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Church of Sweden

PRI reporting framework 2020

You are in Strategy and Governance » ESG issues in asset allocation

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation carries out scenario analysis and/or modelling, and if it does, provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

Describe We don't have many holdings in energy intensive companies. However, we have conducted a scenario analysis with the tool PACTA.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

13.3. Additional information. [OPTIONAL]

We divested in 2008-09 and have about 400 corporate related holdings, most of them with low-carbon profiles. We have also made various climate-related analyses over the years, always confirming what we already know. We therefore do not see the need for a deeper climate scenario analysis.

We have the same ESG criteria for all asset classes. Within alternatives, we include specific impact investments.


SG 13 CC.

13.4 CC. Describe how your organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, its results, and any future plans.

Describe

As I have explained, we are clear in our investment policy on how we look at climate-related risks and opportunities. We divested in 2008-9 and have since then invested in solutions. The PACTA analysis shows that we have a very low risk since we don't hold the risky companies in our portfolio. So the climate scenario analysis is not very useful for our investment managers, but instead they use our strict investment guidelines in our policy.

13.5 CC. Indicate who uses this analysis.

13.6 CC. Indicate whether your organisation has evaluated the potential impact of climate-related risks, beyond the investment time horizon, on its investment strategy.

Describe

The Church is heavily engaged in climate change and its long-term effects on our planet and all living species. It is also reflected in our investments and our investment policy.

13.7 CC. Indicate whether a range of climate scenarios is used.

13.8 CC. Indicate the climate scenarios your organisation uses.

Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other
Other
Other

SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

14.2. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

All AMs have to comply with our sustainability criteria as stated in our investment policy. Therefore, there are no companies in the fossil energy sector, and almost no heavy industry or energy utilities in our portfolio. No companies are in severe breach of ILO conventions and other international norms. We want to invest in climate solutions, so since 2008 we have had very low carbon footprints also for Scope 3. We have a VC fund and a PE fund with sustainable tech companies. We have a green bonds fund and microfinance funds. Resource efficiency and social criteria are integrated in all asset classes.

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

other description

          Our policy on invest-divest is clear. We discuss risks/opportunities with AMs, who integrate climate change and other ESG issues in processes and strategies.
        

14.5. Additional information [Optional]

We don't want AMs to use carbon footprints since they give a flawed picture, showing only Scope 1 and 2. Even with Scope 3 the figures don't explain the climate performance of the holdings. A solar panel producer could have higher footprints than a car manufacturer.


SG 14 CC.

14.6 CC. Provide further details on the key metric(s) used to assess climate-related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Exposure to carbon-related assets
          reduce risk to stranded assets
        
          number of companies or asset value per total asset value
        
          negative screening
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risk management processes used for identifying, assessing and managing climate-related risks.

Please describe

negative screening; if any holding is in breach of our climate exclusionary criteria, they will be sold

14.9 CC. Indicate whether your organisation, and/or external investment manager or service providers acting on your behalf, undertake active ownership activities to encourage TCFD adoption.


SG 15. Allocation of assets to environmental and social themed areas

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

25 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

5 Percentage of AUM (+/-5%) per asset class invested in the area
6 Percentage of AUM (+/-5%) per asset class invested in the area
9 Percentage of AUM (+/-5%) per asset class invested in the area
5 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

All asset classes focus on ESG and low-carbon solutions. Even the microfinance funds lend to people and companies which are green.

Asset class invested

9 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

Swedish real estate with high ESG performance including energy efficiency, mostly offering affordable rental apartments for people.

Asset class invested

5 Percentage of AUM (+/-5%) per asset class invested in the area

Brief description and measures of investment

We have some funds providing MFIs with loans. Another fund provides small sustainable banks with loans and equity. These banks lend to sustainable SMEs, so the impact has a higher leverage for the real economy.

 We also have a credit fund for green SMEs, and a fund, mentioned above, investing in small sustainable banks lending to sustainable SMEs. Finally, we have a carbon credit/agriforestry fund, providing financial services to SMEs.

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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