The fund intends to invest the money over a three year period, with 50 per cent of the mandates going to global companies and the other half to Nordic firms. It will begin tendering by the end of the year and envisions investing in these companies via fund of funds created by private equity firms. AP 7 estimates it will invest in about 150 companies overall.

Mr Gröttheim said the move was made because the fund believes environment and global warming issues are creating a situation where companies paying attention to these areas will earn large profits.

He also indicated it was highly probable that the fund would eventually invest far more than the initial SKr3bn in environmentally friendly firms. “For the moment this amount is what we’re looking for and you need to take care when investing in this, but if the market grows, which I think it will, I don’t want to rule out the possibility of further investments,” he said.

He added that on the listed side there were companies in these types of environmentally friendly industries that were over-valued, but pointed out that on the unlisted side there were more possibilities. He acknowledged that there were risks involved, but is convinced that these risks are decreasing every day.

The move will also see the fund’s private equity allocation increase from 6 per cent to 8 per cent, which will be achieved by selling off some of its global equities.

AP 7 has already invested SKr250m in an environmentally-friendly index created by Impax Environmental markets.

Mr Gröttheim will be acting executive president from 1 January 2008 while Peter Norman is on a six month-long paternity leave. SA

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