Strategic Compass Reset: Charting a New Course for Organizational Growth
Fellesordningen for AFP initiated a strategic process in the fall of 2024, concluding in early 2025, to define clear priorities for the organization’s future development. This initiative aims to build a more robust and forward-looking organization, equipped to handle growth and increased demands for control, quality, and security. The reason for this change is to adapt to the evolving pension system and ensure continued solid growth. (Source: Årsrapport 2024, page 4)
Investment Philosophy Anchored: Long-Term Vision Guides Portfolio Resilience
Fellesordningen for AFP’s investment philosophy is rooted in its identity as a long-term investor, capable of withstanding asset value fluctuations without being forced to reduce portfolio risk unnecessarily. The fund aims for a diversified portfolio, prioritizing risk-adjusted returns and responsible investments. This approach is designed to achieve the highest possible return within the framework of its capital management strategy and investment mandate. (Source: Årsrapport 2024, page 7)
Strategic Asset Allocation Maintained: Stability Amidst Market Optimism
As of the end of 2024, the strategic asset allocation remained consistent with previous periods. The allocation targets are 4% in Money Market, 26% in Bonds, 60% in Equities, and 10% in Real Estate. The actual allocation at year-end 2024 was 59.5% in equity funds, 4.9% in money market funds/bank, 26.3% in bond funds, and 9.3% in real estate. This aligns with the board’s adopted strategy. The reason for this allocation is to achieve high expected long-term returns through significant equity allocation, while bonds provide stability. (Source: Årsrapport 2024, page 7, 14)
Responsible Investment Framework: ESG Integration and Exclusionary Practices
Throughout 2024, Fellesordningen maintained its strategy for responsible investment, integrating environmental, social, and governance (ESG) factors into its management. The objective is to achieve good long-term returns with an acceptable risk level, contribute to sustainable development, and avoid contributing to human and labor rights violations. The fund employs dialogue and follow-up with companies, and adheres to the same exclusion list as the Norwegian Government Pension Fund Global. This includes avoiding investments in gross corruption, severe environmental damage, serious human rights violations in conflict situations, tobacco production, mining companies and power producers deriving 30% or more of their income from thermal coal, unacceptable greenhouse gas emissions, and other particularly serious breaches of fundamental ethical norms. The fund also explicitly excludes investments in controversial weapons and gross or systematic violations of key UN and ILO conventions on human and labor rights. (Source: Årsrapport 2024, page 9, 14)
Portfolio Transparency: Underlying Holdings Scrutinized for ESG Compliance
As of December 31, 2024, the pension fund’s underlying positions were screened using MSCI ESG Research, in accordance with adopted guidelines. Two companies in three of the portfolio’s global equity funds were identified with ‘red flags,’ indicating involvement in severe ESG-related incidents requiring monitoring. No breaches were detected. (Source: Årsrapport 2024, page 9, 14)
Carbon Footprint Reduction: A Step Towards Climate Resilience
In 2024, Fellesordningen continued to assess the pension fund’s exposure to climate risk. Measurements indicate that the AFP fund has a lower carbon footprint than its reference index, suggesting reduced exposure to carbon-intensive companies and climate-related risks. (Source: Årsrapport 2024, page 14)
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