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Oil report

UPDATE 1-Institutional investors can be game changers on climate - Swedish fund

(Adds background, fund manager quotes)

PARIS, Dec 7 (Reuters) - Momentum among institutional investors to divest from carbon-intensive companies is picking up, making them potential game changers in curbing emissions, the head of a Swedish state pension fund said on Monday.

His comments at a business forum on the sidelines of the UN climate summit in Paris came as a number of big pension funds said they were actively seeking to buy into renewable energy or companies that reduce their climate risk, and in some cases are working with governments to promote green spending.

“Institutional investors as the universal owners of corporations, and as the largest pool of capital, are entering the game,” said Mats Andersson, chief executive officer of the Swedish national government pension fund AP4, which has 276 billion ($32 billion) under management.

Another fund, AP2, said last week it had divested from coal-fired power utilities.

Such investors “have also started to rid their large core and mainstream investment portfolios of the risks linked to climate change and, in particular, the risks associated with the transition to a low-carbon economy,” Andersson told the forum.

Saker Nusseibeh, CEO of Hermes Investment Management with 29.5 billion pounds ($44 billion) under management and 146.6 billion under advice, said “smart money” in the investment community was going green.

“We are underweight fossil fuels, we are underweight on companies with a high carbon footprint,” Nusseibeh told Reuters.

Torben Moger Pedersen, who heads PensionDanmark with a total asset base of $25 billion, said the group had significantly increased its exposure to wind, biomass and solar power over the last five years. “It is 10 percent of our total asset base,” he told Reuters.

Also in Paris on Monday, two institutional investors, German insurer Allianz SE and ABP, a pension fund for Dutch government and education sector workers, jointly said they will join a group of investors who have pledged to fight climate change through their investments.

Launched last year, the group called Portfolio Decarbonization Coalition (PDC) now includes 25 institutional investor currently overseeing the gradual “decarbonisation” of assets under management worth $600 billion.

“Climate change requires fast and collective action and continued commitment for decades to come,” Oliver Baete, CEO of Allianz, said.

($1 = 8.5232 Swedish crowns)

Editing by David Holmes

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