Over a century ago, Folksam (Sweden) emerged in response to a pressing social need – affordable insurance for the less privileged. Today, it is one of Sweden’s largest insurance and pension providers, covering nearly half of the Swedish population. Folksam’s journey began with a vision, not just to offer general insurance such as housing and car insurance, but also life and pension insurance, always underpinned by a deep commitment to security in a sustainable world.
With billions in Swedish crowns under asset management, Folksam demonstrates financial robustness. This substantial fund is managed across a diverse portfolio, reflecting Folksam’s conscientious approach to investment and risk management.
Folksam is not a newcomer to the challenges of climate change and its proactive stance is evident in its long-standing commitment to responsible investments, including early adoption of exclusion criteria in the 2000s and being a founding member of the United Nations (UN) Principles for Responsible Investment (PRI) in 2006.
In 2019, Folksam was instrumental in establishing the UN-convened Net-Zero Asset Owner Alliance in New York, a collective of asset owners committed to net-zero portfolios by 2050. This initiative aligns with the Paris Agreement’s 1.5-degree scenario, underscoring Folksam’s dedication to real-world impact over mere portfolio adjustments.
Folksam has undergone a strategic shift in investment philosophy, from a primarily active management approach with a large in-house team, it has transitioned to a leaner operation focusing on passive portfolio management and sustainable investment criteria. This shift also involved a rigorous manager selection process and a concerted effort to integrate sustainability into every investment decision.
Folksam’s equity portfolio construction exemplifies their sustainability-first approach. They apply stringent sustainability filters, removing the lowest-scoring companies. This results in a portfolio that not only outperforms the market in ESG metrics but also demonstrates a significantly lower carbon footprint.
The insurers engagement strategy is innovative, exemplified by their ‘engagement ladder’. This approach categorises companies based on their climate action progress, from basic emissions reporting to science-based targets approved by initiatives like Science Based Targets initiative (SBTi). Folksam’s influence extends beyond the financial sector, engaging with industries like steel and banking to encourage fossil-free strategies and responsible lending policies.
Folksam’s journey reflects a deep-rooted commitment to social responsibility and environmental stewardship. By aligning its vast financial resources with sustainable practices and climate action, Folksam sets a precedent for the insurance and investment sectors globally. Its story is not just about financial acumen but about a steadfast dedication to a better, more sustainable future for all.
