Interview with Andrejs Landsmanis

Andrejs Landsmanis, Head of Strategic Asset Allocation at Första AP-fonden, about the
conclusions of the “Climate Change Scenarios – implications or Strategic Asset Allocation”
study that Första AP-fonden has taken an active part in.

What are your main conclusions from this study?

That climate change is an important factor. We believe that it has implications for our
portfolio and that it needs to be taken into consideration in our asset allocation
process.

What does that mean in concrete terms? Will you focus on other types of
investments?
Part of our strategic review consists of an environmental analysis and to the extent that
this analysis indicates that we should realign our investments, we will do so.

Can you provide some examples?

We have already indicatively determined that we can invest more in agricultural land
and timberland. It is consistent with the overall profile we are aiming for and the
findings in the report underline this conclusion. We have thus been given an even better
argument and basis for making these investments.

So you plan to buy more farms and forests? Will Första AP-fonden become an estate
owner?
This will be done in a structured manner. We will do investments in different ways, we
will not invest in individual properties.

Does your participation in the study mean that you are taking a position on whether
or not climate change exists?
We are taking position to the extent that we see climate change as a genuine risk that
we need to be aware of our strategic discussions and future investments.
Have you overlooked environmental and climate issues in your earlier reviews?
No, but this time we have a much more structured and effective approach than
previously.

What about oil companies, will you eliminate them from the portfolio?
It is possible that the cost of oil extraction will increase as a result of higher taxes or
stricter requirements in many countries, and the oil companies need to plan ahead so
that they can manage these changes and continue earning money. But it is too early to
say in detail how this will affect our investments in individual sectors.

But don’t they have a negative climate impact?

We can’t answer that at present. It is part of a large-scale analysis of how the oil
companies affect the climate and whether we should take this into account in asset
pricing and risks in our portfolio. We are currently looking at this and will have to get
back to you with our views on investments in oil companies.

What has the report cost you?

It has cost us a few hundred thousand Swedish kronor to take part, but it would have
cost far more to do it on our own. By joining forces with a number of investors and
Mercer, we have been able to carry out a really in-depth analysis. I am convinced that
the costs are small in relation to the future advantages (value) this will generate for us.

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