Sweden’s AP1 has decided to divest from all companies with activities in fossil fuels, the fund has announced.
The ongoing transition to a less fossil-dependent economy comes with “great uncertainty for companies operating in coal, oil and gas industries”, and means that investments in these companies may pose a higher financial risk to the fund, the EUR 33.8 billion fund says in a statement today.
Considering the risks
In making the decision, AP1 considered the financial risks that alignment with the goals of the Paris Agreement may mean for AP1 in practice, says AP1 chairman Urban Hansson Brusewitz.
“Our mission is to manage fund assets in an exemplary manner, invest responsibly and achieve high long-term returns whilst promoting sustainable development without sacrificing the fund's return targets,” says Hansson Brusewitz.
New climate regulations, higher taxation and the development of new technology are all possible ways to reduce global carbon emissions, the AP1 statement reads. Households and companies may reduce the demand for products that are linked to high carbon dioxide emissions over time.
Interim targets planned
The decision to divest from fossil fuels is part of the fund’s plan to reduce its overall exposure to climate risks. AP1 has also decided to develop a number of measurable sub-goals to achieve a carbon-neutral portfolio by 2050.
This post originally appeared on AM Watch.
