Sweden’s second AP fund (AP2) has published its first combined climate and nature report per the Task Force on Climate-related Financial Disclosures (TCFD) and the Task Force on Nature-related Financial Disclosures (TNFD).

The fund has for the past couple of years published a climate report in accordance with TFCD, while for 2023, the fund expanded the report by reporting on biodiversity in accordance with TFND.

The 2023 report outlines the fund’s short-, medium- and long-term sustainability goals to create a sustainable return on pension investments.

The sustainability policy describes the fund’s approach to sustainability work and defines governance, goals, commitments, integration, and transparency for each focus area.

This is made up of six parts and forms the basis of the action plans in each focus area, with this work being conducted through responsible investments and responsible ownership. These are integration, materiality, analysis, engagement, collaboration, and transparency.

Furthermore, it sets out the fund's nature goals, which include having a portfolio that does not contribute to deforestation by 2025, being nature-positive by 2030, and achieving net-zero greenhouse gas emissions by 2045.

In 2023, AP2 contributed to company dialogues, with 68 per cent of the portfolio companies identified as having high deforestation risk and wealth management. The fund aims to contribute to engagement work with 100 per cent of the portfolio companies identified as having a high deforestation risk and weak management of this risk.

The report also highlighted the need to reduce greenhouse gas emissions by at least 35 per cent by 2025 and by 55 per cent by 2030. The Paris Agreement stipulates that net zero greenhouse gas emissions must be achieved by 2050 at the latest.

The fund sees TNFD and TCFD as a support to identifying their climate and nature risks and opportunities, whilst encouraging transparency through annual and comparable reporting.

AP2, through this report, has evaluated how it can measure the impact of its investments.

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