Ett åkerlandskap med en cyklist. Längre bort syns ett vindkraftverk.
Foto: Nille Leander /Ikon

Sustainable investments 2020

Performance in 2020 including bank and management fees amounted to SEK 493 million (1,582 million the previous year). Returns for the overall portfolio amounted to 4.2% (19.1%) This is 0.8 percentage points lower than our benchmark index but 0.7 percentage points higher than the real rate of return target.

This is the tenth year in a row that the Church of Sweden has published a report on its work with sustainability issues in asset management at the national level.  The report has been produced by the financial staff after consultation with the Central Board Asset Management Council. Asset management in dioceses, parishes and congregations are not included in this report.

Sustainable investment activities are carried out throughout the Church of Sweden.

Find out more about our sustainable investments here


The year in brief 

To a great extent, the year has been characterised by the Covid-19 pandemic and the measures taken to stop its spread or at least limit it. When summarising 2020, the effects on the real economy have been plain with a clear, historically dramatic fall of the GNP in most countries.  The enormous support packages made available by central banks and governments the world over, however, stimulated the relatively quick recovery of capital markets after the dramatic fall in March. Subsequently, markets were then able to begin focusing on the future. The stock market's plunge was followed by an unexpectedly rapid recovery that continued during the autumn and into the next year which also resulted in new records being set in stock markets. What the long-term effects of the pandemic and the gigantic support packages provided are, is as of yet unknown and remain for the future to reveal.

The perception that we can soon return to “business as usual” thanks to the rapid, record setting development of vaccines, however, may only be wishful thinking. The variety of the Covid virus mutations and new pandemics, and perhaps learning to live with them and master globally, are circumstances that are going to be with us for the foreseeable future.

The Church of Sweden’s portfolio, as all others, suffered when the stock markets fell sharply and we, on the Church of Sweden’s national level, received very many questions from worried congregations about how they should deal with the situation. Overall, it seems most of the congregations took actions with the long-term in mind, took their anxiety in stride, remained calm without taking hasty actions, and maybe even found opportunities for investment for when price levels quickly changed.

Asset management results for this dramatic year ended up being SEK 403 million which corresponds to a return of 4.2%.  However, we are happy to report that the portfolio has managed to meet the long-term target set in 2000.


During the year, to reduce concentration risk within global equities we decided to invest in two, new global funds while at the same time somewhat reducing allocations to existing funds. The two new funds have a clear sustainability orientation. One of them is called the Global Sustainability Fund and is managed by Mirova. The other one is called Global Equity UCITS Fund and is managed by Ownership Capital. Both investments have been available since the first quarter of 2021.

Generation Investment Management in any case still remains our largest fund manager of global equities and they have for over a ten-year period inspired our sustainable investment activities while at the same time been very successful financially.


For a number of years, the Church of Sweden has worked to promote investments in clean water and sustainable cities through the investment network, Swedish Investors for Sustainable Development’s (SISD) aim is to further investment within the framework of the United Nation’s 17 Sustainable Development Goals. During 2020 we actively worked to create conditions for the development of a larger offering of financial products more suitable for larger investors such as pension managers and insurance companies. One action we took, among others, was to send a letter to the Riksdag's Finance Committee regarding the Government's bill on Agenda 2030 on global, sustainable development and how we want to invest in it.

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En elbil från Svenska kyrkan står och laddar.
Foto: Katarina Sandström Blyme /Ikon

Commission, asset management model and follow-up

The commission given to us by the Central Board of the Church of Sweden expressly focuses on the long-term performance of asset management for the Church of Sweden at the national level.  The overall target return is 3% per annum above inflation measured in rolling ten-year periods.

The model we employ in our asset management to achieve this target consists of the allocation of capital, i.e. distribution among asset types, as well as choice of fund manager and follow-up.

The rate of return target in real terms which was set in 2000 at 6% per annum, was then lowered to 4% per annum and has since 2010 been at 3% per annum.

Read more about our asset management

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Financial development in the long-term

From a ten-year perspective our portfolio is robust. Between the years 2011-2020, the accumulated return was 116.2%, corresponding to an average return of 8.0% per annum. The return target for the same period was 47.3%, corresponding to 4.0% per annum (see Figure 1 below).

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Diagram 1 - Actual returns, target return and inflation

Diagram - Actual returns, target return and inflation.

Asset management has exceeded the return target eight of the last ten years. The outcome for individual years can of course vary greatly, as can be seen from the bar chart (see Figure 2 below).

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Diagram 2 - Target return and actual returns since the beginning of the period

Diagram - Target return and actual returns since the beginning of the period.


Part of the agreement made between the Church and the national government in the 1990s was to transfer the capital previously managed by the Legal, Financial and Administrative Services Agency (Kammarkollegiet) from the state to the Church of Sweden in connection with the coming change in relations in 2000.

Thanks to the portfolio’s strong results in recent years, returns have now, after 21 years, also caught up with the return target for the same period. The accumulated return at the turn of the year was 164%, while the target return was 165%, corresponding to an annual return of 4.8% since the conclusion of 1999. In real terms, it has yielded an annual return of 3.5% since 2000. The very weak stock markets in 2001, 2002 and 2008 are the primary reason behind the muted return during the first decade in the 21st century (see figure 3 below).

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Diagram 3 - Target return, actual returns and benchmark index

Diagram - Target return, actual returns and benchmark index.

Result, return and assets 2020

The result for 2020 for the Church of Sweden's asset management at the national level amounted to SEK 403 million. This corresponds to a return of 4.2% (benchmark index 5.0%).

After eight years in a row where the return exceeded the weighted reference portfolio’s benchmark index, the return for 2020 was slightly lower than this index, i.e. 0.8 percentage points.

The main reason for this development in 2020 is the continued overweight we had in global equities compared to Swedish equities, in combination with an increasingly stronger Swedish Crown during the year. When the value of our global equity mandate is converted to Swedish Crowns for 2020, the return has been significantly below the return in the Swedish equity portfolio.

The market value of the assets invested as of 31 December 2020 amounted to SEK 9,909 million (previous year SEK 9,626 million). In December, a withdrawal of SEK 120 million from the portfolio at the Church of Sweden’s national level was made for the purposes of liquidity management.

Allocation based upon a strategic reference portfolio

To create pre-requisites making it possible to achieve the long-term target we use a strategic reference portfolio that we then also use as a reference portfolio when evaluating our asset management against the ten-year time horizon.

Depending on how the different markets develop, the distribution, i.e. allocation, among the asset classes in our portfolio, is constantly changing.

The allocation between the asset classes is shown in Figure 4, the return per asset class, Table 1 and the largest shareholdings in Table 2.

 Equity management

Equity management contributed with SEK 315 million net. Ethos' Equity Fund, which is managed by SEB, had the highest return among Swedish equities, with 17.3% (index 14.8%). Generation IM Global Equity Fund had the highest return among global equities and emerging markets with 5.9% (index 1.9%). The managers in the asset classes global equities and emerging markets as a group performed considerably higher than their respective benchmark indices (1.6 and 1.4 percentage points, respectively). Swedish equities as an asset class, on the other hand, was 3.8 percentage points lower than the index.

Fixed income investments

Swedish fixed income management yielded a 1.7% return, which is 0.4 percentage points higher than the index. Falling interest rates were the main reason why the index for Swedish interest rates rose by 1.3% during the year.

Corporate bonds, especially in the slightly higher risk segments, were hit hard in the initial phase of the pandemic resulting in negative price development and poor liquidity.

Real estate

The real estate asset class contributed with a 6.7% return (index 3.5%). However, the return is largely based on annual, external valuations of the holdings in the various real estate funds in which we have invested. These valuations are made annually but are often determined well into the first quarter, which is why there is a lag of one year in valuation development. The return for the 2020 result therefore includes the valuation as of 31 December 2019.

Alternative investments

Alternative investments yielded a negative return of 3.3%, which is significantly lower (6.8 percentage points) than the absolute return index on the KPI + 3% we use for properties and alternative investments. As inflation (KPI) ended up at 0.5% for 2020, the index became 3.5%. The majority of the holdings in the asset class showed red figures for 2020. A large part of this can be explained by a stronger Swedish Crown, especially against the US dollar. As previously stated, however, the current valuation of primarily equity-related investments, and to a large extent also illiquid assets, can often be associated with a great degree of uncertainty. In the vast majority of our holdings within this asset class, one has to wait until maturity before the result can be determined.

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Diagram 4 - Division between asset classes 31 December 2020

Division between asset classes 2020.

Table 1 - Result and return 2020 per asset class and a five-year overview

Result and return 2020.

Table 2 - Our largest holdings in equities 2020

Our largest holdings in equities 2020

Some Important Perspectives on Sustainability - 2020


The earth is warming up at an ever-increasing rate and 2020 stands out as one of the three warmest years on record since humanity began relying heavily on fossil fuels as a source of energy. The other two years were 2016 and 2019 and the last decade has so far been the warmest ever. The average global temperature during the year was about 14.9 °C , which is approximately 1.2 °C warmer than in pre-industrial times (1850-1900).¹

In spite of this, and since the Paris Agreement was concluded in 2015, a large number of new projects to extract new fossil energy (coal, oil and gas) have been started. According to the UN, the world is now moving towards a three-degree higher average temperature than before industrialisation. According to the Intergovernmental Panel on Climate Change (IPCC), if the 1.5-degree target is to be reached, emissions must be halved within 10 years, i.e. by 2030.

At the same time, extensive work is underway in the financial industry to develop new products that are in line with the Paris Agreement and that contribute to climate change. An example is renewable energy, where costs are constantly falling as technology develops.² The transport sector is another area that is developing rapidly and gives rise to investment opportunities, as both cars, buses and trucks are becoming increasingly electrically driven. Technological development in the area of hydrogen-based fuel is also progressing rapidly.

The Church of Sweden's equity portfolio is characterised by having a low climate impact and being in line with the Paris Agreement. There are several companies that clearly contribute to climate change, among them Asian Gogoro, which allows owners of electric scooters to subscribe to access to batteries that can easily be exchanged at a local charging station outside a, e.g. neighbourhood market, instead of charging it themselves. Another is Vestas, a world-leading wind power company from Denmark. A third example is Swedish Nibe, which is a leader in Europe in heat pumps and offers solar panels and other technical solutions that reduce customers' energy use.

The Church of Sweden divested its investments in coal and oil as early as 2008-2009 (the last company in natural gas in 2014) to reduce risk and reorient the portfolio towards climate solutions. We work together with other investors to stimulate the development of a greater variety of solutions-oriented investment products that function well for larger, institutional investors who often want large volumes and low risk in their investments. We are going to see more intensive cooperation in the future between investors, development banks and nations to achieve the goals of the Paris Agreement.


A major issue for investors who have long lived in the shadow of the climate issue is the rapid loss of biodiversity. Animals and plants are seeing their habitats disappear all over the earth as humans lay claim to more and more natural resources and land.

Many investors, including those in Sweden, are now focusing on the issue and considering how they can best use their capital to increase biodiversity while at the same time reducing the risk in their investments. An example of this is the Taskforce on Nature-related Financial Disclosures (TNFD) which was formed in 2019 and will lead to a framework for companies and investors to assess, manage and report their impact and dependence on natural resources, and redirect global financial flows from having a negative impact on the environment to having a positive impact on the environment.³ The model is taken from the model developed for the climate through (TCFD).⁴ Our new manager Mirova is a member of this working group, as is Robeco (which manages the fund Ethos Global Read more in the links below.

The Church of Sweden has long been investing in the Althelia Climate Fund, which preserves rainforests and biodiversity while giving people increased income through sustainable use of the forest and land.


¹ warmest-years-record

² teknik/nyheter/nybyggnation/utbyggnaden-i-storbritannien-pa-god-vag


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More about our sustainable investments

All of the Church of Sweden’s activities are permeated by long-term thinking and sustainable development for humans and the environment. Therefore, it is obvious that our investments must also be compatible with these values. How this is to be done is expressed in the Church of Sweden's financial policy established by the Central Board. This policy is based upon two fundamental values; the concept of stewardship and the principle of human dignity.

Download our financial policy. 

Find out more about our sustainable investments here

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