Sweden’s Folksam group, which includes the municipal pension fund KPA Pension, announced today it has invested around SEK1bn (€85m) in a new kind of developing-countries social bond issued by the World Bank – whose aims include promoting road safety.
Folksam said World Bank was issuing the first bond of its kind which aimed, among other things, to finance sustainable projects in developing countries with a focus on road safety.
The Swedish pensions and insurance group said it was the sole investor in the bond, which would contribute to supporting projects to increase knowledge to prevent traffic injuries in developing countries, as well as backing projects in emergency medical care and rehabilitation services for care after road accidents.
The Stockholm-based firm said Ylva Wessén, its chief executive officer, had proposed last summer at a high-level UN meeting in New York on global traffic safety that a road safety bond should be devised.
Wessen said: “This is another major step forward as the World Bank enables private capital to invest into road safety-enhancing projects in a way that is beneficial to all parties – partly for projects at a local level which can now receive the necessary funding for increased traffic safety, partly for Folksam which is making a safe and attractive investment on behalf of customers while actually saving many lives.”
The World Bank’s stated mission is to end extreme poverty and promote shared prosperity in a sustainable way.
As a provider of car insurance as well as occupational pensions, Folksam said it was an expert on road safety, having researched the subject for over 50 years and been involved in advances such as seat belt reminders.
Of the SEK1bn investment, SEK464m is being allocated to Folksam’s life and pensions subsidiary Folksam Liv, SEK142m to its general insurance arm Folksam Sak, while SEK384m is an investment for its KPA Tjänstepensionsförsäkring (occupational pension insurance) unit and the remaining SEK10m is for the subsidiary KPA Tjänstepension (occupational pension).
Folksam said traffic accidents were the leading cause of death globally among children and young people, with 1.3 million people dying and 50 million being injured in preventable road accidents, adding that the UN aimed to halve those figures by 2030.
“To reach that goal, the World Bank estimates that around $260bn in funding is needed and that private resources are required in order to get there,” it said, explaining the reason for the international institution’s new bond issue.
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