AP government funds manage the money that will be our pension.
But AP money must also take into account sustainability and the Paris Agreement, which was particularly emphasized for 1-4 AP funds in a law from 2019. But SVT found just over $16 billion in investments in the world’s 200 largest fossil companies. AP funds invest about 1,500 SEK per Swede in fossil energy, and ownership of AP funds saves carbon dioxide emissions by a full ton per year per Swede.
Coal, oil and gas
The first and second AP funds had only a few hundred million investments in these companies, but decided to sell all the fossil investments.
We chose to de-invest from fossil fuel companies, in order to reduce financial risk, says Christine Magnuson Bernard, CEO of AP Fund One.
The third and fourth funds hold just over SEK 2 billion in fossil companies. At the same time, these have the lowest carbon footprint of the entire portfolio. This is partly because companies in all industries that have higher emissions than competitors have been chosen to a greater extent.
Most of the investments in fossil assets are in AP Fund VII. where five million Swedes have their excellent pension. Here, 11.3 billion Swedish kronor in fossil assets, including British BP, US Occidental Petroleum and Chevron.
But there are also hundreds of millions in Chinese and Indian coal and oil companies. The seventh AP fund has twice the carbon footprint per thousand kronor invested as the lowest AP funds.
It worked well
How does it align with the fund’s goal that the companies it owns must have strategies to achieve the Paris Agreement?
– Some oil companies, especially coal companies, do not own them today, then we will participate as owners, influence and ensure that they get it. If we just sell off all the oil companies, the world won’t get any better. CEO Richard Grötteim says.
The Seventh AP Fund also managed very well. This is also because they have lower management fees than almost all private funds. The fund’s value has increased by 283 percent over the past 10 years. First AP fund increased 225 percent. Average returns for private funds are around 140 percent.