PFA Climate Plus

Your pension is your most important climate investment

With PFA Climate Plus, you can save up while ensuring that your pension is even more climate-friendly, and your savings will be placed in very climate-friendly investments without compromising the return. The goal is that, as early as 2030, the investments will remove more carbon from the atmosphere than they emit.

PFA Climate Plus is based on three concrete climate goals

When PFA invests pension savings it is always based on responsibility, sustainability and based on the Paris Agreement and the UN Sustainable Development Goals. With PFA Climate Plus you can go one step further in supporting the climate-friendly transition. It is both manageable and flexible since the climate objective is based on three concrete climate goals.

From the beginning, the equity portfolio in Climate Plus emitted 60 percent less carbon than the global equity index (MSCI ACWI)1.

 


    

As we approach 2025, the ambition is for the entire product to be CO2-neutral2.


    

As we approach 2030, the ambition is for the entire product to be CO2-negative2, removing more CO2 from the atmosphere than the investments emit 

1 The MSCI All Country World Equity Index measures CO2 by Scope 1 and Scope 2 (see later in the text) in the listed equity portfolio in tons of CO2 emitted per million USD invested.
2 We attempt to achieve this goal by investing in forestry and technology that removes CO2.

How we ensure the climate goals

To make sure that we meet our climate goals while working to secure the best possible return for our customers, we will measure carbon emissions for our portfolios on an ongoing basis and compare them with the global index. As the model shows, the shares in PFA Climate Plus emit 80 % less carbon than the global index, while all PFA's equities currently emit 19 % less carbon.

Source: MSCI - For all equities, it is a weighted average for the year based on monthly metrics. For Climate Plus it is a weighted average for January - June 2021.
Updated: 
31.08.2021

  

PFA obtains figures from the global equity index, MSCI

PFA’s work with climate goals depends on the ability to measure and monitor our equity investments’ CO2 emissions. This is not straightforward as there is still a lack of adequate data for many assets. Therefore, as a default, PFA only measures systematic CO2 emissions from the equity portfolio and not from e.g. the bond portfolio or our alternatives.

PFA’s assessments and benchmarks are based on data from the MSCI ACWI (All Country World Index), which annually publishes estimates for the CO2 emissions of individual companies. Even though MSCI is currently the market standard for measuring CO2 emissions from an equity portfolio, the data used is still subject to a degree of uncertainty. This is partly because a lot of data is retrospective and may be a year or two old; and partly because there are still many companies that do not even publish data on their CO2 emissions. In the latter case, MSCI itself assesses emissions by using comparable companies in the same industry and locality.

MSCI’s assessment takes into account three different aspects of a company’s CO2 emissions. These are known as ‘Scopes’. While there is reasonably reliable data for Scopes 1 and 2, Scope 3 is subject to great uncertainty and is difficult to calculate. Consequently, it is not currently included in the measurement or benchmark of PFA Climate Plus.

• Scope 1 is the CO2 emitted by a company’s activities – e.g. manufacturing, etc.
• Scope 2 is the CO2 for which a company is indirectly responsible – e.g. CO₂ from energy produced for the company.
• Scope 3 is the CO2 emitted by the company’s other indirect activities: in other words, sources that companies do not own, control or manage. This might be, for example, the application of a company’s products.    

 

A better climate is a common goal

Climate-friendly investments may include wind turbines and solar energy, but they may also include many other things. Many companies, both large and small, in virtually all industries focus on their climate footprint, and they do so in very different ways. At PFA, we invest in both companies and projects, and here you can find a selection of the investments that are part of PFA Climate Plus.

  

Sustainable hybrid ferries reduce the CO2 emission
A sharing economy saves square metres and supports sustainability



Republic Services Inc.

Republic Services Inc. is an American refuse disposal company that is leading the way in the green transition when it comes to reusing waste or turning it into energy. The company handles non-hazardous waste from households and companies, and it has an environmentally-friendly focus both with respect to handling waste and careful transport. This is why their vehicles are increasingly powered by natural gas rather than petrol. 
  

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Republic Services Inc. is highlighted on CDP’s (carbon disclosure project) A list as a leading climate transition company, and it is the first American refuse disposal company to have validated their goals of reducing carbon emissions leading up to 2030. 

Nestlé

Nestlé is the world’s largest food company, with well-known brands such as Kitkat, Perrier, San Pellegrino, Vittel and Nescafé. The company is committed to having zero emission of greenhouse gasses in 2050, in accordance with the Paris Agreement, and 41% of the electricity consumption today comes from sustainable energy. Furthermore, Nestlé set the goal of helping to solve the plastic pollution problem by making 100% of all plastic packaging reusable by 2025 and using less plastic in general.

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Nestlé has also set the goal of preserving and restoring forest areas, and the company has an ambitious plan to reduce carbon and effectively exploit and optimise water usage. 

Alibaba Group

Alibaba is a Chinese internet conglomerate, which owns e-commerce platforms, offers IT and cloud solutions, and so on. The company operates using climate-friendly initiatives, e.g. where one data centre is cooled using water from a lake while another is run on solar and wind energy. At the same time, Alibaba saves a lot on power with their IT solutions because this is more energy-efficient than if the customers had their own solutions.

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Through the Alipays mobile app, you can accumulate ‘green points’, for example by walking or biking to work or using e-payments instead of paper invoices. The green points can, for instance, be used to plant trees, and in 2018, this resulted in the planting of 55 million trees. 


See the full list of stocks contained in the PFA Climate Plus equity portfolio here

Accenture PLC
adidas AG
Alibaba Group Holding Ltd
Alphabet Inc
Asahi Group Holdings Ltd
Bank of America Corp
Baxter International Inc
BNP Paribas SA
Boston Scientific Corp
Cisco Systems Inc
Citigroup Inc
Cleanaway Waste Management Ltd
Colgate-Palmolive Co
CVS Health Corp
Eaton Corp PLC
eBay Inc

Ecolab Inc
Facebook Inc
Iberdrola SA
Infosys Ltd
Johnson Controls International plc
Microsoft Corp
Nestle SA
Novo Nordisk A/S
Novozymes A/S
Orsted AS
Republic Services Inc
Roche Holding AG
ROCKWOOL International A/S
S&P Global Inc
Samsung Electronics Co Ltd
SAP SE

Siemens AG
Siemens Energy AG
Swiss Re AG
Tencent Holdings Ltd
Thermo Fisher Scientific Inc
Trimble Inc
Unilever NV
UnitedHealth Group Inc
Verizon Communications Inc
Vestas Wind Systems A/S
Visa Inc
VMware Inc
Willis Towers Watson PLC
Xylem Inc/NY
Yaskawa Electric Corp
Zurich Insurance Group AG

The stock list was updated on 30 June 2021

PFA Plus vs. PFA Climate Plus

More climate-friendly investments but the same risk and return potential

Climate-friendly investments should not have a cost on the return. Therefore, the risk level and expectations for the return in PFA Climate Plus are the same as in PFA’s other savings solution, PFA Plus. However, the return will develop differently because the products are invested differently.

Many of the investments in PFA Climate Plus are also included in PFA Plus, but not necessarily vice versa. This is due to the extraordinarily high climatic requirements, which only a limited number of companies can fulfil. Accordingly, PFA Climate Plus contains far fewer companies than PFA Plus. This can cause major fluctuations in the return because there are fewer assets to balance each other. But a pension involves savings in the long-term and this basically means that you will receive the same risk level and expected return potential by investing your savings in a more climate friendly way with PFA Climate Plus.

Only customers with PFA Plus Market Rate Saving have the opportunity to choose PFA Climate Plus. You can contact PFA on 70 12 50 00 and get an answer on whether you can place your investments in PFA Climate Plus.

 
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Overview of the difference between PFA Plus and PFA Climate Plus

The chart below illustrates a comparison of the two products on the basis of a number of parameters:


Parameters PFA Plus  PFA Climate Plus
Responsible investments and active ownership ✔ 
Extra focus on climate
✔ 
Exclusion of fossil fuels – 
CO2 emission in terms of the global stock index -16 % -80 %
Goal to be CO2 -neutral by 2050 2025
Alternative investments and properties Approx. 23 % currently Approx. 20 % over time
Risk in relation to PFA Plus
Comparable risk with PFA Plus*
Expected return in relation to PFA Plus
Same long-term return as PFA Plus
APR 0,61 - 0,96 % 0,61 - 0,96 %
Scaling down towards retirement ✔ 
** The equity portfolio in PFA Klima Plus consists of fewer shares (approximately 50) and has a core theme of reduced climate impact. This means that the concentration risk is greater in PFA Climate Plus. At the same time, PFA Climate Plus has a so-called scenario risk if, for example, the political and business climate focus shifts significantly in relation to the current one.



Specific criteria for PFA Climate Plus

Here you can see the climate criteria that apply to the various assets of PFA Climate Plus: 

Shares
Like PFA’s other investments, the PFA Climate Plus portfolio is assessed on the basis of the requirements we have set for our responsible investment policy. There is also an additional regard for climate, which means, for one thing, that investments in oil, coal and gas companies are excluded. It also means that the equity portfolio will be far more focused on climate-friendly companies. Whereas the current equity portfolio in PFA Invest includes approximately 1,000 companies, currently the equity portfolio in PFA Climate Plus includes only approximately 50 companies.

Bonds
When it comes to bonds, to a far greater extent than in PFA’s other investments, PFA Climate Plus will use so-called ‘green’ bonds, issued for the funding of measures that help tackle the climate challenge. The same requirements apply to corporate bonds as to shares. There is no investment in bonds from oil, coal and gas companies, and bond issuers must have a climate-positive business model. PFA will also invest in ordinary government and mortgage bonds.

Derivatives
PFA Climate Plus will also use derivatives (financial contracts for assets) based on shares, interest rates, etc. to ensure optimal risk management. Equity derivatives are subject to the same requirements as the equity portfolio in PFA Climate Plus.

Alternative investments and properties
Alternative investments and properties are a very important part of the existing PFA Plus product. The idea is also for PFA Climate Plus to invest approximately 20 % of the portfolio in alternative investments and properties. These investments must also meet the climate requirements that apply to PFA Climate Plus. Therefore, the development of the alternative and property portfolio is expected to be a gradual process.
   

Next gen care

With PFA Climate Plus you can get all or parts of your pension savings to work extra hard for the climate. In this way you contribute with tonnes of next gen care and a more sustainable future for your children and grandchildren.