Sovereign wealth fund of the year: AP4
Sweden's AP4 further bolstered its 'quantitative low-carbon strategies' in 2021 – reducing its carbon emissions by a further 23% relative to the previous year.
Since 2010, the carbon emissions from the fund's investments have been reduced by 60%, it says.
In 2021, AP4 among other areas addressed its emerging markets exposure and, together with the fund's external managers, implemented a strategy that significantly reduced the carbon emissions.
AP4 further developed the fundamental bottom-up stock selection approach in resource intensive sectors. The strategy and the team were initiated in 2021 and that year AP4 addressed the energy sector. In 2022 this work addressed the utilities and materials sectors.
The fund's managers aim to invest in companies in the sectors that are deemed to have targets and strategies in line with a transition in line with the Paris Agreement.
Its target is to halve the carbon footprint from the 2020 level by 2030, with a view to have net-zero emissions by 2040 at the latest. Its historical reduction of the carbon footprint and its targets "are more ambitious than those set out in the Paris Agreement," it claims.
AP4 manages part of Sweden's public pension capital. It is one of five 'buffer funds' in the Swedish public pension system.
Everyone who has worked and paid taxes in Sweden is entitled to a national public pension. Any surplus from the contributions paid in during the year from the actively working population, and those paid out to pensioners, is transferred to the buffer funds and invested.
It managed assets at year-end 2021 of about approximately SEK 527 billion ($52 billion), with listed shares, both global and Swedish, constituting more than half of the assets. It also invests in Swedish and global fixed income investments as well as real assets.