• Atmospheric CO2 /Parts per Million /Annual Averages /Data Source: noaa.gov

  • 1980338.91ppm

  • 1981340.11ppm

  • 1982340.86ppm

  • 1983342.53ppm

  • 1984344.07ppm

  • 1985345.54ppm

  • 1986346.97ppm

  • 1987348.68ppm

  • 1988351.16ppm

  • 1989352.78ppm

  • 1990354.05ppm

  • 1991355.39ppm

  • 1992356.1ppm

  • 1993356.83ppm

  • 1994358.33ppm

  • 1995360.18ppm

  • 1996361.93ppm

  • 1997363.04ppm

  • 1998365.7ppm

  • 1999367.8ppm

  • 2000368.97ppm

  • 2001370.57ppm

  • 2002372.59ppm

  • 2003375.14ppm

  • 2004376.96ppm

  • 2005378.97ppm

  • 2006381.13ppm

  • 2007382.9ppm

  • 2008385.01ppm

  • 2009386.5ppm

  • 2010388.76ppm

  • 2011390.63ppm

  • 2012392.65ppm

  • 2013395.39ppm

  • 2014397.34ppm

  • 2015399.65ppm

  • 2016403.09ppm

  • 2017405.22ppm

  • 2018407.62ppm

  • 2019410.07ppm

  • 2020412.44ppm

  • 2021414.72ppm

  • 2022418.56ppm

  • 2023421.08ppm

Industry insider Niklas Ekvall has been chief executive officer of Swedish pension fund AP4 since 2016
News & Views

AP4 CEO Niklas Ekvall: ‘we drive the transition in the most carbon-intensive parts of the economy’

Net Zero Investor sits down with AP4's chief executive Niklas Ekvall to scrutinise the $32 billion Swedish pension fund's sustainable investment choices

Niklas Ekvall is what you could call a true industry insider. As former head of treasury at Nordea Bank, head of asset management at the same financial giant and former head of Carnegie, Ekvall made a number for himself in Scandinavia's investment space. 

In 2016, he was poached to become the new CEO of Swedish pension fund AP4. Since Ekvall took the lead, AP4 pioneered a portfolio decarbonization strategy the pension co-founded the Portfolio Decarbonization Coalition (PDC), together with the United Nations Environment Programme (UNEP) and Europe's largest asset manager, Amundi.

This week Net Zero Investor sits down with Ekvall to scrutinise AP4's sustainable investment efforts and how the SEK348 billion ($32 billion) investor pushes its investee companies towards greener investment choices.

First of all, how do you 'green' your investment portfolio? What do you look out for?

Development of investment opportunities in the area of sustainability are emerging rapidly, and our extensive update of the thematic analysis was completed in early 2023. The update has led to new knowledge as well as refined tools for our asset management organisation. Both of these aspects are important for our continued work with thematic sustainability investments. The thematic analysis took its starting point in a broad macro analysis to identify megatrends and a number of investment themes that cover roughly 90% of global greenhouse gas emissions. 

So tell us about the themes please.

Five main investment themes were identified: Fossil phase-out in energy systems, a cleaner industry, fossil-free transport, thriving biospheres as well as green buildings and infrastructure. Within the respective investment themes a number of investment opportunities were identified. We continually monitor these and actively search for investment opportunities within them.

All these themes seem to evolve around one key area: cleaner energy. Renewables are the most logical pro-net zero investment spot, but many investors cite risks and obstacles. Where does AP4 stand?

AP4 continuously analyses sustainability trends and searches for investment opportunities that it deems will incorporate sustainability aspects as well as generate a high financial return over the long term. Investments with a specific focus on the climate transition are based on the thematic analysis that AP4 conducted for the first time in 2018. To meet both these requirements in a market where the offering is not known in advance, we do not set any concrete goals for how much capital to invest thematically, however, the long-term ambition is that these will increase considerably over time.


"It is often asserted that a responsible owner should refrain from investing in sectors with sustainability challenges. AP4’s position is rather the opposite."

Niklas Ekvall

Can you tell us a bit about your investment efforts.

Based on this thematic sustainability analysis, during the years 2020-2022, AP4 made new investments amounting to a total of almost SEK 30 billion. These investments consisted mainly of new commitments in the unlisted portfolio, such as in sustainable infrastructure, including renewable energy. In the year 2022, renewable energy was our largest sustainability theme for new investments. The team for fundamental global equity invests in a thematic portfolio of niche companies in a number of environment-related themes such as energy transition with focus on fossil-free mobility, hydrogen gas, carbon sequestering lower carbon footprint in 2022 and recycling.

Some pension funds received criticism recently for having a net zero strategy in name only. Why is your approach different?

AP4 is a public pension fund governed by the Swedish National Pension Funds Act, the AP Funds Act, which stipulates that we are to invest the fund capital for a long-term high return. We are also to manage the capital in an exemplary way through responsible investments and responsible ownership. When managing assets, special emphasis shall be placed on how sustainable development can be promoted, however without compromising on the overall objective regarding return and risk.

For that reason, we continuously analyse sustainability trends and seek out proactive investments in sustainability trends that contribute to the transition to a sustainable society and that also benefit from this transition. The goal is to invest from both sustainability and financial perspectives, and the long-term ambition is that the allocation to investments anchored in strong sustainability themes should increase considerably over time.

Moreover, as a long-term investor sustainability risks in general, and climate related risks in particular, are deemed to have a significant impact on long-term returns. This has made it natural for us to include sustainability as one of our fundamental investment beliefs as it contributes to a better risk-adjusted return over time.


"The build-out of generation, distribution and storage of fossil-free energy, most notably electricity, is the actual engine in the transition."

Niklas Ekvall

We have worked specifically with the focus area climate & environment for more than a decade, when we came to the insight that the climate transition represents one of the greatest challenges of our time and that climate risks are not correctly priced in the market and constitute a substantial systematic risk. This insight led us to introduce the first low-carbon strategy in 2012. Our work on managing climate risks in its investment portfolio has meant that we have cut the carbon footprint of our investments in equities by more than 60% since 2010.

You mentioned the role of pension funds and taking the long view. Generally, how do you see the role of asset owners in shaping and driving the net zero agenda?

As a large institutional investor AP4 has many important duties, not the least in its role as a long-term and responsible owner. Unfortunately, it is often asserted that a responsible owner should refrain from investing in sectors with sustainability challenges. With respect to the climate transition, AP4’s position is rather the opposite. If you genuinely want to take responsibility as an investor and contribute to the transition in a powerful way, you must have the resolve to be active and drive the transition also in the most carbon-intensive parts of the economy.

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We therefore believe that taking responsibility does not mean refraining from investing in companies only because they are active in sectors with significant climate challenges. Rather, our ambition in these sectors is to identify and act as a long-term engaged owner in companies that in a serious way are addressing and actively working with their climate challenges and have the intention to adapt their operations over time. That is, companies that today may have a large carbon footprint, but at the same time are entirely crucial for the successful achievement of the climate goals.

Can you give us an example.

Sure, in 2020 AP4 started to build up a team for fundamental equities selection within the most carbon-intensive sectors of our global equity portfolio. One aim of this is to concentrate holdings in these sectors to a smaller selection of companies that are at the forefront of the transition to climate-neutral operations. If we use the energy sector as an illustration, to remain in AP4’s portfolio, companies need to have clear goals and ambitions that are aligned with the Paris Agreement and have substantial and growing investments in fossil-free energy production. The latter is important, since several traditional energy companies are, or are on track to becoming, among the world’s largest investors in energy sources that are fossil-free and will thereby play an important role in the climate transition.

Lets dive a bit deeper into your engagement and stewardship efforts. How and when do you engage with your investee companies?

Over time AP4 has reduced the carbon footprint of its portfolio through portfolio changes. To achieve the climate goals, the companies that AP4 invests in must also reduce carbon emissions in their own respective operations. In our ownership role we are directly engaging with companies, and cooperates with other investors to broaden knowledge about how the climate issue can be addressed in the asset management operations.

So what is exactly the approach you take there?

Our fundamental approach to global equities management in resource intensive sectors entails that we are concentrating our holdings in carbon-intensive sectors to far fewer companies than previously (for example, we have reduced the number of energy companies from more than 50 to around 10). This, in turn, gives us the opportunity to be an even more active and demanding owner and thereby making a contribution to ensuring that the positive development continues in the companies that we continue to have ownership in.

To further wield influence as investor in global equities, we partner with other investors in organisations and initiatives such as Climate Action 100+, which aims through investor dialogues with companies to influence them to reduce their greenhouse gas emissions and thereby slow climate change, and the Transition Pathway Initiative (TPI), an investor-led initiative that urges companies to reduce their greenhouse gas emissions and transparently report on this work in accordance with the Task Force on Climate-related Financial Disclosures (TCFD).


"We believe that taking responsibility does not mean refraining from investing in companies only because they are active in sectors with significant climate challenges."

Niklas Ekvall

Finally, you mentioned earlier 'electricity is the engine of the energy transition', can you tell us a bit more about that?

One prerequisite for a successful climate transition is to prioritise and significantly accelerate the build-out of generation, distribution and storage of fossil-free energy, most notably electricity. This is indeed the actual engine in the transition, regardless of whether we are talking about replacing existing power generation or new applications for the transition of transports as well as for most other climate-intensive industrial sectors.

The need for a significant and rapid expansion of supply of fossil-free energy and electricity has historically received too little scope in the discussion about what is needed to successfully be able to live up to the ambitious climate goals of the Paris Agreement. Building out the supply of fossil-free energy sufficiently quickly requires a mobilisation from the political system as well as from the business sector and institutional capital. Given the long lead times from decision to real capacity, this needs to be done now.

In this context it is therefore gratifying that the supply side has also gradually begun coming more into focus in the debate in several key parts of the world, which also includes the USA through the passage of the Inflation Reduction Act. I hope that this is just the beginning of a structural shift in focus to what is necessary to bring into place, so that politicians, the business sector and society in general can work together to ensure a sufficiently fast and extensive build-out of supply of fossil-free energy and electricity.

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