AP7 increases green mandate awarded to Impax

The largest of Sweden’s AP national pension funds, AP7, has increased the size of a ‘green impact mandate’ first awarded to specialist asset manager Impax Asset Management in 2018 by SEK500 million (EUR48.5 million) to SEK1.4 billionn (EUR135.8 million).

Partnering with BNP Paribas Asset Management, with whom Impax works closely on the distribution of its environmental strategies, Impax was awarded the mandate from AP7 in 2018 after a lengthy tendering process. The EUR60 billion pension fund, which manages the default option within Sweden’s premium pension system, allocated SEK758 million (EUR73.5 million) to Impax to invest via its Leaders Strategy in companies that contribute to solutions for climate and environmental problems.

The mandate is aligned with AP7’s objectives to invest actively in ways that would likely advance environmental and sustainability goals. A key aspect of the mandate is for Impax to contribute as a strategic partner to AP7’s Green Impact Objective.
The objective of the Impax Leaders Strategy is to deliver sustainable, above market returns over the long-term by identifying mispriced companies that address several long-term macroeconomic themes: growing populations, rising living standards, increasing urbanisation, rising consumption and the depletion of limited natural resources. Investments are made in companies which have more than 20% of their underlying revenue generated by sales of environmental products or services in the energy efficiency, renewable energy, water, waste and sustainable food and agriculture markets.
Lisa Beauvilain, Head of Sustainability and ESG at Impax, says: “AP7 increasing the size of its mandate is testament to Impax’s unique approach and to the success of our long-term relationship with AP7.
“The two Groups have embarked on a partnership project to help solve environmental challenges by working to develop thought-leadership across the investment community in relation to impact measurement and investing. Impax will further develop the measurement of the environmental impact of AP7’s Green Impact Mandate with the two organisations becoming dialogue partners.
“Despite market volatility arising from the unfolding COVID-19 crisis, investor interest in positive environmental impact has remained robust with institutions seeking to align their assets with long term opportunities arising from the transition to a more sustainable economy.”
Hans Löfgreen, Senior Portfolio Manager at AP7, says: “We are pleased to increase the size of the mandate awarded to Impax. AP7 has the stated ambition to develop, together with managers, methods to measure the sustainability benefits of investments.
“We have been able to successfully partner with Impax to develop metrics and methodologies that measure the real-world impact of our investments.”