The Folksam Group is increasing the level of sustainability in its SEK 80 billion foreign shares
From the end of March until mid-April, the Folksam Group’s life insurance company, Folksam Liv, and companies within KPA Pension, have more than halved the number of shares in the foreign share portfolios. The carbon footprint of the investments is thereby deemed to be reduced by 20 per cent. The value of the foreign share portfolio amounts to around SEK 80 billion and the number of shares following the change is approximately 500.
“For a few years, we have been increasing the tempo of our efforts to move the operation closer to our vision of having our customers feel secure in a sustainable world. The journey began with very large investments in green bonds and methodical work to reduce the energy consumption in our properties. In parallel with this, we have analysed how to change our investments in the same direction, without sacrificing returns,” says Michael Kjeller, head of Asset Management and Sustainability.
In the new portfolio, the weight of the energy sector has been halved compared to a reference index. This allows us to reduces the climate risk of the portfolio. At the same time, we retain the possibility of influencing the companies towards a green transition through active ownership.
Companies with more than 30 per cent of turnover from coal have already been removed. Now we are also removing energy companies with 10 per cent or more of their returns originating from oil sands. The extraction of oil sands entails great risks as well as large impact on the climate and the environment.
“The change we have made to the investments is forceful, but we still only consider it a first step. We now have an excellent platform to further increase our advocacy efforts, while our work with preparing for the change has given us knowledge that will be highly useful in the future. We have the ability as well as the will to take further steps to contribute to a more sustainable world,” says Michael Kjeller.
The portfolio changes were implemented from the end of March until mid-April.
Footnote. Folksam Sak’s assets were already being invested in accordance with the criteria for green investments.