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Austria’s pension system continues to face climate, investment performance challenges
Research - OCTOBER 11, 2024

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Austria’s pension system continues to face climate, investment performance challenges

by Kali Persall

Pensionskassen, Austria’s company system, faces large challenges in terms of investment performance and climate goals, according to  a recent report from the Austrian Financial Market Authority (FMA) on the state of the system in 2024.

As large institutional investors, Pensionskassen have a material role in the battle against climate change, according to the report. Yet the proportion of assets that are damaging to the client in their portfolio still stands at 26 percent — down only 2 percent from 2023 — primarily in the fossil fuels and real estate sectors.

The FMA has performed a new climate stress test on Pensionskassen in 2024, this time in accordance with the standards stated in the European Commission’s Fit for 55 Package. The baseline scenario resulted in a value loss of –3.5 percent, the first adverse scenario by –5.8 percent and the second adverse scenario one of –16.1 percent.

In addition, in light of its long-term investment horizon, as

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