Sweden’s KPA Pension has adopted climate targets to reach net-zero emissions in its asset portfolios by 2050, after fulfilling its previous climate sub-goals as of 1 January 2025.

One of KPA’s new targets is to reduce the CO2 footprint of equities, corporate bonds, alternative investments, and real estate by 2030.

The provider, which is part of and shares goals with the Folksam Group, the CO2 footprint of equities, corporate bonds, and real estate has decreased by 29 per cent since 2019.

KPA Pension said its new climate goals for 2030 were “important steps" to achieve its net zero target by 2050.

The interim targets are in line with the Intergovernmental Panel on Climate Change’s 1.5-degree scenario and “significantly” raise the ambition by being even more concrete and measurable compared to before.

KPA Pension head of responsible ownership, Emilie Westholm, said: "We have worked to develop new interim goals for 2030 and taken the next step with a broader perspective on the issue of climate transition by including Just Transition and also having clearer expectations for the company management's incentive programs.

“We see great advantages in setting science-based climate goals but do not want the social consequences of the transition to be forgotten. In some cases, it is a difficult balancing act.”

The provider follows the UN-convened Net-Zero Asset Owner Alliance's framework for climate targets.

The sub-goals cover three areas: advocacy work towards companies, in which KPA Pension has ownership, capital allocation strategies, and increased knowledge.

In particular, KPA Pension said it would actively influence the 100 holdings with the highest emissions, as well as all selected fund companies in unit-linked insurance, to align with four key criteria identified for a successful climate transition.

These include having a net zero emissions target, adopting a scientifically based climate target according to the Science Based Target initiative, addressing social sustainability through Just Transition, and incorporating sustainability goals into management's reward programs.

KPA Pension has said it has a target of 50 per cent of the companies meeting two criteria, 25 per cent meeting three criteria, and 25 per cent meeting all four criteria.

In addition to this, KPA Pension aims to reduce emissions by, reducing the CO2 footprint of equities by 50 per cent from the base year 2019, reducing the CO2 footprint of corporate bonds by 50 per cent from the base year 2022, reducing the CO2 footprint by 50 per cent for alternative investments, and reducing the CO2 footprint of properties by 50 per cent from the base year 2019.

It also intends to conduct 15 dialogue meetings each year until 2030 to promote climate-related investment solutions.

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