AP2 has signed on to The Investor Agenda’s 2021 statement calling on all governments to increase their climate policy ambition by #COP26 in November.

Read The Investor Agenda’s pressrelease.

4 to 1 Investments KB, a company owned jointly by the Swedish National Pension (AP) Funds (AP1, AP2, AP3, AP4), is investing USD 400 million in Northvolt by participating in $2.75 billion private placement.

Northvolt is planning for large-scale manufacture in Europe of lithium-ion batteries for electric vehicles, and has entered into partnerships with Volkswagen, BMW, Scania and others. Among other things, the new share issue enables completion of the company’s first battery production plant in Skellefteå, northern Sweden. Northvolt was founded in 2016 and currently has approximately 1,700 employees.

Kristin Magnusson Bernard, CEO of AP1, Eva Halvarsson, CEO of AP2, Kerstin Hessius, CEO of AP3 and Niklas Ekvall, CEO of AP4, have jointly issued the following statement:

“The AP Funds are jointly financing an important long-term industrial project in Sweden. The investment is fully in line with the AP Funds’ long-term strategy of investing in companies that we deem to have good future financial prospects. With the AP Funds’ long-term remit and Northvolt’s important role as a transformative force in the global climate transition, we believe this investment will make a positive contribution both to the pension system and to society at large. We are making the investment in the jointly owned AP Fund company, 4 to 1 Investments.”

For further information about Northvolt’s private placement, see the company’s press release.

For any other information, please contact:

Ulrika Danielson, Head of Communications and Corporate Governance, ulrika.danielson@ap2.se

As a proud partner of the global sustainability award WIN WIN Gothenburg Sustainability Award, we can now announce that the recipient of the 2021 award is Jóhannes Stefánsson from Iceland.

John is the whistleblower behind the unveiling of ‘Fishrot Files’, an extensive corruption scandal with roots in Iceland and Namibia. In 2016, Stefánsson left his leading position for the Icelandic fishing company Samherji’s operations in Namibia, i protest against how the company improperly secured fishing quotas against economic replacement. He has been living under constant threat ever since. Jóhannes Stefánsson’s deed highlights the importance of individuals in the business community daring to take a stand. He has shown evidence on great courage and selflessness in the fight against abuse of power and corruption. The prize will be awarded on site in Gothenburg or digitally in ceremonial forms 21 October!

Corruption is one of the heaviest stumbling blocks for global sustainable development. It hits the most vulnerable most severely and negatively affect both society and the planet. Because feels it is extra important that the WIN WIN Award this year highlights both the problems in the tracks of corruption but also the good forces that fight against it!

Press release

The Swedish National Pension Funds’ Council on Ethics’ Annual Report 2020:
The Council on Ethics sees clear results from collaborating on impact processes. In 2020, the privacy issues of tech companies and impact on climate transition were high on the agenda. It is clear that collaboration is crucial for having an impact on important issues requiring development and change.

Since 2007, through engagement and dialogue, the Swedish National Pension Funds’ Council on Ethics has influenced global portfolio companies to improve their initiatives regarding the environment, human rights and corporate governance. Key to the success of dialogue work is that different actors collaborate.

Statement of expectations influences tech companies

In 2020, the Council on Ethics ran a project on human rights in tech companies in response to shortcomings in how platforms can be used, seen from an integrity perspective.

The project was kicked off by the Council on Ethics and the Danish Institute for Human Rights (DIHR) jointly producing a statement of expectations. This statement provides guidance that the Council on Ethics and other investors can use to influence Facebook, Google and Twitter to develop policies and to work with human rights, specifically issues concerning privacy.

“The Council on Ethic’s objective with the statement of expectations was to create a platform for dialogue on policies and increased transparency on integrity issues. We hope that the platform will not only benefit us and other investors, but also other stakeholders who are committed to the issues. Facebook has developed new policies and guidelines in line with our expectations,” says John Howchin, Secretary General of the Council on Ethics.

Prestigious award for successful mining initiative

In September 2020, The Investor Mining and Tailing Safety Initiative, led by the Council on Ethics and the Church of England Pensions Board, was awarded PRI’s prestigious Stewardship Project of the Year Award, awarded annually to the most successful impact project run by investors. The aim of the project is to map out and increase transparency regarding the safety of the world’s tailings dams following the tragic 2019 mine dam accident in Brazil. Collaboration is also in focus in this project with a good cooperation model being established between global companies, investors and UN organisations.

Climate, a consistently central issue 

The collaboration of different actors is also crucial for managing climate transition. The Council on Ethics is active in Climate Action 100+, an initiative that develops plans for the transition of sectors with high emissions, such as heavy transport, steel, aviation and cement.

“The plans are based on the scalable technology available today with synergies between the different sectors. The transition is well underway and there is tough pressure on these sectors,” says Christina Olivecrona, Chair of the Council on Ethics 2020.

Read more about the Council on Ethics’ corporate dialogues and other commitments in the Council on Ethics’ 2020 Annual Report.

For further information, please contact:

John Howchin, Secretary General of the Swedish National Pension Funds’ Council on Ethics
phone: +46 (0)8 – 555 17 176 john.howchin@etikradet.se

Christina Olivecrona, Chair of of the Swedish National Pension Funds’ Council on Ethics 2020
phone: +46 (0)31 – 704 29 00 christina.olivecrona@ap2.se

The Council on Ethics works on the basis of the Swedish National Pension Funds’ mission to create a high return at low risk to current and future pensioners and on the common value base of proactively striving for sustainable development, acting and setting requirements for transparency and positive changes. The Council on Ethics works proactively and reactively with global companies in the Swedish National Pension Funds’ portfolios. The assumption is that well-managed and responsible companies provide a higher return with lower risk over time. The aim of the Council on Ethics’ work is for companies and industries to work with sustainability systematically and in a structured, transparent manner.

The Council on Ethics of the Swedish National Pension Funds (AP-funds) has issued a new statement of its expectations of global tech companies on human rights. The expectations demand that tech giants reinforce measures to respect human rights and fully align their work with the UN Guiding Principles on Business and Human rights.

Read the complete pressrelease on the Council on Ethics website.

Andra AP-fonden (AP2) is one of northern Europe’s largest pension funds, managing assets of just over SEK 360 billion. Our mission is to ensure maximum benefits for the pension system – and to do so responsibly. We have now taken the next step as part of our commitment to sustainability. By divesting companies that derive revenues from the sale of fossil fuels, we are reducing the climate risk from our global investments.

The climate is the key issue of our time and one that must be addressed systematically. It is now five years since the world’s countries agreed in Paris to limit the global temperature rise to well below 2 degrees. To succeed, all nations – and all industry operations – must take responsibility for the reduction of greenhouse gas emissions. This applies not least to asset management. The Paris Agreement stipulates that the world’s financial flows must be made consistent with a road map towards low greenhouse gas emissions to enable us to address the consequences of climate change.

Both the climate issue and our pension systems are based on long-term perspectives. AP2 has worked with sustainability issues for many years. The challenge for us as managers is to successfully create a robust long-term, low-risk yield for the pension capital, while managing fund assets in an exemplary manner through responsible investment and ownership.

The six principles guiding our investments are as follows:

• We integrate sustainability into all our investment processes.
• We actively look for investments that contribute to sustainable development.
• Our work is based on focus areas.
• We use dialogue as a tool.
• We apply a scientific approach.
• We strive to be a leader in sustainability.

As early as 2016, we decided to develop our portfolio in line with the Paris Agreement and have since taken a number of measures to achieve this goal. In the coming years, we need to see a sharp drop in global emissions of gases affecting the climate. For this reason, AP2 has decided to ensure that its portfolio reach net zero by 2045.

Sustainable investments are good investments

There is a major, ever-growing, interest in sustainable investments. This may, in part, be explained by the willingness of some individuals to bring their investments to bear on how society develops. As a pension manager, we have the same mission.

We firmly believe that sustainable investments will prove to be more profitable in the long run than other investments. This is also evidenced by research into sustainability indicators such as gender equality and good working conditions for employees. Global companies prominent in environment-related risk management, social issues, and corporate governance have been shown to provide a significantly better yield on invested capital – regardless of where they are listed.

We genuinely believe that companies with long-term sustainable business models generate a higher long-term value for their owners. This applies to the climate issue, in particular.

Living up to the Paris Agreement is crucial

The EU has developed a number of different climate frameworks as part of its action plan to finance sustainable growth, including the framework intended for public index providers wishing to market their indices as the EU climate index. There are two levels of climate ambition: The EU Climate Transition Benchmark, which is somewhat less ambitious than the EU Paris Aligned Benchmark (PAB).

The criteria for PAB are based on the IPCC’s conclusions and are intended to support the broad societal change needed to achieve the Paris Agreement’s climate goals. This means divesting from certain companies, primarily those involved with fossil fuel operations, while ensuring that we continue to invest in companies that are important for the transition to a low carbon economy.

Consequences for companies that fail to act sustainably, and which will therefore not be admitted to the climate index, will be far-reaching. Their market capitalisation is likely to fall, their costs of capital are likely to increase, and it is likely to have a negative impact on companies’ reputation.

On track to reach net zero emissions by 2045

Not being a public index provider, AP2 is not covered by the PAB rules. That said, we believe that it has clear advantages to use an external regulatory framework, which is based on the science IPCC has compiled and developed by a credible institution as the EU.

We have therefore gradually adjusted our holdings of global corporate bonds and foreign equities over the year. We have done so to ensure that our investments are consistent with the PAB, but without compromising the return and risk characteristics of the index. As far as we know, this portfolio adjustment – to the tune of approximately SEK 200 billion – is unique in that it includes our corporate bonds and equities.

Specifically, this means that we no longer invest in companies that derived more than 1 per cent of their turnover from coal, more than 10 per cent of their turnover from oil, and more than 50 per cent of the turnover from gas. In principle, this excludes the entire energy sector. Nor do we invest in utility companies that receive more than 50 per cent of their revenues from fossil fuels. In total, there are approximately 250 companies that will no longer be included in our portfolio.

The PAB framework states that the carbon dioxide intensity should be reduced to 50 per cent during the first year and then decreased by 7 per cent annually. Given the seriousness of the climate issue, we wish to set ourselves an even more ambitious target. This year already, the carbon footprint of global corporate bonds will be reduced by about 75 per cent, and that of our global equities by about 70 per cent, as measured against market-weighted indices. In the coming years, the annual emission reduction will therefore be less than 7 per cent, but we will reach net zero emissions by 2045.

In order to achieve the global transition, withdrawal of investment from fossil fuels is not enough. AP2 will continue to be part of the solution by investing in companies that contribute to the transition to a sustainable and carbon-efficient society.

Eva Halvarsson, CEO at AP2

AP2 is proud to have been appointed a member of the PRI Leaders´Group 2020 and to be recognized for the responsible investment work the Fund has done regarding this year´s theme, climate reporting. AP2 is one of 36 investors who receive the award and one of two from Sweden (AP2 and Swedfund).

PRI Leaders´Group

The Leaders’ Group showcases signatories at the cutting edge of responsible investment, and highlights trends in what these leading signatories are doing. The signatories’ reporting responses and assessment data are used to identify those that are doing great work in responsible investment, both across the organisation, and with a particular focus on a given theme each year.

“I am delighted to congratulate AP2 for qualifying for the 2020 Leaders’ Group, and to formally recognise your excellent disclosure and advanced efforts in this year’s Leaders’ Group theme: climate reporting”, says Fiona Reynolds, CEO at the PRI.

AP2 and climate reporting

Climate is one of AP2’s focus areas, which means that climate issues are, where relevant, integrated in the analysis and decision-making processes for all asset classes. The ambition is to be transparent and develop the portfolio in line with the Paris Agreement.

AP2 reports, since 2017, in accordance with the Task force on Climate-related Financial Disclosures (TCFD) recommendations. These are a set of recommendations which helps actors in the financial markets to understand their climate-related risks and opportunities.

“This recognition is proof of the ambitious work AP2 is doing on responsible investments, especially on climate”, says Christina Olivecrona, Senior Sustainability Analyst at AP2.

Read more about the PRI Leaders´Group at the PRI website.

Under the theme “biodiversity”, the 2020 WIN WIN Award is awarded to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES).

Motivation of the jury:
IPBES – The Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services

The biodiversity on earth is crucial to human survival. The need to raise the issue on the agenda for the world’s decision-makers to a corresponding level is therefore great and urgent. The work to disseminate knowledge and awareness of the importance of biodiversity is therefore of crucial importance.

IPBES has had a decisive role in outlining the drivers of biodiversity loss, communicating the magnitude of the problem and laying the groundwork for a new agenda and transformative change in relation to biodiversity. Through their methodology, which includes research in both natural and social science as well as including the importance of indigenous peoples’ knowledge and experience, they have increased the opportunities for evidence-based decision-making by policy makers.

Since its inception in 2012, by engaging and uniting the world’s nations around the issue of biodiversity, IPBES has played a crucial role in setting the groundwork for the change we need to address this crisis in the near future.

Press release WIN WIN

AP2 has participated in the Financial Sector Commission “Finance Against Slavery and Trafficking (FAST)” which last week, ahead of the UN General Assembly in New York, presented its final report – Unlocking Potential: A Blueprint for Mobilizing Finance Against Slavery and Trafficking.

FAST aims to implement the Blueprint to help end modern slavery, human trafficking, forced labour and child labour in accordance with Target 8.7 of the United Nations Sustainable Development Goals (SDGs).

AP2 has been one of only two investors involved in the Commission’s work. In total, the Commission has consisted of 40 experts from all over the world.

Read more at www.fastinitiative.org

Principles for Responsible Investment (PRI) has identified AP2 as one of the signatories in the 2019 Leaders’ Group. PRI has identified asset owners with leading practices of managing listed equity and/or private equity externally. AP2 qualified for both categories. Through Leaders’ Group, PRI wants to show good leadership and raise the standards of responsible investment amongst all its signatories.

– I am extremely proud and happy that PRI is paying attention to our work and identified us to the Leaders’ Group. This is further proof that AP2 is a leader in sustainability and that our work is really at the forefront, says Eva Halvarsson, CEO at AP2.