The Swedish Fund Selection Agency will only consider submissions from asset managers that incorporate ESG into their strategies in the upcoming procurement process for the new defined contribution (DC) premium pension platform.

Late last year, the agency announced that it will launch a series of procurements for asset managers to assist in allocating DC pension assets, which Bloomberg has reported will total SEK 1trn.

Those selected will be asked to manage the SEK 1trn (€89bn) of assets for the public premium pension system in Sweden.

Asset managers who do not fully incorporate ESG into their strategies will not have their submissions accepted.

All fund managers and investment managers will be required to have signed and be subject to the UN Principles for Responsible Investment (PRI), or be subject to the signing of PRI principles made the firm’s group of companies.

Under the procurement criteria, they will only be able to offer investment products registered as Article 8 and Article 9 funds under the Sustainable Finance Disclosure Regulations (SFDR).

It is expected that the Swedish Fund Selection Agency will begin its first procurement in the second quarter of 2023.

PPCmetrics AG, a consultancy firm, has been appointed by the agency to assist in the procurement process.

The premium pension system, which was launched in the late 1990s, currently has assets of around €200bn.

However, with inflows larger than outflows, the agency expects that assets will increase to around €400bn by 2040.

Its aim is to complete around 30 procurements for the new defined DC premium pension platform between spring 2023 and the middle of 2025.

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