AP2 continued to work intensively to integrate sustainability into its management activities in 2019. The Fund approaches the issue of sustainability based on the conviction that sustainability results in better management results, and thus in a better income pension system and a better deal for pensioners. AP2 has on several occasions acted as a pioneer, for instance when it comes to investment into green and social bonds, sustainability requirements in agreements entered into with private equity funds, divestments from fossil energy companies, reporting in accordance with TCFD and, most recently, in accordance with UNGPRF.
“One issue that has strongly characterised 2019 has been sustainability. Overall interest in sustainability issues is on the rise, in part as a result of the climate change focus being raised by Greta Thunberg, but also due to more frequent publication of research reports on climate issues. Equality and human rights are other matters increasingly at the forefront of discussions,” says Eva Halvarsson, CEO of AP2.
“For AP2, sustainability issues are closely linked with our mission to create high returns for Swedish pensioners. We have spent a long time developing the way that we work with sustainability, and this is something which strongly characterises our organisation. It is also something that we tend to earn recognition for on an international level. I hope that those stakeholders that take a great interest in — and express views on — how we run our business are also prepared to take the time to truly understand our mission, the considerations we need to balance and how the business de factor operates,” says Eva Halvarsson.
Key events during the year
- During the year, the Fund developed a new sustainability strategy as well as revised investment beliefs which highlight sustainability. The Fund has also developed a new corporate governance strategy.
- With the support of the changes to the legal rules for the AP Funds regarding exemplary fund management, the Fund divested from a total of about 60 tobacco companies and companies involved in the maintenance and modernisation of nuclear weapons systems in 2019.
- In 2019, AP2 included climate risk into the Fund’s overarching return assumptions, and this serves as the basis for strategic portfolio decisions.
- In 2019, AP2 increased the strategic weighting of green bonds from 1.0 to 3.0 per cent of the total portfolio.
- For the second year in a row, AP2 published a report in the month of February in accordance with the framework of the Task Force on Climate-related Financial Disclosures (TCFD). The TCFD report is included in this year’s sustainability report.
- Also in 2019, AP2 became one of the first investors in the world to publish a report on the Fund’s human rights work in accordance with the framework for the United Nation’s guiding principles.
- The UN Principles for Responsible Investment (PRI) have included AP2 in its Leaders’ Group 2019. This group includes capital owners that PRI identifies as leading when it comes to selecting external managers for listed equity and/or private equity. AP2 has been named a leader in both these categories.
- The carbon footprint of the Fund’s listed equity portfolio has shrunk by half in the space of two years.
The English version of AP2’s Sustainability Report 2019 will be available at www.ap2.se from beginning of March.
For more information, please contact:
Eva Halvarsson, CEO of AP2, +46 (0)31 704 29 00 or
Ulrika Danielson, Head of Communications and Corporate Governance, +46 (0)709 50 16 13.
AP2 is one of five buffer funds within the Swedish pension system and one of northern Europe’s largest pension funds. The Fund’s assets under management total SEK 381.3 billion (31 December 2019), and cover essentially all asset classes across the entire world. We are leading specialists on the Swedish pension system, and we strive to be a world-class asset manager. We are a global leader when it comes to integrating sustainability into our investments, for the benefit of the pension system. The Fund is a long-term, responsible, asset management company. www.ap2.se