At COP26 this week, Swedish ICMIF member, Folksam has announced an SEK 1.5 billion investment in developing countries’ climate change and climate adaptation, in collaboration with the European Investment Bank and the Allianz Group. The UN Secretary-General highlighted the Net-Zero Asset Owner Alliance, of which Folksam is one of the founding members, as the “Gold Standard” for credible commitments and transparent goals, when he opened COP26 this year.

At COP26, the financing of climate change and climate adaptation in developing countries is a crucial issue. Another is to accelerate the transition of the economy and business to net-zero emissions.

Speaking about COP26, Alok Sharma, President of COP26, said: “When world leaders meet in Glasgow, it is a crucial time for the planet. That is why I am very pleased with the cooperation, led by the European Investment Bank and the Allianz Group as an anchor investor, to improve support for developing countries and help mobilize green funding to achieve the goals of the Paris Agreement.”

Folksam Group is investing SEK 1.5 billion in an innovative fund that enables pension and insurance companies to invest in climate change and climate adaptation in developing countries. The Emerging Market Climate Action Strategy (EMCA), created by the European Investment Bank (EIB) and Allianz, focuses on renewable energy and energy efficiency in Africa, Asia, Latin America and the Middle East. EMCA was presented at a seminar at COP26 this week when Michael Kjeller, Head of Asset Management and Sustainability and Deputy CEO of Folksam and board member of the Net-Zero Asset Owner Alliance, spoke.

“We are pleased to have the opportunity to invest in climate projects with a focus on renewable energy in developing countries as anchor investors in this innovative climate fund,” said Michael Kjeller.

“At the same time as our customers’ pension savings are invested to grow, their money contributes to reducing climate emissions and to climate adaptation in developing countries,” said Ylva Wessén, President and CEO of Folksam.

Just over two years ago, Folksam Group, Allianz, ICMIF Supporting Member Swiss Re and three other capital owners initiated the Net-Zero Asset Owner Alliance with the joint commitment to achieve net-zero emissions in their asset portfolios by 2050. The Alliance now has over 60 members who together manage SEK 85,000 billion (USD 10 trillion). The members also have or will adopt intermediate goals by 2025 in line with what science says is required to reach 1.5 degrees. Folksam Group says its goal is to reduce greenhouse gas emissions from its investment portfolios by 29 percent by 2025.

“Credible long-term commitments are not enough. They must be followed by bold intermediate goals and immediate action,” said Michael Kjeller.

UN Secretary-General António Guterres cited the Net-Zero Alliance as the only example from the business community in his introductory speech at COP26 on 1 November, mentioning the Alliance in the following words, “The Net-Zero Asset Owner Alliance – the Gold Standard for Credible Commitments and Transparent Objectives”.

“I hope that Folksam Group’s customers feel proud that their savings are invested to contribute to climate change in developing countries. Our vision is for our customers to feel safe in a sustainable world,” concluded Ylva Wessén.

About COP26 and Emerging Market Climate Action

In order for pension and insurance companies to be able to invest in climate change and climate adaptation in developing countries, cooperation with multilateral development banks such as the European Investment Bank is needed. In EMCA, private and public capital work together. Pension and insurance companies that invest in EMCA contribute to an important part of the global climate change, namely that capital from developed countries is invested in the change in developing countries.

About Emerging Market Climate Action (EMCA)

EMCA was created by the European Investment Bank EIB and Allianz, which also manages it. Together with the EIB, Allianz, Germany, Luxemberg and the Nordic Development Fund (NDF), Folksam Group is an anchor investor in the fund. The investment criteria are based on the EU’s taxonomy for sustainable activities. This “blended finance impact investing” fund has a target of approximately SEK 5 billion.

More information: AllianzGI.com