Retirement funds face huge losses after being exposed to high-risk green projects

Eighty kilometres from the Arctic Circle, Europe’s decarbonisation dream is falling apart.

Icy towns in Sweden’s far north have found themselves at the centre of a “green rush” fuelled by promises of a new industrial frontier grounded in the clean energy revolution. The Telegraph has the story.

The Swedish government has channeled billions in pension fund savings into start-ups in the region – including the first steel mill to be built on the continent for half a century.

But after years of grandiose rhetoric, those promises appear to be disintegrating.

Two of the country’s flagship green manufacturers have run into serious financial difficulties, sparking a row over potentially eye-watering pension fund losses.

The challenges in Sweden serve as a stark warning to Rachel Reeves, the UK’s Chancellor, who is considering forcing large pension funds to invest in national assets in a bid to boost Britain’s struggling economy.

Industry leaders have warned that the move would put the Government’s objectives of the day ahead of the retirement prospects of millions of savers.

Funds exposed

Sweden helped pioneer the strategy of mobilising deep capital markets and pension funds to help finance government development goals. Unlike in Britain, a portion of Swedish workers’ state pension contributions are invested in government-controlled funds.

In the run up to the Paris Agreement, Stefan Löfven – the former Social Democrat prime minister who led a coalition government with the Greens – promised a “new green industrial revolution” that would be “as transformative as the one 250 years ago”.

Read the full story here.