Swedish equity funds far from Paris Agreement target
News, Staff memo Cristina Cella, an advisor at the Riksbank, has examined the temperature alignments of 122 Swedish equity funds in a new Staff Memo. The results suggest that the funds in the sample on average are aligned to a temperature increase of 2.77 °C, well above the upper limit of 2 °C set out in the Paris Agreement.
The results also show that there is, on average, no significant difference between the temperature alignment of funds that have joined leading climate initiatives and funds that have not. There is also no difference between funds that have a 'Low Carbon Designation' from Morningstar and those that do not.
Cella has also looked directly at the funds’ exposure to firms with different transition risk profiles. This analysis showed that the funds collectively invest substantially in securities issued by firms that still have significant work to do to green their operations.
A Staff Memo provides members of the Riksbank’s staff with the opportunity to publish advanced analyses of relevant issues. It is a publication for civil servants that is free of policy conclusions and individual standpoints on current policy issues. Publication is approved by the appropriate Head of Department. The opinions expressed in staff memos are those of the authors and are not to be seen as the Riksbank’s standpoint.