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Swedish AP Funds to standardise carbon footprint reporting of investment portfolios

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The First, Second, Third, Fourth, Sixth and Seventh Swedish AP Funds, have agreed to standardise the way carbon footprints are reported with all funds now using the same three indicators.

All AP Funds have measured their individual carbon footprints for 2014 and the standardised reporting is aimed at increasing transparency and the funds’ ability to assess their work on climate issues.
 
The first of the three indicators is the absolute carbon footprint for the portfolio of equities, corresponding to the percentage of total emissions (tCO2e) equivalent to the Fund’s equity interest in a company. Secondly, the funds will report carbon intensity, where the absolute carbon footprint is related to the Fund’s equity interest in the company’s market value (tCO2e/MSEK). And finally, Carbon intensity, where the absolute carbon footprint is related to the Fund’s equity interest in the company’s revenue (tCO2e/MSEK)/
 
The AP Funds will also include information on the proportion of capital assets assessed, as well as the amounts based on reported and estimated carbon dioxide emissions data respectively.
 
As long-term owners and managers of Swedish pension assets, the AP Funds have a responsibility to generate maximum possible benefit for the Swedish pension system through responsible investment and management. The Funds are tasked with investing and managing their investments in a sustainable manner.
 
The carbon footprint of an investment portfolio describes the amount of greenhouse gas emissions the companies that the AP Funds invest in emit. Due to differing investment strategies and allocations to different financial assets, the carbon footprints generated by the AP Funds’ investments vary in size.
 
Henceforth, the AP Funds’ carbon footprints will be calculated as per December 31 of the current year, based on the latest available carbon dioxide data for direct emissions (Scope 1) and indirect emissions from purchased energy (Scope 2). The First, Second, Third, Fourth and Seventh AP Funds will calculate and report the carbon footprints for their portfolios of listed equities, based on the size of their equity interest. The Sixth AP Fund will report these indicators for its non-listed portfolio, based on its equity interests.

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