In 2024, the Swedish pension fund AP4 sought to enhance its portfolio resilience and climate alignment through various upgrades to its approach and analysis.

It undertook a quantitative scenario analysis, based on Network for Greening the Financial System (NGFS) climate pathways, which showed AP4 outperforming benchmarks on Scope 1 and 2 emissions, fossil fuel exposure, and Paris Agreement alignment.

In the analysis, AP4 assessed the impact of physical and transition risks on the existing equities and fixed income portfolio.

AP4's investment strategy is guided by its proprietary AP4 Alignment Score, which evaluates a company's climate transition preparedness and informs AP4's divestment and portfolio optimisation strategies.

In 2024, AP4 added Scope 3 emissions to its Alignment Score. This is an important step because Scope 3 emissions often account for a large proportion of a company's emissions and are a vital consideration for fully understanding a company's risk.