Tredje AP-fonden AP3
Portfolio level
Portfolio level – Portfolio decarbonisation reference target
Baseline date: 31 December 2019
Baseline performance: Carbon footprint for directly owned listed equity portfolio (scope 1&2):
- Absolute emissions: 1.1 million ton CO2e
- Portfolio weighted carbon intensity (TCFD): 9.3 tCO2e/million SEK
Target year: 2025, 2050
Target(s):
- 2025: 50% reduction
- 2050: Net zero
AP3 intends to expand the coverage of measured and reported emission data to include more asset classes as well as scope 3 data.
GHG scopes included: The emissions reduction target for 2025, and the reported data in the annual report, covers scope 1 and 2 emissions in the equity portfolio.
The intention is to include scope 3 in targets and reported data eventually, as more reliable data becomes available.
We do however include scope 3, mainly estimates from data providers, in our analysis and in how we define companies to engage with.
Asset classes in scope:
- 2025: Directly owned listed equity portfolio.
- 2050: All asset classes.
Methodology/net zero scenarios: AP3’s climate related targets have been aligned with recommendations in the Net Zero Investor Framework.
Emissions metrics: The target of 50% emission reduction is in absolute terms, but emission intensity is measured and reported in the Annual report.
Portfolio level – Investment in climate solutions target
Quantitative target
Approach: AP3 has a quantitative target related to green or sustainability bonds for the Fixed Income portfolio.
Target years: 2025
Target: 25% of the Fixed Income portfolio is to be invested in green- or sustainability bonds by 2025.
Methodology: AP3 uses ICMAs definition of green bonds and sustainability linked bonds.
The intention is to evaluate if, and how, AP3 can set targets and follow up investments in climate solution related to other asset classes.
Asset level
Asset level – Portfolio coverage target
Baseline date: 31 December, 2022
Baseline performance: 28% of all the companies within the listed equity portfolio (NACE code A-H, J-L) are aligned with the 1.5-degree target according to MSCIs ITR assessments.
Target year: 2030, 2040
Target:
- 2030: 50% of all the companies within the listed equity portfolio (NACE code A-H, J-L) should be aligned with the Paris Agreement and the 1.5-degree target.
- 2040: 100% of all the companies within the listed equity portfolio (NACE code A-H, J-L) should be aligned with the Paris Agreement and the 1.5-degree target.
Asset classes in scope: Listed equity portfolio.
The intention is to evaluate alinement criteria’s that can be applied to other asset classes.
Data sources: AP3 is currently using ITR (Implied temperature rise) assessments from an external data provider to evaluate alignment with the 1.5 degree target. The ITR measure is used to indicate which companies to prioritise engagement with.
Asset level – Engagement threshold target
Target:
- Companies representing 70% of financed emissions during 2023. AP3 has identified companies representing 70% of financed emission (scope 1, 2 and 3) and are contacting all of them (approximately 55 companies) initially.
- Companies representing 90% of financed emissions (scope 1, 2 and 3) in 2030.
Additional information
Methodology: AP3 considers the target of reducing emissions by 50% in the listed equity portfolio over a timespan of six years (2019-2025) to be consistent with the emission reduction identified as required by the IPCC.
However, as an investor and long term asset owner, it is important that our climate strategy enables us to achieve emissions reductions in the real economy, not only linked to our portfolio.
Thus, the targets for engagement, portfolio alignment and investments in climate solutions are equally important.
We plan to set targets for all asset classes and to include scope 3 emissions.
Operational emissions: Read about AP3s operational emissions and environmental impact on the webpage.
Fossil fuel investment: AP3 is currently updating processes and governing documents of how sustainability is integrated in the investment processes, which includes the approach regarding fossil-fuel investments.
A climate plan was published in Q1 2023.