 40%-60% CO2 emissions cut by 2030 vis-à-vis 2010, and net-zero emissions by 2050.

    “I am very proud that we adapted our internally managed holdings of global equities and corporate bonds during the autumn to bring them in line with the EU Paris-Aligned Benchmark, without compromising the return and risk characteristics of the portfolios. This alignment of the portfolio is, to our knowledge, unique in that it includes holdings of both corporate bonds and equities,” says Eva Halvarsson, CEO of AP2.

    According to the annual sustainability report, “the Second AP Fund has for a long time worked to integrate sustainability into management, including a focus on climate change, which plays a central role in sustainable development and also in the future economic development and return on financial assets. During the year, the fund took a major step towards a carbon-neutral world by 2050 by internally developing and implementing a multi-factor index for global equities and corporate bonds, which is in accordance with the criteria for the EU Paris-Aligned Benchmark”

    AP2 manages SEK 386.2 billion (31 December 2020) in virtually all asset classes and worldwide.

    Image by NordSIP

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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