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Pension fund CEO: One of the biggest risks in a long-term investor's portfolio is carbon

Mats Andersson's picture
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Mats Andersson, CEO of Swedish pension fund AP4, spoke at the World Bank Group about the importance of transparency for investors and the impact of a carbon price in shifting investment to cleaner, more sustainable development.


"I think it's essential. If you want to be serious about fighting climate change, there is no way out without putting a price on carbon.

I strongly believe you need to have a top-down approach on this. At the same time, I think it's important to stress that we should do whatever you can do from your own platform, which we've been doing at AP4 since three years back in trying to decarbonize our portfolio. There is no conflict. At the end of the day, if you use resources, you need to pay for it. It's as simple as that.

Our mission would be to actually push companies. If we are long-term investors, we need to fund companies that put sustainability high on the agenda. You cannot be long-term successful unless you really have sustainability high on the agenda.

Therefore, we start asking companies, how do you address this? And they have to report back to us. It's a gradual movement. We see already today many companies actually take this very seriously and putting it into any investment case they have.

We have and I have the belief that climate change is for real. I think one of the biggest risks we have in our portfolio is carbon. And to address this, we are finding companies or indices where we take out the worst polluters and allocate money to the good, more carbon-efficient companies. And by doing that we actually are lowering the risk and then we don't have to give up returns." 

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