Responsibility and PFA's pension products

At PFA, we believe that accountability and good returns are increasingly interlinked – not least from the point of view of a long-term investor. The funds in PFA Plus are invested based on PFA’s general principles for active ownership and responsible investments. It is not just about making our customers’ investments grow – it is also about making them grow in the right way.

PFA and the EU’s framework for sustainable financial products

The EU wants to support the green transition and therefore it wants to create a common framework for how one understands and reports on sustainability in connection with financial products. Among other things, this is done via regulating in the form of the so-called Disclosure Regulation (SFDR).

The disclosure regulation means that PFA and other financial companies must provide sustainability-related information on their financial products - for PFA Pension, this means its pension products. What information needs to be provided depends on the pension products’ sustainability goals and whether they are wholly or partially sustainable. The duty to disclose is specified in EU’s so-called taxonomy regulation, which is closely related to the disclosure regulation. The taxonomy regulation is intended to establish a classification system for which economic activities can be considered as being sustainable in terms of the climate and environment. 

How PFA’s pension products are categorised

The EU’s taxonomy categorises financial products as either wholly, fully or not sustainable financial products. Here you can see how PFA’s pension products are classified.

 
  Product Sustainability category
PFA Invests PFA Plus – investment profile A Partly sustainable (article 8)
  PFA Plus – investment profile B Partly sustainable (article 8)
  PFA Plus – investment profile C Partly sustainable (article 8)
  PFA Plus – investment profile D Partly sustainable (article 8)
  PFA Climate Plus – investment profile A Partly sustainable (article 8)
  PFA Climate Plus – investment profile B Partly sustainable (article 8)
  PFA Climate Plus – investment profile C Partly sustainable (article 8)
  PFA Climate Plus – investment profile D Partly sustainable (article 8)
  Payout protection cover Not sustainable (article 6)
PFA Optional Low-risk fund Partly sustainable (article 8)
  High-risk fund  Partly sustainable (article 8)
  Climate Plus Low-risk fund Partly sustainable (article 8)
  Climate Plus High-risk fund Partly sustainable (article 8)
You Invest View the categorisation of the individual funds
Average interest rate PFA Traditionel  Not sustainable (article 6)
   

How does PFA work with sustainability risks and product categorisation?

What is PFA’s position regarding the new EU regulations?

It is important to PFA, our customers and the green transition in general that there is a common framework for how one categorises different pension products so that there is more transparency, more clarity and a real basis for comparison across products and companies.

In PFA Plus and PFA Climate Plus, we focus broadly on promoting sustainability, and, in PFA Climate Plus, we have extra focus on CO2-reducing investments. In spite of this broad focus, the products may also include non-sustainable investments though.

PFA is continually investigating how we can ensure an attractive range of funds to invest in via You Invest that address our customers’ demands and preferences for things such as sustainability. The framework for regulation sustainable investments is still new, and there is a limited selection of fully sustainable funds. At PFA, we are closely monitoring the developments and we will take stock of the situation once more products become available.

How does PFA work with sustainability in its pension products?

At PFA, we have a strong focus on sustainability in all our pension solutions and we believe that responsibility and good returns are increasingly interlinked - not least from the perspective of a long-term investor. That said, our products will have various degrees of sustainability and different levels of focus.

We invest all our pension products based on PFA’s policy for responsible investments and active ownership which forms the framework for how we work with integrating responsibility into our investment processes and is based on international standards and principles.

PFA Climate Plus has a special focus on promoting CO2-reducing and climate-friendly investments. PFA defines climate-friendly investments as assets that are either supplying solutions for the green transition, are leaders in the green transition in their industries/sectors, or which focus on having a low carbon footprint. For all our investments, we ensure that we comply with minimum standards for social issues via our work with responsible investments and our policy for responsible investments.

What does this mean going forward?

The framework for regulating sustainable investments is still being developed, so there is some uncertainty associated with various interpretations and there is limited data. At PFA, we have therefore adopted a cautious approach to the classification of our pension products.

   
PFA Plus and PFA Climate Plus are categorised as products that focus on both returns and sustainability, and they are classified pursuant to article 8 of the EU’s Sustainable Finance Disclosure Regulation (SFDR).

PFA Plus has been developed for companies that want to offer their employees a complete and up-to-date pension plan. It includes savings and insurance cover all in one package – creating great value for both the employees and the company.
Read more about PFA Plus

PFA Climate Plus is a pension product that makes it possible for customers to save up for retirement through selected CO2-reducing investments. PFA Climate Plus will be CO2-neutral in 2025 at the latest.
Read more about PFA Climate Plus
 

Integration of sustainability risks in investment decisions

PFA integrates sustainability risks in its investment decisions in the same manner as other risks. All of PFA’s investments have exposure to sustainability risks. A sustainability risk is an environmental, social or governance event or circumstance that, if it materialises, may have a significant negative impact on the value of the investment. As with other risks, sustainability risks are incorporated into the investment processes - PFA seeks to identify and prioritise potential negative sustainability risks in our investments. This is done by using relevant adjustments based on asset classes and the opportunities and data that PFA has available.
 
When PFA works with sustainability risks then, among other things, we do due diligence based on available data, we use ESG analyses and we use the knowledge we have about special issues in certain sectors and individual companies, projects or countries. In addition, PFA’s principles for responsibility in the investment process is based on the following factors:
 
  • The integration of climate and environmental considerations
  • The integration of responsible tax practices
  • Dialogues with our business partners about responsible behaviour

        

 

Principal Adverse Impact Statement

In PFA, it is important for us to minimise the adverse sustainability impacts of our investments.
Please read more about our work in PFA’s Principal Adverse Impact Statement.

Integration of sustainability risks in the remuneration policy

At PFA, remuneration (together with other employment terms) should reflect the customers’, the PFA Group’s and the company’s interests and promote the long-term objective of creating value for customers as well as promoting sound and efficient risk management. Consequently, the PFA Group’s remuneration policy also considers sustainability risks. 

Sustainability risks are integrated in remuneration in the same way as other types of risks identified for the PFA Group. The PFA Group's general remuneration structure reflects the Group’s established strategy Commercial Responsibility 2023 through to 2023, including the overall investment and risk strategy and identified risks such as operational, market, sustainability and reputational risks. 

Sustainability risks are also incorporated as an integral part of the policy for active ownership and responsible investments, which the relevant business units of the PFA Group are liable to comply with. Compliance with the PFA Group’s guidelines are, together with the other employment terms, an important part of the remuneration principles in the PFA Group. The level of importance which should be attached to the sustainability risks as part of the remuneration policy will depend on the business area of the individual business unit.