KPA Pension, which manages pensions for local authorities, said action needs to be taken to improve the framework for pension funds to invest in climate change preparedness in Sweden, arguing that most scheme members favour their savings being invested in that way.
The SEK300bn (€26bn) pension fund, a subsidiary of pensions and insurance group Folksam, published a report on Friday on Sweden’s need to undergo the green climate transition, adapt society to a changing climate and to build civil preparedness — including recommendations for action.
KPA Pension said pension money could contribute to strengthening the Swedish civil preparedness system, for example, by investing in energy supply, water supply and communication.
Camilla Larsson, KPA Pension’s chief executive officer, said: “Investments in climate change adaptation and better civil preparedness benefit our customers and are good examples of how we create returns for our customers while their occupational pensions contribute to a more sustainable and robust society.”
The pension fund said an opinion poll it carried out in November 2024 showed that six out of 10 Swedes were ready to see their pension money invested in civil preparedness, with the most positive respondents having been residents of the Stockholm area.
Marcus Svedberg, chief economist at the Folksam Group, said: “Pension capital is already an active source of financing for the climate transition, and KPA Pension has invested in municipalities that are implementing climate adaptation measures.
“Preparedness investments have a long-term perspective that suits the management of occupational pensions,” he said.
According to the report, several thousand billion kronor would be needed to bolster supply chains, reduce the climate footprint and adapt Swedish society to the climate.
The pension fund said pension capital in Sweden amounted to approximately SEK8.1trn, with the majority invested abroad, although a large proportion was invested domestically, which made pension capital an important element of the Swedish financial market.
Among the report’s recommendations, KPA Pension said a concrete overall list of investment needs and potential financing sources around climate preparedness was needed, and that decision-makers should discuss the most obvious areas for co-financing with the Swedish pensions sector.
Based on those discussions, the pension fund said there would probably be a need for legislative changes.
“It is time to step up and let pension capital participate and contribute to making Sweden more competitive, climate-smart and resilient,” KPA Pension said in the report.
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