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Initial Target Disclosure: March 2022

Portfolio level

Portfolio level – Portfolio decarbonisation reference target

Baseline date: 31 December 2019

Baseline performance:

  • Listed equity and corporate bond portfolio: 4.4 mtCO2e (Scope 1 and 2)
  • Swedish real estate emissions: 1,146 tCO2e (Scope 1 and 2)

Target year(s): 2025, 2030, 2045


  • Net zero by 2045
  • Listed equities and bonds: 65% reduction of CO2e emissions by 2025
  • Swedish real estate investments: net zero by 2030

GHG scopes included: Scope 1, 2 included. Scope 3 to be included over time in accordance with the PAB framework for all sectors.

Asset classes in scope:

  • Global equities and corporate bonds
  • Swedish real estate (amounting to about a third of the Fund’s total traditional real estate assets)

Methodology/ net zero scenarios: The Fund developed indices for global equities and corporate bonds in accordance with the EU Paris-Aligned Benchmark (PAB) criteria, which are based on the UN Intergovernmental Panel on Climate Change’s 1.5°C scenario with limited overshoot. See more on methodology below.

Portfolio level – Investment in climate solutions target

Qualitative goal: Investments in solutions are expected to increase as a part of an overall impact portfolio with measurable contribution to SDGs, including SDG 7 and 13. However, AP2 has not set a quantified target for the amount to be invested.

Baseline date: 2020

Baseline performance: SEK22bn (5.8% of AUM)

Methodology: AP2 has defined criteria for investments to be included in the Fund’s impact portfolio. Impact is evaluated based on the five dimensions of the Impact Management Project framework. Measurability is assessed with IRIS+ aligned KPIs (e g for SDG 7, renewable energy generated for sale; and for SDG 13, Greenhouse Gas Emissions Avoided or Reduced) and the investments are evaluated based on materiality and additionality. The Impact portfolio is expected to grow over time, but no quantitative target has been set. By December 2021, AP2’s impact investments according to these criteria amounted to SEK28bn SEK or 6.3% of AUM.

The Fund’s impact portfolio has a clear overweight on climate-related SDGs, including:

  • Green bonds
  • Sustainable infrastructure (which includes investment into renewable energy funds and EV battery development through Northvolt)
  • Impact PE funds, including TPG Rise
  • Forest investments that fulfil AP2: s 10 criteria for climate and biodiversity
  • Swedish listed cleantech portfolio
  • Impact measures that will be tracked over time include MWh of renewable energy and CO2e in avoided emissions.

Asset level

Asset level – Portfolio coverage target

Baseline date: 31 December 2020

Baseline performance: 50% meeting at least “aligning” criteria, consisting of Global equities, listed bonds, and Swedish Real Estate

Target year(s): 2025

Target: 100%

Asset classes in scope: All asset classes, including:

  • Equities
  • Fixed income
  • Tactical asset allocation
  • Real estate
  • Private equity
  • Private Debt
  • Sustainable infrastructure
  • Alternative risk premiums

Methodology/ data sources:

Global equities and listed bonds, which are managed in line with PAB.
Swedish Real Estate, the only holding of which (Vasakronan) is committed to value chain climate neutrality by 2030, with a plan approved by Science Based Targets.

Asset level – Engagement threshold target

To be defined.

Additional information

Methodology: The emissions reduction strategy detailed to date is in line with or inspired by the Paris-Aligned Benchmark requirements and Science Based Targets. The footprint must be reduced by 7 per cent per year, with the aim of achieving net zero emissions by 2050. Further, according to the PAB framework, the Fund cannot divest from sectors with high emissions. The aim of this regulatory framework is not only to reduce greenhouse gas emissions and achieve net zero emissions by 2050, but also to benefit companies that make a positive contribution to the climate transformation. In order to meet the 7% reduction target, AP2 will continue to engage with high emitters, primarily through CA100+ and the Council on Ethics. AP2 has also contacted the organisations of which the Fund is a member of to ensure that their relevant policies and advocacy work are in line with the Paris Agreement. AP2’s voting guidelines state “The Fund advocates that companies express their support for and draw up a strategy to be in line with the Paris Agreement” (see voting guidelines here). However, if companies do not sufficiently reduce their greenhouse gas emissions for AP2 to meet its targets over time, the portfolio will be weighted towards high performers.

Further work: A more detailed plan is under development and AP2 uses the Net Zero Investment Framework (NZIF) as a guide to develop this plan.

Fossil fuel investment: The Fund does not invest in companies with more than a certain proportion of their sales from coal, oil and/or gas, or in power companies with more than 50 per cent of their revenue from combustion of fossil fuels. The maximum proportion for coal is 1 per cent, for oil 10 per cent and for gas 50 per cent. Furthermore, the footprint must be reduced by 7 per cent per year, with the aim of achieving net zero emissions by 2050. See AP2’s TCFD report.

Operational emissions: An internal environmental review shows that the largest environmental impact from AP2’s office comes from electricity consumption and carbon emissions associated with travel. Internal targets have been set based on the internal environmental policy.

98 per cent of all business trips between Gothenburg and Stockholm are made by train. AP2 consumes only green electricity, and measures to reduce energy consumption and improve waste management.

AP2 case studies

AP2: Understanding the drivers of change in portfolio emissions

23 March 2023

Commitment 1: Transitioning investments