Enhanced focus on climate

With PFA Climate Plus, your savings are invested with a focus on promoting the green transition, including through investments that contribute to a lower carbon footprint, investments in assets that support the green transition and active ownership. The investments are based on PFA’s entire investment universe, which means that the investments include, for example, equities, bonds and alternative investments. To ensure that the investments contribute to promoting the green transition while also generating the best possible return potential, stricter climate criteria apply to the assets in which your savings in PFA Climate Plus can be invested.

A company in the equity portfolio may be included in PFA Climate Plus if it meets at least one of these criteria:

   

The share of the company’s revenue that is in accordance with the EU classification system (the taxonomy) amounts to 15 per cent or more.

   

The company has either committed to the Science Based Targets initiative (SBTi) or has SBTi-approved climate targets.

   

The company has an implied temperature rise (ITR) of less than 2 degrees. Implied temperature rise (ITR) is a measure of how a company or portfolio of companies is expected to affect the climate. The figure shows how much global temperatures are expected to rise if all companies in the world had the same carbon footprint and made progress in the green transition at the same pace as the companies in PFA Climate Plus.

For the bond portfolio, the general rule is that investments are made in green listed government and corporate bonds issued on the basis of the International

Capital Market Association (ICMA)’s principles for green bonds. Investments will also be made in standard mortgage bonds.
In the majority of the property portfolio, investments are made in properties that are either energy efficient (Energy Label A) in accordance with the EU classification system (the Taxonomy) or have DGNB platinum or gold certification (or equivalent).

Alternative investments in the form of private equity, infrastructure and unlisted credit are made with the aim of contributing to the green transition (where possible in line with the requirements for comparable listed assets). In addition, there is a focus on investments in natural resources that can remove CO2 from the atmosphere.

As the investment universe is more limited than that of PFA Plus, we expect returns over the course of a lifetime to be lower than in PFA Plus. In practice, however, returns may be higher, the same or lower.

PFA Climate Plus advantages 

CO2 focus across the value chain in PFA Climate Plus

The equity portfolio in PFA Climate Plus must emit at least 60 per cent less CO2 than the global equity index, MSCI ACWI. This is measured across Scope 1, 2 and 3 emissions.

Scope 1 measures the company’s direct CO2 emissions, while Scope 2 measures the CO2 emissions for which the company is indirectly responsible, such as emissions from energy produced for the company. Scope 3 measures the CO2 emissions from a company’s other indirect upstream and downstream activities, i.e. activities that the company does not own, control or manage. This may include, for example, the use of the company’s products and the purchase of materials used to produce them.

Which risk profile should I choose? 

You choose the risk profile that matches your risk appetite. Your options are: Profile Low, Medium or High. The profiles differ in terms of the balance between return potential (what you may earn) and risk (the possibility of fluctuations in your savings), but are otherwise the same across the different investment focuses (PFA Plus, PFA Climate Plus and PFA Index Plus). The higher the risk you take on, the greater the risk of fluctuations in your savings, as a larger share will be invested in the PFA Climate Plus High-risk fund. However, a higher risk will also mean a greater return potential on your savings.

The choice of investment profile is crucial for your pension savings – and therefore for your future. Therefore, it is important that the balance between risk and returns suits you and your financial situation. The right choice depends, among other things, on what your overall financial situation and your total long-term savings look like. Profile Medium will often be suitable for most people, but Profile Low may be a better option for you who have less risk tolerance. Meanwhile, Profile High may be the perfect match, if you prefer to invest your savings with the potential of a higher return, but thus also a higher risk of loss.

 

Profile Low

Approximately 60 % of your savings are invested in the high-risk funds and approximately 40 % in the low-risk funds.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 14 years before the pension payout date. At retirement, the investments in the high-risk funds are gradually reduced to approximately 30 per cent. Thereafter, the proportion will be reduced by approximately 1 percentage point per year, reaching approximately 10 per cent 20 years after pension payouts begin. The percentage will not fall below approximately 10 per cent.

 

 

Profile Medium Climate icon

Approximately 95 % of the savings are invested in the high-risk funds and approximately 5 % in the low-risk funds.

The allocation indicates the risk in the profile before gradual reduction of risk, which begins 18 years before the pension payout date. At retirement, the investments in the high-risk funds are gradually reduced to approximately 45 per cent. Thereafter, it will be reduced by approximately 1 percentage point per year, reaching approximately 20 per cent 25 years after retirement. The percentage will not fall below approximately 20 per cent.

 

Profile High

100 % of the savings will be invested in the high-risk funds.

The distribution indicates the risk in the profile before gradual reduction of risk, which begins 12 years before retirement. At retirement, the investments in the high-risk funds are gradually reduced to approximately 60 per cent. Thereafter, it will be reduced by approximately 1 percentage point per year, reaching approximately 30 per cent 30 years after retirement. The percentage will not fall below approximately 30 per cent.

Do you have Profile Cautious? Read more here.

Find the investment focus that matches your preferences

See the differences and similarities between PFA Plus, PFA Index Plus and PFA Climate Plus to help you choose the investment focus that suits you best.