Nature, with its resources and ecosystem services, is essential for human existence and for all economic activities. ”Biodiversity – diversity within species and between species and ecosystems – is diminishing more rapidly than ever before in the history of humankind, with extensive and irrevocable consequences. There are strong links and dependencies between the focus areas of biodiversity, climate and human rights, which means that AP2 chooses to address these issues from a systemic perspective.

Longterm goals
AP2 will contribute to net positive development for nature by 2030 at the latest
AP2 has defined the above as a long-term goal for its work on biodiversity. This goal is in line with the global commitment that is required, combined with reduced emissions, to limit global warming to 1.5 degrees and to preserve critical ecosystems.

The Fund has also set a more specific overall goal with focus on deforestation, which is a key driver of biodiversity loss:

By 2025, AP2 shall have a portfolio that does not contribute to deforestation
This goal is in line with the commitment to a deforestation-free portfolio made by AP2 in connection with COP26, and with the Fund’s climate commitment to net zero greenhouse gas emissions by 2045.


In view of the extent and complexity of the biodiversity area, it is necessary for AP2 to set priorities for its work. This takes place according to a risk analysis under the principle of double materiality, taking account of both the dependence of the assets on and the impact on nature.

IPBES’ report from 2019, summarising the status of research in the field of biodiversity, identifies the five main direct causes of biodiversity loss:

  • Land and sea use
  • Direct exploitation
  • Climate change
  • Invasive species
  • Pollution

AP2 has applied these areas to its risk analysis in order to understand how the Fund is exposed to them through its holdings. The analysis was based on the ENCORE database, developed by the Natural Capital Finance Alliance and UNEP-WCMC2, the UN’s environmental programme. Based on the analysis, the Fund will initially focus on land use, and in this area more specifically on deforestation. According to the IPBES report, land use is the biggest cause of biodiversity loss, and AP2 has holdings that potentially have a major impact. Furthermore, from a systemic perspective the issue is highly relevant for AP2’s focus areas of climate and human rights. After a more in-depth analysis of the Fund’s exposure to land use, based on dependence and impacts, the work will commence with a focus on the food and forestry value chains within the asset classes of timberland and farmland, as well as listed equities.

AP2 has undertaken by 2025 to have a portfolio that does not contribute to deforestation, and work is under way to live up to this commitment. The fund’s listed holdings are examined to identify companies with a high risk of deforestation, with a special focus on the value chain for food in the first step. Companies identified as having a high potential impact on deforestation are ranked according to their management of the deforestation risk and the Fund’s engagement work is prioritised on the basis on this analysis. If a company, after attempts at engaging in a dialogue, is judged unwilling to work towards deforestation-free operations, the Fund may decide not to invest in the company.

Within AP2’s investments in the timberland and farmland asset classes, the work to promote biodiversity has been under way for many years and is an integral aspect of the dialogue with the Fund’s managers. To minimise negative impacts, AP2’s managers apply well-established, scientifically designed forestry and farming practices. The Fund’s timberland managers must be certified in accordance with international standards, which require management of entire ecosystems and zero tolerance of deforestation.


The impact work is based on a list of prioritised companies that have been identified as having high exposure to deforestation and whose risk management is assessed to be weak. AP2’s policy on deforestation and land use serves as a document of expectations, and the dialogues are followed up in relation to this. The dialogues are to a great extent conducted in collaboration with other investors.


AP2 is active in a number of investor partnerships within biodiversity and deforestation.

  • Finance Sector Deforestation Action (FSDA) is an engagement partnership between investors committed to a deforestation-free portfolio. Within the framework of this cooperation, dialogues are held with a number of companies with a high risk of deforestation. Since 2023, AP2 has been actively participating in this dialogue work, with a leading role in several dialogues.
  • AP2 is a member of the Finance for Biodiversity Foundation, which gathers investors around five commitments and contributes to process development in the area.
  • Nature Action 100 is an investor partnership for dialogue with 100 companies with a major negative impact on biodiversity. AP2 is a founding participant and has undertaken to take a leading role in some of initiative’s dialogues.
  • AP2 participates in the working group for Brazil within the Investor Policy Dialogue on Deforestation (IPDD), which seeks to create dialogue on deforestation with politicians and decision-makers in key countries.


  • AP2 reports in accordance with the Taskforce on Nature-related Financial Disclosures (TNFD) framework. The Fund has participated in the focus group in developing this framework.
  • One challenge in working with biodiversity is to find suitable key figures, measure progress and integrate effects on ecosystems into financial decision-making. AP2 is therefore a partner of the BIOPATH research project, which is funded by Mistra (Swedish Foundation for Environmental Strategic Research). BIOPATH will work with its partners to map, evaluate and co-develop existing and new approaches to integrate biodiversity into financial decision-making.