Alecta’s interim targets on the pathway to net-zero
Last week, Alecta, Sweden’s largest pension provider with 1100 bn SEK in AUM, released its second climate report in accordance with the TCFD recommendations. The report includes the first interim targets that are part of the commitment made as member of the Net-Zero Asset Owner Alliance.
Alecta is one of the founding members of the UN-convened Net-Zero Asset Owner Alliance (AOA), and has also been part of developing the Target Setting Protocol. It is based on the latest international climate research and is currently one of the most ambitious climate guidelines for investors. Ultimately, the objective of the initiative is to achieve change in the real economy, and each member is to set their own targets with regard to engagements and sub-portfolio carbon footprint reductions based on the IPCC’s 1.5 degrees scenarios.
In the first phase of the Target Setting Protocol, members of the AOA will adopt reduction targets for 2025 that cover the asset classes listed equity, corporate bonds and directly owned real estate.
- We have very concentrated portfolios, mainly based on our own fundamental analysis. Our equity portfolio, as an example, only consists of around 120 companies. This means that we know what we invest in, and can use our ownership to engage, follow-up and support the companies we invest in to transition to a low-carbon economy, says Peter Lööw, Head of responsible investment at Alecta.
Alecta’s interim goals in accordance with the AOA protocol for 2025 are:
- Focused climate related dialogues with 20 companies in accordance with the AOA’s engagement strategy
Emission reduction targets:
- Listed equity: 25 % tons CO2 (scope 1+2) per million SEK in revenue
- Corporate bonds: 25 % tons CO2 (scope 1+2) per million SEK in revenue
- Directly owned real estate: 50 % kg CO2 (scope 1+2) per square mete
- Transparency regarding green investments
- Participate in 4 round tables and initiate dialogue with 2 DFI’s (Development Finance Institutions)
Alecta’s portfolio - current status and going forward
Due to the long-term nature of Alecta’s investments it is essential to understand the value chain emissions for each holding, and foremost the opportunities and challenges that the business model in itself presents when it comes to transition.This translates into consideration of aspects such as innovation, procurement, consumer behavior and regulation. An ambitious climate target can serve to indicate a company’s direction
Not all companies in Alecta’s equity portfolio have set climate targets, and sometimes targets are too vague or simply insufficient. Alecta has a process for identifying portfolio companies that are relevant for more focused climate engagement.
- Many of the companies we invest in have an ambitious approach to climate. For example, 77 percent of the companies we invest in report scope 1 and 2 emissions, and the share of companies that have approved Science-Based Targets is 17 percent. In addition a further 11 percent of the companies has committed to setting a Science-Based Target. However, there is room for improvement. Our ambition is to support our holdings in their transition. Leading up to 2025, this involves having dialogues with those companies in our portfolio that have not yet set climate targets, to follow up with those who do have targets, and an overall focus on enhancing the quality of data and reporting from all companies, says Peter Lööw.
The interim targets serve as a basis for evaluation of each investment. It gives the portfolio managers and the analysts a context to whether companies are on track for 2025 and will be used as a point of reference in dialogues with the specific companies.
Results from the climate report
- Since 2016, the carbon footprint intensity of the equity portfolio has decreased from 4,7 CO2e /million in revenue to 2,8 CO2e /million in revenue. Considerably below the intensity level of Alecta’s ESG-tilted benchmark.
- In 2020, Alecta engaged in 44 ESG dialogues, up from 18 in 2018. Climate has been the dominant topic.
- By end of 2020, Alecta’s portfolio included more than 50 billion SEK in green bonds, up from 31 in 2018, and more than 14 billion SEK in other clearly sustainability related assets, such as social or impact bonds.
- In the Swedish real estate portfolio, Alecta doubled the number of environmentally certified properties between 2018 and 2020, and cut the carbon footprint generated from energy procured for our properties with 50 percent.
For further information, read our TCFD report: alecta-klimatredovisning-2020.pdf (in Swedish)
Hannes Hultcrantz, PR-Director
+46 733 10 06 01
Peter Lööw, Head of Sustainable Investments
+46 706 19 90 79
Hannes HultcrantzPR-ansvarigTel:+46 733 10 06 email@example.com
Alecta manages collectively agreed occupational pensions. Since 1917, our mission has been to provide the best possible occupational pensions for our corporate and private customers. We focus on high returns, great customer service and low costs. We manage approximately 1100 billion SEK for our owners – 2,6 million private clients, and 35 000 corporate clients.
Subscribe to releases from Alecta
Subscribe to all the latest releases from Alecta by registering your e-mail address below. You can unsubscribe at any time.
Latest releases from Alecta
Korrigerat: Alectas kvartalssiffror för tredje kvartalet 202120.10.2021 08:00:00 CEST | Pressmeddelande
Kvartalssiffror för tredje kvartalet 2021. Siffror inom parentes avser nyckeltal per 30 september 2020. Tidigare version från kl 08.00 den 20 oktober innehöll två felaktiga siffror för avkastningen inom den förmånsbestämda försäkring som nu är korrigerade.
Alecta blir tjänstepensionsbolag 202215.10.2021 08:18:47 CEST | Pressmeddelande
Finansinspektionen godkände den 14 oktober 2021 Alectas ansökan om att bli ett tjänstepensionsföretag i enlighet med lagen (2019:742) om tjänstepensionsföretag. Omvandlingen sker den 1 januari 2022. Då byter också Alecta pensionsförsäkring, ömsesidigt namn till Alecta Tjänstepension Ömsesidigt.
Alecta publishes Responsible Ownership Report for season 2020/20218.10.2021 08:30:00 CEST | Press release
On Thursday October 7th Alecta gathered representatives from their Swedish holding companies to present its Responsible Ownership Report for 2020/2021. The report is downloadable in its entirety on Alecta.se.
Fortsatt stabila finanser för Alecta efter starkt positiv avkastning och hög kostnadseffektivitet16.7.2021 08:00:00 CEST | Pressmeddelande
Alectas finansiella rapport första halvåret 2021. Siffror inom parentes avser nyckeltal per 30 juni 2020.
Alecta köper 50 procent av Stockholm Exergi tillsammans med investerargrupp1.7.2021 11:00:00 CEST | Pressmeddelande
Fortum säljer 50 procent av sitt ägande i Stockholm Exergi till en grupp av europeiska investerare som har fokus på långsiktighet och hållbarhet. Gruppen består av APG (Nederländerna), Alecta, PGGM (Nederländerna), Keva (Finland) och AXA (Frankrike). Alectas andel utgör 15 procent av gruppens ägande.
A Consortium led by APG has agreed to acquire a co-controlling stake in Stockholm Exergi from Fortum30.6.2021 19:48:59 CEST | Press release
Helsinki, 30 June 2021 – Fortum has agreed to sell its 50% holding in Stockholm Exergi Holding AB (the “Company” or “Stockholm Exergi”) to a group of long-term European institutional investors with a strong commitment to the infrastructure sector comprising APG, PGGM, Alecta, Keva and AXA IM Alts (together, the “Consortium”).
In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.Visit our pressroom