March 16, 2020 / 4:17 PM / 17 days ago

Swedish pension fund joins move to end fossil fuel investments

STOCKHOLM, March 16 (Reuters) - One of Sweden’s national pension funds said it will stop holding investments in fossil fuel firms, joining a strategic shift among global money managers to comply with the United Nations Paris Agreement on climate change.

Western funds are reducing their exposure to industries and companies which are responsible for emissions of carbon dioxide, one of the main greenhouse gases causing global warming.

“Divesting from fossil fuels is an efficient way for the fund to manage the financial risk associated with a transition in line with the Paris agreement,” Urban Hansson Brusewitz, chairman of the Swedish fund AP1, said in a statement on Monday.

One of five national pension funds in Sweden, AP1 is the first of them to commit to divesting all holdings in fossil fuel companies, Sara Christensen, a spokeswoman for AP1 told Reuters.

AP1 has total assets under management of 365.8 billion Swedish crowns ($37.4 billion) between equities, interest-bearing securities, real estate, infrastructure, venture capital funds and hedge funds, the fund’s website says.

By the end of 2019, AP1 said it held assets worth 4.5 billion Swedish crowns in fossil fuel companies.

“We have sold the larger part of these holdings, but there is still some investment remaining ... the ambition is to have all of it sold by the end of this year,” Christensen added.

“The transition to a low-carbon economy, less dependent on fossil fuels, represents a substantial uncertainty for companies engaged in coal, oil and natural gas,” Brusewitz said.

The fund, which said it will develop a plan to achieve a “carbon neutral portfolio” by 2050, will “promote investments in companies that are actively contributing to the transition and will be part of a profitable and sustainable economy over the long-term,” Brusewitz added. ($1 = 9.7856 Swedish crowns) (Reporting by Colm Fulton; Editing by Johan Ahlander and Alexander Smith)

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