Stockholm (NordSIP) – Swedish consultancy Söderberg & Partners has been reviewing the sustainability performance of the country’s largest pension funds annually for ten years now. The goal is to help savers choose the most sustainable alternative. Thirteen Swedish pension companies are rated according to three factors: sustainable investing process, engagement, and sustainable ambition and value creation.
The latest edition of the report, Hållbara Pensionsbolag (Sustainable Pension Companies), is out now, and it is time to look at the results. Although there have been no changes to the overall ratings, the companies’ sub-ratings have shifted somewhat. “This is a direct result of improvements and fine-tuning of our rating model,” comments Söderberg & Partners. “We have made these changes in order to better reflect the rapid developments in the field of sustainability and to ensure that our model continues to be relevant and accurate.”
For the fourth year in a row, no less than three Länsförsäkringar products receive a ‘green light’ overall for their sustainability work – Länsförsäkringar Gamla, Länsförsäkringar Nya, and Länsförsäkringar GF. Three more pension companies, Nordea, Skandia and SPP, get to keep their places at the top. Meanwhile, Alecta and SEB Gamla continued to be red-lighted in 2023.
Digging into the details, we find the main driver for the high overall ranking of the leaders to be their superior sustainable investing processes. Skandia’s double materiality assessment model ‘WHAT/HOW’ seems to have impressed the analysts at Söderberg & Partners, as have Nordea’s proprietary rating models to evaluate external managers and countries’ sustainability. In addition, both Skandia and Nordea continue to increase their exposure to green and social bonds.
Länsförsäkringar, meanwhile, gets commended for its “comprehensive sustainability analysis of holdings and portfolios through several external analysis sources” as well as for carrying out site visits to verify the use of proceeds of their sustainable bonds.
Leading the pack in engagement practices are Skanida, SPP, Handelsbanken, and Swedbank. “Handelsbanken has a clear definition of an advocacy dialogue, with well-defined guidelines for when the dialogue should be concluded, and holdings should be divested,” reads the motivation. In the case of Skandia, the analysts see a clear improvement after the company has reviewed its advocacy strategy, strengthened the link between analysis and engagement and refined the decision-making model used to prioritise advocacy activities.
Swedbank gets plus points for conducting proactive engagement dialogues, both stand-alone and as a part of different initiatives. As for SPP, the company receives a high score for its exemplary documentation of the engagement process and results.
Nordea, SPP and Skandia also stand out for their sustainable ambition and value creation. The sheer number of specialists dedicated to sustainability is one of the criteria the analysts pay attention to. In addition to boosting internal resources, Nordea scores extra points for collaborating and sharing expertise within and outside the organisation. Meanwhile, SPP and Skandia both get credit for their educational efforts that help spread knowledge on sustainability more broadly. A clear communication strategy is another aspect that distinguishes the winners.
“In this year’s analysis, we see that pension companies continue to hire more people for their sustainability teams,” conclude the analysts. “The companies continue to improve their scenario analyses by integrating more asset classes and sustainability risks. Since last years, several pension companies have also introduced a sustainability week or day, focusing on increasing knowledge about the link between everyday decisions and sustainability.”
