Climate change entails significant financial risks, so we focus on reducing and stopping climate change as a means to generating good returns on our customers’ savings. We therefore discuss climate issues with companies.
The climate agenda and the energy transformation are causing changes within the energy sector, and we engage with a number of energy companies in relation to how this affects their business and how they approach these changes. From an investment point of view, we believe that companies which are transforming their business to focus on energy sources with less climate impact are the best investments in the long term. Based on developments in society, energy legislation and consumer trends, these companies will be in a position to generate long-term value. If companies continue to focus on traditional energy sources without reducing their level of carbon emissions and do not consider the transition towards green energy, we believe that they will be poor investments in the long term.
An example of this is Royal Dutch Shell, one of the world’s largest energy companies, with which we discuss their efforts to reduce their climate-related business risks and their transition towards more efficient energy production. In recent years, Shell has revised its long-term strategy and presented a goal to cut its carbon intensity by 50%. We engage with the company both to ensure that it delivers on its strategy but also to discuss potential strategic challenges along the way. We also engage with Shell through our membership of the Institutional Investors Group on Climate Change (IIGCC), which is in an ongoing dialogue with Shell. Most recently, Shell decided to cancel its membership of the American Fuel and Petrochemical Manufactures to ensure consistency between its own climate focus and the climate policy of the organisations it is a member of. Another example is our engagement with the Italian energy company Enel, which has increased its share of green energy and reduced its activities within fossil fuels over a numbers of years. In addition to this, it also has a clear future strategy aiming at reducing its climate impact.