AP2’s climate report based on TCFD’s recommendations

By: The Second Swedish National Pension Fund - AP2

Reporting against the TCFD’s recommendations.


What was the initial approach used?

In the autumn of 2017, AP2 started implementing the TCFD recommendations. AP2 has used the suggestions given in the TCFD recommendations to analyse its climate work, both with regard to industries generally and the specific guidance given to asset owners. AP2 wanted to start reporting as soon as possible, both for the sake of our own learning but also because we want to know what we are talking about when we engage in dialogues with companies.

What were the barriers, and how were they overcome?

We did not encounter any specific barriers to start reporting according to the recommendations. As climate and reporting/transparency are two of AP2’s focus areas, and AP2 had already in July 2017 publicly supported the TCFD’s recommendations, this work had the support from the AP2’s executive management. An other important element was that AP2’s TCFD group consisted of key persons from strategy, asset management, risk and ESG departments.

In the future we might encounter barriers related to, for example, data availability, finding relevant metrics and appropriate way to perform scenario analysis. It will take several years before AP2 will meet all the recommendations.

Further insights

The TCFD recommendations are well structured and easy to work with. The framework also provided an external view on AP2’s the climate work and helped us identified gaps in our work and suggestions for next steps.

An advice is to start working towards and reporting against the recommendations with the climate work your organisation is doing. Don’t wait until your organisation is able to fulfil all the recommendations.