AP2, Gothenburg, Sweden, has divested about 8 billion Swedish kronor ($940 million) in overseas equities and corporate bonds as part of work to align its internal portfolios with a goal of the Paris Agreement.
The 357.9 billion kronor pension fund said Thursday it had aligned its internal indexes and portfolios for the two asset classes to meet the Paris Agreement's goal to limit global temperature rises to 1.5 degrees Celsius.
Assets have already been divested, a spokeswoman confirmed. "We reinvest evenly over other sectors in which we are invested."
The fund divested from companies that generate revenue from fossil fuels to adjust its internally managed global equities and corporate bonds allocations to be consistent with the Paris-Aligned Benchmark, a news release said.
The move is, as far as AP2 is aware, unique since it covers equities and corporate bonds worth about 200 billion kronor — half of the fund's total portfolio. "Our ambition is eventually to align other parts of our portfolio with the PAB too," Eva Halvarsson, CEO of AP2, said in the release.
AP2 will no longer invest in companies that generate more than 1% of turnover from coal, more than 10% from oil and more than 50% from gas. This, in principle, excludes the entire energy sector, the release said.
The fund also will not invest in utility firms for which more than 50% of revenues are derived from fossil fuels.
In total, about 250 companies were excluded from the portfolio.
"Actually, we are moving beyond the PAB requirement for halving the carbon footprint in the first year because we are already reducing the carbon footprint of our global corporate bonds by about 75% and that of our global equities by about 70%, and we aim to reach net zero emissions by 2045," Ms. Halvarsson added.
AP2 executives aim to be net-zero in the overall portfolio by 2045.