During the first half-year 2020 AP2 continued to work intensively to integrate sustainability into its management activities. The Fund approaches the issue of sustainability based on the conviction that sustainability results in better management performance, and thus in a better income pension system and a better deal for pensioners.
AP2 has decided to publish a separate report on the Fund’s sustainability work for the first half of 2020. The reason for this is that the Fund strives to be as transparent as possible and there is constantly a great deal going on in the field of sustainability. The report presents the work based on the Fund’s four sustainability focus areas: climate, corporate governance, diversity and human rights.
“During the first half of 2020, the Fund’s sustainability work was impacted to a certain extent by COVID-19, which mainly affected attendance at general meetings, but also proposals for dividends and board fees,” says Eva Halvarsson, CEO of AP2.
“One area with major need for investment is sustainable infrastructure, as energy and transport systems need to implement a rapid transition from fossil-based to renewable resources. At the end of 2019, we decided to invest in sustainable infrastructure, that is, assets that contribute to sustainable development in line with the Paris Agreement. Two investments were carried out in the first half of 2020,” says Eva Halvarsson.
Key events during the half-year
- In May, AP2, together with 176 other investors, signed an open letter to EU leaders with recommendations aimed at supporting a sustainable economic recovery after COVID-19. The recommendations are that the EU must deliver a recovery that prioritises climate action needed for achieving the Paris Agreement’s target of net zero emissions by 2050.
- At the end of June, AP2 and just over 30 other investors wrote an open letter to the Brazilian Embassies in the investors’ respective countries because of concerns about the increasing deforestation of the Amazon and its negative effects on the climate, biodiversity and the rights of indigenous people. The initiative has attracted a lot of attention, not least in Brazil. In July, investors, including AP2, held meetings with both representatives of the Brazilian government and the Vice President, and with the Speaker and representatives of Congress. The initiative is led by Storebrand.
- The equity portfolio’s carbon footprint continues to decrease, both in absolute and relative terms. The reduction in total carbon emissions is mainly due to reductions in emerging markets. It is positive that both the portfolio and the companies have reduced their carbon footprint. Portfolio-weighted carbon intensity fell by no less than 15 per cent. Of the decrease, 11 percentage points were attributable to changes in holdings and four percentage points to changes in companies.
- This year, the Fund decided to increase its voting power in global companies from the previous total of 750 to 1,000 companies. In the first half of 2020, AP2 voted at 844 foreign general meetings. AP2 also voted in 92 Swedish general meetings during the first half-year 2020.
- In spring 2020, the Fund has worked on clarifying its preference and governance for its human rights work in order to ensure a sustained focus on prioritised issues. The work has resulted in the revision of AP2’s policy for human rights, the preparation of a strategy and the adoption of a long-term goal up to and including 2025.
The complete version of AP2’s Sustainability Report for the half-year is available at www.ap2.se.
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 357.9 billion (30 June 2020), and cover essentially all asset classes across the entire world. We are leading specialists in 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 and responsible asset manager. www.ap2.se