Alecta Pensionsforsakring, Stockholm, set an interim 2025 target on its path to achieve net-zero carbon emissions in its equity, bond and real estate portfolios by 2050, a spokesman confirmed.
As part of the effort Alecta, which has 1.1 trillion Swedish kronor ($129.4 billion) in assets, plans to engage with 20 companies and cut 25% of carbon dioxide emissions per million Swedish kronor of its portfolio companies' revenues.
Alecta plans to cut both direct and indirect emissions of companies in its portfolio. It also plans to reduce 50% of carbon dioxide per square meter in its directly owned real estate.
Alecta plans to assess annually if any divestments will be required, the spokesman confirmed.
"We have very concentrated portfolios, mainly based on our own fundamental analysis. Our equity portfolio, as an example, only consists of around 120 companies. This means that we know what we invest in, and can use our ownership to engage, follow up and support the companies we invest in to transition to a low-carbon economy," Peter Loow, head of responsible investment at Alecta, said in a news release Wednesday.
Alecta will also identify and engage with portfolio companies with insufficient carbon data reporting. Over 70% of Alecta's portfolio companies report their indirect and direct emissions but only 11% of the companies commit to science-based targets.
Mr. Loow added that Alecta will focus on companies in its portfolio that have not yet set climate targets and seek to enhance reporting by companies that did improve.
In its latest climate report, Alecta also said that it increased the number of companies it engaged with over climate issues to 44 in 2020 from 18 in 2018.
Alecta also had 50 billion Swedish kronor in green bonds in 2020, up from 31 billion kronor in 2018.
Alecta invests 47.6% of its assets in debt, 40.4% in equities and 12% in real estate.