Sustainability-related disclosure 

Sustainability-related disclosure 

PFA wants to invest in a future-proof and resilient society. For this purpose, among other things, we base our approach on the EU rules governing how sustainability characteristics in our savings products are communicated, advised on and reported. Here, you can read more about this work and what it means for the assessment of sustainability characteristics in our savings products.

PFA’s approach to sustainability characteristics in our investments

As part of its work on a sustainable economy, the EU has adopted frameworks for how sustainability in financial products, including pension products, should be classified, documented, advised on and communicated. These frameworks are described in more detail in the EU’s Sustainable Finance Disclosure Regulation. The rules stem from the EU Green Deal.

Read moreRead lessHere, ‘sustainability’ must be understood in alignment with the EU rules about when an investment can be called sustainable and, in addition to climate and environmental factors, it also includes considerations for a balanced social and economic societal development as well as good corporate governance. Initially, the EU’s green deal has also resulted in an environmental taxonomy that specifies common standards for when an economic activity can be considered environmentally sustainable..

The EU’s green deal is intended to convert the EU into a modern, resource-efficient and competitive economy by ensuring:

• that there are no longer net emissions of greenhouse gases by 2050 at the latest
• that economic growth decouples from resource consumption
• that no individuals and no areas are left behind

The EU’ frameworks also allow for the use of various degrees of sustainability, ranging from non-sustainable to partially sustainable to fully sustainable financial products. For partially sustainable financial products, they will as a general rule promote environmental or social characteristics in various ways while fully sustainable products have a sustainable investment objective.
 
PFA is currently unable to classify any investments as sustainable. We continuously assess the extent to which the investments' activities are in line with an environmental objective in economic activities that qualify as environmentally sustainable according to the EU classification system. However, we do not classify these investments as sustainable, as these investments do not meet all the conditions that apply for sustainable investments. This means that although the products under PFA Plus and PFA Klima Plus are classified as partially sustainable financial products pursuant to Article 8 of the EU Disclosure Regulation, as they promote environmental or social characteristics, they do not contain minimum shares of sustainable investments.

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Integration of sustainability risks in investment decisions

Your investments in PFA’s market-rate savings products (i.e. PFA Plus and PFA Climate Plus) are exposed to sustainability risks. PFA cannot avoid sustainability risks but seeks to balance risk and return for each savings product through sustainability risk analyses and active ownership. PFA takes a dynamic approach to risk management, in which sustainability risks form part of an overall assessment of whether the investment in question offers an appropriate risk-adjusted return.

A ‘sustainability risk’ is understood as an environmental, social or governance event or circumstance which, if it occurs, could have a significant negative impact on the return on your investments. Like other risks, sustainability risks are integrated into our investment processes based on the data and methodologies available to PFA for each asset class (e.g. equities and bonds) and savings product. However, the data and methodologies currently available to us for assessing the impact of sustainability risks on returns on pension savings have not yet reached the same level of development as those for traditional financial risks. This means that it is not possible to identify or assess the various sustainability risks across asset classes and savings products in as detailed and specific a manner as traditional financial risks.

How does PFA address sustainability impacts?

At PFA, it is important to us to minimise the negative sustainability impacts of our investments.

You can read more about this work in PFA’s statement on principal adverse sustainability impacts.

Integration of sustainability risks in the remuneration policy

PFA’s remuneration policy contains information on how the remuneration policy aligns with the integration of sustainability risks across the PFA Group. PFA Group’s remuneration policy and practices are aligned with the PFA Group’s business and risk management strategy, objectives and risk management practices, as well as the Group’s long-term interests and overall performance.

This also involves taking into account PFA’s ongoing work on responsible investments as set out in PFA’s Policy for Responsible Investments and Active Ownership, which applies to all PFA investment decisions, including the integration of sustainability risks to the extent that they are relevant to the business unit.

Overview of changes to sustainability-related disclosures