AP7 awards three mandates worth SEK230bn to passive equity managers

Swedish state-owned pension fund AP7 has awarded three mandates worth an estimated SEK230bn (€24.96bn) to passive equity managers.

AP7 intends to shortly sign an agreement with BlackRock Investment Management (UK), State Street Global Advisers and Northern Trust Global Investments.

“The basis for the decision is that the three bidders have submitted the most advantageous lenders taking account of the contract documents specified evaluation," it said.

The contracts will last for three years.

AP7 has been heavily involved in the issue of climate change and carbon footprint reporting recently.

The fund along with AP1,AP2,AP3,AP4,AP6 have all agreed to coordinate the way in which their carbon footprints are reported in order to boost transparency and allow them to assess their work on climate issues.

The funds will report on their carbon footprints using three principal indicators. This includes the absolute carbon footprint for the portfolio of equities corresponding to the percentage of total emissions equivalent to the fund’s equity interest in a company.

Furthermore, the funds will report using carbon intensity as an indicator, where the absolute carbon footprint is related to the fund’s equity interest in the company’s market value and in the company’s revenue. The carbon footprints will be calculated as per 31 December of the current year.

In a joint statement the funds said “as long-term owners and managers of Swedish pension assets, the AP funds have a responsibility to generate maximum possible benefit for the Swedish pension system through responsible investment and management”.

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